Importance of Group Health Insurance for Employers and Employees

This way, you will have the financial backing of an insurance company in case of a health scare. A Group Health Policy or a Group Mediclaim Cover is a health insurance plan that covers a group of people.


The health insurance portfolio consists of different types of plans. For example, plans for individuals, plans for specific diseases, etc. Ideally, you should be covered under at least one type of health insurance policy. This way, you will have the financial backing of an insurance company in case of a health scare. A Group Health Policy or a Group Mediclaim Cover is a health insurance plan that covers a group of people.

A Group Health Policy can be purchased by an employer for the employees. Here, the employer purchases a Group Health Policy from the insurance company by paying the applicable insurance premium to insure the employees against health risks as per the terms and conditions of the policy. Read ahead to know the importance of a Group Health Insurance Plan for employers as well as employees.

Importance of Group Health Plan for Employers

Purchasing a well-rounded Employee Health Insurance Policy is important for employers for the following reasons.

1) Goodwill Generation

Employers who take care of their employees’ needs are highly valued. Employees often feel comforted and supported if their employer offers them an extensive health insurance plan. This can generate goodwill for the employer’s brand in the industry.

2) Attraction and Retention

A wide-ranging health insurance plan can be looked at as a productive prerequisite of being a part of the company. Such an endeavor can play an active role in the attraction and retention of talent.

3) Cost Management

Group Health Insurance for employees is available at an affordable rate. Since the insurance company covers a huge number of employees under one policy, it offers the policy at a manageable rate to the employer.

4) Convenient Claims Management

By partnering with a tech-savvy insurance company, the employer does not need to worry about managing insurance-related processes. Nowadays, digital-first insurance companies have made policy purchases, customer service, and claims settlement simple and convenient.

5) Tax Benefit

The employer can avail of the applicable tax benefits by paying the insurance premium of the Group Health Plan purchased for the welfare of the employees.

Importance of Group Health Plan for Employees

The following points highlight the importance of a Group Health Plan for employees.

1) Basic Insurance Coverage

Employees can benefit from basic insurance coverage such as Hospitalisation Cover thanks to their employer. Usually, the employer pays the premium for the policy. Thus, the employee can receive the benefits of the insurance plan free of cost.

2) Lenient Terms

Individual Health Insurance Plans constitute stricter terms as compared to a Group Health Policy. For example, the terms and conditions concerning the waiting period, health check-ups, and maternity cover are comparatively lenient in a Group Health Plan.

3) Cover for Family

Some Group Health Plans not only cover the employee but also the employee’s family members. This way, the financial security associated with the cover can be extended to other members of the family as well.

4) Insurance Management

Once you are covered under a health insurance policy offered by your employer and are aware of the inclusions and exclusions of the plan, you can accordingly look for enhanced coverage by opting for an Individual Health Insurance Plan. For example, you can purchase a Critical Illness Policy for yourself as the Group Health Policy will offer a basic insurance cover.

5) Peace of Mind

A medical emergency can rapidly result in a financial emergency. This can cause a lot of stress to the patient as well as the family members. A health insurance policy can be of great help in such challenging situations.

Stay Informed

Simply being covered under a Group Health Plan will not prove helpful. You need to be aware of its insurance coverage. This way, you will know what the plan covers and what it doesn’t.

Whether you are an employer searching for an insurance company or an employee who is covered under a Group Health Plan, make sure to read the fine print of the insurance policy to understand the coverage in detail. Feel free to contact the insurance company in case of any queries.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


Around The World