When Should You Get a Group Health Insurance Policy for Your Employees?

Group health insurance is the best form of providing health insurance coverage to employees by any employer. The group health insurance policy would be taken by the employer of the organization to provide health insurance coverage to their employees in case of hospitalization due to the illness, disease or accidents. The maximum liability of the insurance company under the group health insurance policy would be the sum insured of each employee mentioned under the policy and the corporate buffer sum insured (if opted). Employees’ health insurance would be usually taken by the employer at the start of the financial year and renew the policy with additions or deletions at the time of renewal.

The group health insurance policy can be customized as per the needs and requirements of the organization. The sum insured can be opted on a floater basis as well as non floater basis. In the floater policy the sum insured will float among the family members and anyone can use the sum insured without any restrictions.

Let us understand the best time to get a group health insurance policy for your employees.

1. At the inception of the company: The best time to take group health insurance for your employees is during the start-up phase. Whenever you are starting a company it is advisable to take a group health insurance policy to cover the employees working in a startup.
   
   The environment of a startup is dynamic and having a group health insurance policy is vital to the survival of the company as the morale of the employees can be improved with the group health insurance policy.
   
   The group health insurance policy can also be taken at the time of starting a new branch or a new subsidiary company. For example, if you have a company in Delhi and wish to start another company in Mumbai, then it is better to take the group health insurance policy at the time of starting a business in Mumbai. Employee insurance for startups can be availed here.
   
2. While growing or expanding- Small business to big business: The other best time to take a group health insurance policy is when you are expanding your business. If you have started a small scale or family business and wish to expand it to a big scale then there would be more manpower joining the organization and require health insurance coverage.
   
   So it would be better to take a group health insurance policy when you are trying to expand your business. This helps in retaining the existing employees and also gives a morale boost to the new employees joining in your organization. The group health insurance policy can also be extended to the family members of the employees to increase the retention percentage.
   
   Usually, a family business would expand by adding more branches to the existing home branch, this way the number of employees would increase and the requirement for a group health insurance policy would arise. Employee insurance for small businesses can be availed here.
   
3. At the time of joining: The best time to take a group health insurance policy for your employees is at their time of joining the organization. If there is a group health insurance policy in place, then all the newly joined employees can be added to it without much difficulty.
   
   The additions can be made by intimating the insurance company with all the details of the newly joined employees and paying the required premium. If there is no group health insurance policy, then a new policy can be taken when the employees are joining the organization. The premium to be paid can be either shared with the employees or borne by the organization depending on the employer’s wish.
   
4. Minimum number of employees: Group health insurance policies require a minimum number of lives. As per the Insurance regulatory and development authority of India the minimum number of lives to avail of group health insurance policy is 7.
   
   So if a company has reached the minimum level of employees to satisfy the requirement for group health insurance policy, then they can take the group health insurance policy. The minimum number of lives for group health insurance policy is different for different insurance companies.
   
   This happens mostly in family businesses where there would be less number of employees at the time of starting the business, but as the business grows more and more number of employees would be added thereby satisfying the minimum lives requirement to avail group health insurance policy.
   
5. Tax exemptions: The other advantage of employers taking a group health insurance policy is the tax exemptions that can be availed from the premium paid towards the group health insurance policy. The premium paid towards group health insurance policy can be shown as a business expense and income tax exemption can be claimed by the employer.
   
   Most of the employers take group health insurance policy during the Jan-March season which enables them to get tax exemptions and the financial year is also considered to end on March of every year for most of the organizations.
   
   The tax exemptions can also be availed by the employees if they pay a part of the premium under the group health insurance policy. Employees can avail income tax benefits under section 80D of income tax act for up to Rs.1 lakh premiums paid towards health insurance for self, family and dependents.
   
6. Retaining employees: The best time to take group health insurance by employers for their employees is at a time of high attrition in the organization. If the employers see a high attrition rate in the organization then they can take a group health insurance policy covering the employees and their family members to reduce the attrition rate at least to a certain extent.
   
   There might be instances when the employees would prefer a group health insurance policy which includes their ailing parents that a high paying job. In such situations the employers can take the group health insurance policy.