A guide for founders & HR teams
Group health insurance for your employees, explained plainly.
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What it covers, what it really takes to run one well, and how a claim actually gets settled — written from years of doing it, in plain English. When you want the answer for your own company, we’re one conversation away.
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What is group health insurance?
In shortGroup health insurance (also called group mediclaim or GMC) is a single master policy a company buys to cover its employees’ hospitalisation costs — often including pre-existing conditions from day one, families, and parents — instead of each person buying their own.
Group health insurance is a single policy that covers a whole group of people — most often a company’s employees — under one master policy, instead of each person buying their own. When an employee is hospitalised for an illness, condition or accident during the policy year, the policy pays their hospital costs up to their sum insured.
You’ll see it called several things, and they all mean the same cover: group medical insurance, employee medical insurance, a group mediclaim policy (GMC), a group insurance scheme, or employer-employee health insurance. Whatever the label, it’s usually the centrepiece of a company’s employee benefits. The company can choose to cover just the employee, or the employee and their family — spouse, children, and often parents or in-laws.
It also sits inside a wider family: group insurance is the umbrella term, and group health is the main type companies buy. The other group covers — accident and life — have their own pages (below).
One detail people miss: a group can’t be cobbled together just to buy insurance — it has to exist for a real reason first (a company and its staff). Your employees are a genuine group, which is exactly why a group policy is far better value than each person buying individually.
Why offer employee health insurance?
Two reasons sit above the rest: security and loyalty, and attracting and keeping people.
Security and loyalty
In India there’s no automatic safety net for a hospital bill. For most working families, the cover their employer provides is their healthcare security. Hand someone that, and you’ve removed one of the heaviest worries a person carries — and someone who feels looked after thinks twice before leaving. With medical costs rising far faster than salaries, good health cover has quietly become one of the most valued things a company can give.
Attracting and keeping people
There’s a ceiling on what you can pay even the right person. A strong group insurance package for employees is often what closes the offer — and what keeps people once they’re in. It isn’t a hunch, either: in recent surveys of Indian employees, around three in four said the quality of their benefits weighed on whether they stayed or left. Source: employee-benefits survey (see Sources). The smartest employers go further: a higher sum insured for key people, pre-existing conditions covered from day one, annual health checks for the whole family. Things an individual policy simply can’t match.
There’s a quieter return too: people who are looked after lean on the safety net less. (Stated as a tendency, never a promised reduction in your claims — see how we think about claim costs below.)
Group cover vs an individual health policy
A group health insurance policy and a personal (retail) policy work differently in ways that matter. The short version: a group policy gives you leverage and flexibility an individual buying alone will never get.
| Group health insurance | Individual health policy | |
|---|---|---|
| Pre-existing conditions | Usually covered from day one | Covered only after a waiting period (often 1–4 years) |
| Medical check to join | Not required for employees | Often required, especially with age |
| Who pays | The company (employees can sometimes top up and pay for the extra) | The individual |
| Cost over time | Renews on the group’s actual claims — and can earn a discount if claims are low | Rises mainly with age |
| Adding & removing people | New joiners added and leavers removed through the year | Limited to family, usually only on marriage or a new baby |
| Best for | Whole teams; and elderly parents who’d struggle to get covered alone | A person who wants extra cover on top, or who’s self-employed |
This is why a group policy is the better home for the harder-to-insure people in your team’s lives — older parents especially, who often can’t get an affordable individual policy at all.
What a group mediclaim policy covers
The strength of a group insurance policy is everything it can include that an open-market policy won’t — and the features of a group plan are yours to shape. The exact mix is up to you, but here’s what’s commonly built in:
Pre-existing conditions from day one
No waiting. Someone with asthma hospitalised this winter is covered, even if their personal policy wouldn’t be.
No medical check to join
Employees come on board without health declarations or tests.
Maternity from day one
Often covering more than one child, with newborns covered from birth.
Parents and in-laws
Coverable in the same policy, sometimes up to age 90, with no individual medical underwriting.
A corporate buffer
A shared top-up the company can draw on when a single claim runs past an employee’s own sum insured.
Pre- and post-hospitalisation
Costs in the run-up to admission and during recovery — consultations, diagnostics, medicines — covered for a set window either side of the stay, not just the hospital bill.
Ambulance and domiciliary cover
Emergency ambulance charges, and treatment taken at home when a hospital stay genuinely isn’t possible, are commonly included.
Specific-disease waits waived
Conditions that carry multi-year waits on an individual policy are commonly covered from the start.
Fully customisable
The cover is built around your team and your budget, not bought off a shelf.
You can also let employees voluntarily increase their own cover — adding a top-up or super top-up at their own cost, for a higher sum insured. It’s useful for people who want extra protection without the company carrying the cost, and it’s a simple way to give your team a bit of choice.
Beyond the basics, modern group plans increasingly add OPD and teleconsultation (everyday doctor visits, medicines and tests — not just hospitalisation), mental-health cover and counselling (now a standard part of health cover, not an extra), day-care procedures (treatments that don’t need a full 24-hour stay, like cataract surgery or dialysis), restoration of the sum insured if it runs out mid-year, a no-claim bonus that grows the cover for claim-free years, and maternity and even IVF support. Which of these are worth adding depends on your team — a younger workforce tends to value OPD, mental health and maternity far more than others.
Who’s covered. A typical group plan covers the employee plus their immediate family — usually spouse and children, and very often parents or parents-in-law too (you choose which). Children are normally covered up to a set age, and many insurers now cover partners regardless of marital status or gender — worth asking for if it matters to your team. How wide you draw the family definition is one of the choices that shapes both the cover and the premium.
Where group health fits in your employee benefits
Group health insurance is usually the biggest piece of an employee benefits programme — the cover people lean on most. Companies often pair it with two low-cost companions: group personal accident and group term life. Both do a different job from health cover, so they each have their own home rather than crowding this page.
Putting a full benefits package together?
See group personal accident → and group term life →. A broker can help you balance all three.
How to structure a corporate health insurance plan well
A well-structured policy is the difference between cover that looks fine on paper and cover that actually holds when someone’s in hospital. (A corporate health insurance plan is also called corporate medical insurance, company group health insurance or employer group health insurance — all the same thing.) A few of the things worth getting right:
- Who’s covered — just the employee, or the employee plus spouse, children and parents. Define “family” deliberately.
- How much cover (the sum insured) — enough that a serious hospitalisation is genuinely taken care of, often stepped up for more senior people, with a shared corporate buffer behind it for the rare large claim. The right level depends on your team and your city’s medical costs — it’s one of the first things we’ll size with you.
- The waiting periods you negotiate away — the first 30 days, pre-existing conditions, the 9-month maternity wait, the new-born wait. As a group, these are yours to ask for.
- The room-rent clause — quietly the most important line in the policy, and the most misunderstood (more on that in keeping claim costs sensible). Set it as a real room category, not a thin percentage cap.
- A corporate buffer — a shared pool for the big, rare claims, so one serious illness doesn’t blow through an employee’s individual cover.
- Wellness and OPD — doctor-on-call, health checks, counselling and out-patient cover are increasingly expected, especially by younger teams who want benefits that feel useful before a hospital visit, not only during one. OPD is genuinely useful but needs care: it can be costly and hard to administer, so weigh it deliberately. (The everyday, preventive side of benefits is its own half of what we do — see Rise →.)
None of this is one-size-fits-all — and you don’t have to work it out alone. The whole point of a broker is to design this with you, around your team and your budget.
Keeping claim costs sensible — without hurting your people
Rising claims drive rising premiums, so it’s fair to want to manage them. But this is delicate work: anything that makes your people feel short-changed defeats the purpose. Done well, the same techniques actually improve how the cover feels. A few that work:
- Preferred hospitals — insurers agree fixed, cashless rates with reputable hospitals (a “preferred network”). Steering planned hospitalisations there keeps costs honest and the experience smoother. Most employees happily choose them once they understand why.
- The room-rent clause, explained — if your policy caps room rent and an employee takes a costlier room, the insurer doesn’t just dock the extra room cost — every linked charge is scaled down proportionally, so the shortfall is far bigger than people expect. Setting the room category sensibly (and communicating it) prevents a nasty surprise at the billing counter. This one clause causes more upset than any other when it isn’t explained.
- A modest co-pay — a small shared portion on each claim makes everyone (including the hospital) scrutinise the bill, which tends to bring costs down. The key is keeping it gentle, and waiving it in genuine emergencies, so it never feels like a penalty.
- Sensible sub-limits on a few procedures — caps on a handful of commonly over-billed procedures stop hospitals charging wildly different amounts for the same treatment, while leaving serious illness fully supported.
Notice the thread: every one of these protects your people from being over-billed as much as it protects your premium. That’s the only kind of cost control worth doing — and a broker who knows your claims data can tell you which of these actually fits your team. (We describe how the levers work in general — not a promise about your specific numbers.)
How a group health insurance claim works: cashless vs reimbursement
There are two ways a group health claim gets paid, and it’s worth knowing both:
Cashless
The employee is treated at a hospital in the insurer’s network, and the insurer settles the bill directly with the hospital. The employee pays little or nothing up front. This is the smoother route — which is why steering planned hospitalisations to network hospitals matters.
Reimbursement
The employee pays the hospital first, then claims the money back from the insurer with the bills and documents. This is the route when treatment happens outside the network, or in an emergency at a non-network hospital.
Sitting in the middle is usually a TPA (Third Party Administrator) — the agency that processes claims on the insurer’s behalf, issues health cards, and approves cashless requests. Most employees never even learn their TPA’s name when there’s a good broker in the picture, because the broker absorbs that back-and-forth.
What to expect when you claim
In practice it’s simpler than it sounds. At a network hospital, the employee shows their health card, the hospital requests approval, and the insurer settles directly — cashless, usually approved within a few hours. Away from the network, or in an emergency at a hospital that isn’t on the list, they pay and claim it back, typically within a couple of weeks of submitting complete documents. The practical details — what documents, what to do in an emergency, how to appeal a rejection — are in the common questions below. The one thing that should never be hard is knowing who to call: with a real person on the claim, it isn’t.
A claim, step by step
Two quick pictures of how it actually goes. The smooth one (cashless): an employee needs a planned operation, picks a hospital from the insurer’s network, and shows their health card at the insurance desk. The hospital sends a pre-authorisation request to the insurer or TPA; approval usually comes within a few hours. The treatment goes ahead, and at discharge the insurer settles the covered amount directly with the hospital — the employee pays only what sits outside the cover, like a co-pay or a non-medical item. No big cheque, no waiting for money back.
The bumpy one — and how it gets sorted: an employee is admitted in an emergency at a hospital that isn’t in the network, so cashless isn’t available — they pay and will claim reimbursement. A few days after submitting the bills, the insurer raises a query: a document is missing and one charge looks like a non-medical item. Left alone, this is exactly where a claim stalls. With someone on it, the missing document goes in the same day, the disallowed item is explained, and the rest is paid. The point isn’t that claims never hit snags — it’s that the snag is the moment the help you chose either shows up or doesn’t.
What’s changed recently — and in your favour
Health-insurance rules have tightened in employees’ favour in recent years. A few worth knowing: under the “Cashless Everywhere” push, cashless treatment is increasingly possible at any hospital on prior intimation, not only network ones; insurers are now expected to approve a cashless request within about an hour and clear discharge within about three hours; and after continuous cover over a number of years, a claim can no longer be turned down for a non-disclosure (genuine fraud aside) — a real protection for long-serving employees.
Why a claim sometimes gets rejected or only partly paid
It’s the thing people fear most, so it’s worth being straight about — and it isn’t rare: insurers’ disallowed and repudiated health claims have risen sharply in recent years. Source: IRDAI Annual Report (see Sources). The usual reasons are mundane, not sinister: a non-network hospital on a cashless request, missing or late documents, a treatment still inside a waiting period, an exclusion in the policy wording, or a room-rent/sub-limit deduction that scales down a bill. Most of this is preventable at the design stage and fixable in the moment — which is the whole case for having a real person who checks the claim first and pushes back when a rejection isn’t fair.
The honest truth about claims is that the system works smoothly right up until it doesn’t — a query, a missing document, a partial approval — and that’s the moment people feel most alone. How that moment is handled is the real test of your cover, which is exactly where the choice of who arranges your policy matters most.
Covering employees’ parents
First, a quick word on who’s covered and who pays, because it’s where the questions start. Group plans are usually built in tiers: just the employee; the employee plus spouse and children; or all of that plus parents (you’ll hear these called E, ESC and ESCP). As a rule of thumb, companies fund the base cover for employees and immediate family, while parents’ cover and any top-up are often employee-funded — though that’s your call to make, and plenty of companies fund parents too.
Parents are one of the most valued — and most worried-about — parts of a group policy. Older parents are exactly the people who struggle to get affordable cover on their own, which is what makes including them so meaningful. There are three honest ways to approach it:
- The company pays. The most generous option. Structured well — with sensible sub-limits on commonly over-billed procedures and a preferred-hospital nudge — it stays affordable while genuinely protecting families.
- Employees pay, the company arranges. Even when the company can’t fund parents’ cover, simply arranging a group policy gets employees a far better deal than they’d find alone — and a good arrangement lets them carry the cover forward if they leave.
- Pointing the way. If neither fits, the company can still help its people make good decisions — explaining options like a dedicated senior-citizen policy, which is built for the over-60s and waits less on pre-existing conditions than ordinary individual cover. Sometimes pointing someone in the right direction is worth as much as paying.
Whichever route fits, the instinct to look after your people’s parents is a good one — in India, looking after someone’s parents is looking after them.
Government schemes that work alongside your group plan
A good benefits programme doesn’t sit in a vacuum. Alongside the cover you provide, there are public schemes your people — and especially their parents — can use, often on top of your group policy. Pointing employees to these is a simple, no-cost kindness.
Ayushman Bharat for parents aged 70 and above (the Vay Vandana card)
Since late 2024, every Indian aged 70+ can get free government health cover of up to ₹5 lakh a year — regardless of income, and even if they already have private or company insurance. For an employee whose elderly parents are hard or expensive to add to a group policy, this is genuinely worth knowing: it can sit alongside whatever cover you provide. Enrolment is by age, through the Ayushman app or an empanelled hospital.
ABHA — the digital health ID
A free health account that lets a person store and share their medical records digitally. It isn’t insurance and carries no cover of its own — but it makes claims and record-keeping smoother, and it’s becoming the backbone of faster, more standardised claims. Nudging your team to create one is a small, useful thing.
ESI (Employees’ State Insurance)
A statutory government scheme that covers employees earning below a set monthly wage at registered establishments — separate from any voluntary group policy you buy. For lower-wage staff, ESI is often their cover by law, which is why a group mediclaim policy sometimes sits alongside, or on top of, it.
None of this replaces a good group policy. But a broker who understands how the public and private pieces fit together can help you place your cover where it does the most good — and help your people use everything they’re already entitled to.
What happens to the cover when someone leaves — and switching policies
Two questions come up a lot here, and they’re often confused:
When an employee leaves, their group cover normally ends with their employment. But the regulator (IRDAI) allows them to migrate that cover into an individual (“retail”) policy with the same insurer — sometimes called group-to-retail portability — carrying forward benefits they’d built up, like waiting periods already served, provided it’s arranged in time. Telling people this is a genuine kindness; many don’t know it’s possible.
Switching the company’s policy to a different insurer is a separate thing, and entirely doable at renewal. The usual reason companies switch isn’t price — it’s a claims experience that left them unsupported. A few practical points: it’s best started well ahead of renewal (the regulator’s guideline is around 45 days, though that’s indicative, not a hard wall), and the aim is always to switch without breaking continuity, so no one loses the benefits they’ve accrued.
Merging cover after an acquisition. If you acquire another company that has its own group policy, you can bring its employees onto your (the parent) policy in one of two ways. The cleanest is to wait until the acquired company’s policy reaches renewal and move everyone across then — no gap, no fuss. If you’d rather merge sooner, the acquired company’s insurer can cancel that policy mid-term, and its employees are added to your policy straight away. One thing worth knowing about the mid-term route: insurers traditionally calculate the refund on the cancelled policy using a short-period scale, which keeps back more than the simple day-count share. But because corporate cover is a commercial policy, the refund basis is negotiable — a broker can often secure a fairer pro-rata refund instead, especially on a claim-free policy. Either way, the aim is to carry forward continuity (so no one restarts a waiting period) and to keep the acquired team on their existing cover until the merge is confirmed, so nobody falls through a gap.
All of this is exactly the kind of thing a broker handles for you — so a switch or a merger is smooth, and no employee falls through a gap.
Is health insurance mandatory for employees in India?
Short answer: for most private companies in India, group health insurance is not a legal requirement — it’s a choice the best employers make because it works, not because they’re forced to.
A few honest clarifications, because there’s a lot of confusing information online:
- ESI is a separate thing. The Employees’ State Insurance scheme is a statutory requirement, but only for employees below a certain wage threshold at covered establishments — it’s a government scheme, not the same as a company buying group health insurance.
- The lockdown rule has lapsed. A temporary 2020 directive briefly required employers to provide medical cover when offices reopened during the pandemic. That requirement is no longer in force.
- You don’t have to be a big company. Group cover isn’t only for large firms — small businesses and startups can absolutely get a group policy (more on that below).
So most companies offer group health insurance not because a law says they must, but because it’s one of the most effective things they can do for the people they depend on.
Group health insurance for startups and small businesses
You don’t need to be a large company to offer group health insurance — and for a small, growing team it can be one of the most powerful things you do. It’s also a genuine edge: most large companies in India already offer group health, but among smaller firms far fewer do (industry penetration data — see Sources) — so a startup that gets this right stands out for exactly the reason talent notices.
- The minimum group is smaller than you’d think. There’s a lot of conflicting information online — you’ll see “5,” “7,” “20” thrown around. The honest version: insurers do set a minimum number of members for a group policy, commonly around seven lives, and some arrangements go lower — well within reach of an early-stage startup or a small business.
- Group scale makes good cover affordable. Because you’re buying for a group, even a small team gets terms — and a price per person — an individual could never negotiate alone. That’s exactly how a startup punches above its weight on benefits.
- Cover that fits a startup’s cash flow. Annual premiums can be a strain when receivables or funding are lumpy. There are ways to ease that — periodic premium payment is permitted for health policies — so the cover need not mean one big upfront cheque.
- It’s a hiring edge. When you’re competing for talent against bigger names, strong health cover (and parents’ cover especially) is a credible, human reason for someone to choose you — and to stay.
- It grows with you. A good policy adds and removes people as you hire and as folks move on, so the cover keeps pace with the team without a fresh negotiation every time.
If you’re setting this up for the first time, you don’t have to get it right alone — walking a founder through exactly this is a big part of what we do.
Is group health insurance tax-deductible?
Generally, the premium a company pays to provide group health insurance for its employees is treated as a business expense (deductible under the relevant section of the Income Tax Act), which is part of why it’s such a sensible thing to offer. And the cover an employer provides isn’t normally treated as a taxable perk in the employee’s hands.
One thing worth clearing up — GST. In late 2025, individual and family health insurance policies were made GST-exempt, and the headlines read “GST removed on health insurance.” But that change did not extend to group/corporate policies, which still attract GST. So if you saw those headlines and assumed your company’s group cover just got cheaper, that’s the common misunderstanding — the exemption is for individual policies, not group ones. And that GST is usually a real cost, not a recoverable one: input tax credit on health insurance is generally blocked under GST law, except in the narrow case where providing the cover is obligatory under a law. So for most companies, the GST on group health can’t be set off against other tax.
(Separately, an individual paying for their own health policy can usually claim a deduction under Section 80D — but that’s personal tax, not the company’s.)
Tax rules shift and depend on your specifics, so treat this as general information and confirm the details with your accountant — it’s exactly the kind of thing we’ll walk through with you.
How to set up — and run — group health insurance for your company
Putting a policy in place is more straightforward than most first-timers expect. In plain steps:
- Start with your people. Who needs covering — just employees, or families and parents too? Their ages and rough numbers shape everything that follows.
- Decide the shape of the cover. How much sum insured, what to include (maternity, day-one pre-existing, a buffer), and what matters most to your team. This is where a broker earns their place — translating “look after my people” into the right structure.
- Get a spread of quotes. A broker brings options across insurers and negotiates the terms and the price — not just the headline number, but the waiting periods, the room-rent clause and the claims support behind it.
- Roll it out and enrol everyone. Employees are added, health cards issued, and the cover explained clearly so people actually understand and use it.
- Get ongoing support. New joiners added, leavers removed, renewals handled — and, most importantly, a real person on hand when a claim needs help.
The part no one warns you about: running it
For most HR teams, the real grind isn’t buying the policy — it’s the month-after-month admin. Adding joiners and removing leavers (called endorsements), reconciling lists, chasing the insurer, and becoming the unofficial claims helpdesk when an employee’s claim gets stuck. Two things make that disappear:
- Add/remove without the spreadsheet chase. Endorsements should be a few clicks, not an email-and-Excel ritual — done through one place, with a real team behind it when something needs sorting. Premiums adjust on a pro-rata basis, so you only pay for the cover each person actually has through the year.
- Benefits people actually understand and use. A surprising share of employees don’t know what their cover includes — so the spend goes unappreciated and problems get caught late. Clear, plain communication — and one app for your people — turns the benefit you’re paying for into one your team actually values.
- Visibility on how the cover is used. A good broker gives you regular claims and utilisation reports — what’s being claimed, by how many people, where the cover is running hot — so renewals don’t arrive as a shock and you can adjust the structure with evidence rather than guesswork.
You can do all of this yourself by going direct to an insurer. But the whole reason a broker exists is to carry steps 2 through 5 — and the running of it — for you, and to be there on the day a claim is stuck. That’s the part that actually matters.
20 minutes with a Growth Advisor. No obligation.
Why work with an insurance broker
You can buy a policy directly. But a broker changes what you get for it — in three ways that matter most exactly when you’re under pressure:
- Better cover for your money. A broker brings you a spread of quotes across insurers and negotiates the structure — the waiting periods waived, the room-rent clause, the buffer — that you’d never get asking alone.
- Someone on your side, by law. This is the part people don’t realise: under IRDAI’s regulations, a broker’s duty is to you, the client — not to any insurer. “On your side” isn’t a slogan; it’s the licence we hold.
- Real help when a claim is in trouble. Anyone can sell a policy. The test is the day a claim is stuck and frightening — and that’s the day most people are left alone with a call centre.
Broker, benefits platform, or direct — and how is a broker paid?
- Direct from the insurer — you deal with one insurer’s own team, with no one comparing the market or negotiating for you, and no independent advocate when a claim is disputed.
- A benefits platform — slick software for enrolment and tracking, which is genuinely useful. The question to ask is who stands with your people when a claim is stuck: software, or a person whose duty is to you.
- A broker like Ethika — licensed to work across insurers, acting for you by law: comparing the market, designing the plan, running it, and being the human in your corner when a claim is tested. (We also bring the software — so it isn’t a choice between the two.)
And the question everyone’s too polite to ask: does a broker cost us extra? No. A broker’s remuneration is built into the premium structure and regulated by IRDAI — you don’t pay extra to have us in your corner.
When something goes wrong, your people don’t get a portal or a helpline queue. They get a real person from our team who stays with them until the claim is settled — Red Carpet. Behind that person sit specialist teams for cashless, reimbursement, renewals and the rest, so the help is fast and never depends on one individual. And every claim is checked by us first — so errors and inflated bills get caught before they ever reach the insurer, on your side of the table. We fight a claim as far as the policy’s words allow.
Want the whole picture of how claims work? See Protect →
Much of the review writing is people thanking an Ethika person by name.
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Common myths about group health insurance
There’s a lot of confusing — and sometimes plain wrong — information online. Here are the ones we end up correcting most often.
- Myth“Group health insurance is legally mandatory for companies.”FactFor most private companies in India it’s a choice, not a legal requirement. (ESI is a separate, statutory scheme for employees below a wage threshold; a temporary 2020 lockdown rule has since lapsed.) Most companies offer it because it works, not because they must.
- Myth“You need 20+ employees to get a group policy.”FactThe minimum is smaller than most people think — commonly around seven lives, and some arrangements go lower. Startups and small teams are routinely covered.
- Myth“GST was removed on health insurance, so our company policy got cheaper.”FactThe late-2025 exemption applied to individual and family policies. Group/corporate cover still attracts GST — so the headlines didn’t make company cover cheaper.
- Myth“Group cover is just the same as ESI.”FactESI is a government scheme for lower-wage employees; group health is a private policy a company designs and controls. They’re different things, and many companies run both.
- Myth“An individual policy is always better than group cover.”FactFor most employees — and especially older parents — group cover is stronger: pre-existing conditions from day one, no medical check to join, and parents included. Those are things an individual policy makes you wait years for, or won’t do at all.
- Myth“The cheapest quote is the best deal.”FactThe insurer’s claim settlement ratio and the claims support behind the policy matter more than the headline premium. A cheaper policy that pays slowly, or drags out every claim, costs far more on the day it’s actually tested.
- Myth“Having a broker costs us extra.”FactA broker’s remuneration is built into the premium and regulated by IRDAI — you don’t pay extra to have one in your corner.
Key terms, explained
Group health insurance comes with its own vocabulary. Here’s the plain-English version of the words you’ll meet.
- Sum insured
- The most the policy will pay for a person (or a family) in one policy year.
- Group mediclaim (GMC)
- Another name for group health insurance: a company’s hospitalisation cover for its employees.
- TPA (Third Party Administrator)
- The agency that processes claims, issues health cards and approves cashless requests on the insurer’s behalf.
- Cashless
- The insurer settles the hospital bill directly, so the employee pays little or nothing up front (at a network hospital).
- Reimbursement
- The employee pays the hospital first and claims the money back afterwards with the bills.
- Network hospital
- A hospital that has a cashless tie-up with the insurer.
- Pre-existing condition (PED)
- A health condition someone already has before the policy starts; group cover often covers these from day one.
- Waiting period
- A set time before certain conditions or treatments are covered; group cover often waives these.
- Room-rent limit (capping)
- A cap on the room category or charge. Exceeding it can scale down the whole bill proportionally, so it matters more than it first looks.
- Sub-limit
- A cap on what the policy pays for a specific treatment or item, regardless of the overall sum insured.
- Pre- and post-hospitalisation expenses
- Medical costs for a set period before admission and after discharge (consultations, tests, medicines) that the policy covers in addition to the hospital bill.
- Domiciliary hospitalisation
- Treatment taken at home, covered when a hospital admission genuinely isn’t possible — for example, no bed available, or the patient can’t be moved.
- Dependent
- A family member covered under the employee’s policy, typically spouse, children, and (when included) parents or parents-in-law.
- Co-pay
- A small share of each claim the employee pays themselves.
- Corporate buffer (floater)
- A shared top-up pool the company can draw on when a claim runs past an employee’s own sum insured.
- Super top-up
- Extra cover an employee can voluntarily add on top of the base sum insured.
- Top-up vs super top-up
- Both add cover above the base, but a plain top-up applies its deductible to each single claim, while a super top-up applies it across all of the year’s claims together — usually the better value.
- OPD (out-patient department) cover
- Cover for treatment without being admitted overnight: doctor consultations, medicines and diagnostic tests.
- Teleconsultation
- A doctor consultation by phone or video, now often built into group plans.
- Mental-health cover / EAP
- Cover for mental illness (now required on par with physical illness) plus Employee Assistance Programmes that offer confidential counselling.
- Day-care procedure
- A treatment that needs hospitalisation but not a full 24-hour stay, such as cataract surgery or dialysis.
- Restoration (refill)
- An automatic top-up of the sum insured if it’s used up during the policy year.
- No-claim bonus (NCB)
- An increase in the sum insured for each claim-free year.
- Endorsement
- A mid-term change to the policy, such as adding a joiner or removing someone who has left.
- Pro-rata
- Charged or refunded in simple proportion to time: you pay (or get back) premium for exactly the part of the year a person is covered.
- Short-period (short-rate) scale
- The traditional way insurers calculate a refund when a policy is cancelled mid-term; it keeps back more than the simple day-count share. A broker can often negotiate a fairer pro-rata refund on commercial group cover instead.
- Portability / migration
- Moving cover (for example, a leaver shifting group cover to an individual policy) while keeping the benefits already built up.
- Claim settlement ratio
- The share of claims an insurer actually pays; a key signal of how reliable they are.
- Maternity cover
- Cover for childbirth, and usually the newborn; group plans often include it with little or no waiting period.
- Exclusion
- Something the policy doesn’t cover, such as cosmetic treatment.
Group health insurance: common questions
What is group health insurance?
What does GMC mean in insurance?
What’s the difference between group and individual health insurance?
What does a group health insurance policy cover?
What is a group insurance scheme?
What is an employer-employee insurance policy?
Is health insurance mandatory for employees in India?
What’s the difference between group health insurance and ESI?
Can a small business or startup get group health insurance?
How much sum insured should a company provide?
Who pays the premium?
Can employees increase their own cover?
Are the premiums tax-deductible?
Can employees add their parents?
Who can be covered — spouse, children, parents-in-law?
How do employees make a claim?
How long does a group health insurance claim take to settle?
What documents do I need to make a claim?
What happens in an emergency, or if the hospital isn’t in the network?
Who do I contact if a claim is stuck — and can I track it?
Can a rejected claim be appealed or reconsidered?
What is a health card, and how does cashless work at the hospital?
What happens to the cover when an employee leaves?
Can I keep my health cover after I leave the company?
What are the types of group insurance?
Why do group health claims get rejected or only partly paid?
Does having a broker cost us extra?
What’s the difference between a broker, a benefits platform, and buying direct?
Does group health insurance attract GST?
Our claims ratio is high and the renewal jumped. What can we do?
How do we add or remove employees during the year?
What’s typically not covered?
Is maternity and newborn cover included?
Is my company’s cover enough, or should I also buy my own?
What is group insurance?
What is group medical insurance?
How do we choose the right group health insurance company?
Go deeper: plain-English explainers
Longer reads on group health cover — written to be useful on their own. Still general; where the honest answer is “it depends on your policy,” they say so.
The right policy for your company is a conversation, not a quote
Everything above is how group health insurance works in general. What’s right for your company depends on your team, your budget and what you’re trying to do for your people — and that’s a short conversation, not a form to fill in blind.
What happens when you talk to us
A 20-minute video call with a Growth Advisor — no obligation, and no quote pushed. It opens with a five-minute video from our founder on how the benefits stack works and why Ethika exists; the rest is your questions. You’ll leave with an honest read on your current cover and claims experience, and a straight answer on whether we can genuinely help — even if you never become a client.
20 minutes with a Growth Advisor. No obligation.
A note on this page. This page is general information about group health insurance, not insurance, legal, financial or tax advice, and nothing on it is an offer of cover. The right policy for your organisation is determined through a conversation and the formal mandate process.
Sources. Medical-inflation figure: Milliman medical-trend analysis (India). Rise in disallowed and repudiated health claims: IRDAI Annual Report. Employees weighing benefits when staying or leaving, and employee awareness of their benefits: industry employee-benefits surveys. Group-health take-up among large vs small firms: industry penetration data.