How Should Startups Get Group Health Insurance?

How Should Startups Get Group Health Insurance?

Introduction

We often think that popular or mid-size companies provide employee benefits such as group medical insurance or group health insurance. On the other hand, we think of only a friendly working environment, work flexibility, and high growth potential when we think of startups. But, the scale of employee benefits in India has changed a lot. Companies of all sizes offer multiple employee benefits to retain and attract talent.

Now, let’s talk about group health insurance for startups. Not all startups have the budget to provide health coverage benefits to their employees, given they are still new to the business and require financial resources to fund business obligations. But, if you have adequate financial resources and budget, you should offer a group health insurance policy to your employees and establish a healthy and long-lasting relationship with your employees.

What is Group Medical Insurance?

A group medical insurance policy is a group plan generally offered by companies to their employees. As the name suggests, under this plan, the entire group of employees of an organisation is provided with health insurance coverage. It is becoming increasingly popular among startups to offer fringe benefits like these to retain their employees and make them feel like they belong to the organisation.

Why Should Startups Invest In Group Medical Cover?

Here are some reasons why startups should consider offering group medical plans to their employee:

  1. Helps to Comply Legally: The government of India has made it mandatory for the employers to provide health insurance policies for their employees and have notified the insurance companies to provide a comprehensive health insurance policy for the employers. This was declared in April 2020.
  2. Tax Benefits: By offering group health insurance plans, employers get to enjoy the attached tax benefits. Group medical health insurance can be treated as “Profit in Lieu of Salary” and a business expense. A startup business can claim the tax deductions if they offer to pay the full premium or co-pay option with the employees for the group health insurance policy. If the startup decides to co-pay with the employee, they can only claim for what they pay, not for what employee’s pay.
  3. Retain Employees: As an organisation with several people associated with as employees, it is important for the company to show that the organisation cares for the employee by providing them employee benefits such as a group medical insurance policy. Many employees reported that they’d like to stay with an employer because of the benefits provided to them by the employer. Group health insurance is the most beneficial option to show that the company is concerned about its employees. Such employee benefits play a vital role in employee interaction, relation, and job satisfaction which help in the retention of employees.
  4. Attract New Talent: To attract new employees and talent, a startup should ensure providing work flexibility, career growth opportunities and a competitive salary. Along with these benefits, a startup company should also consider employee benefits such as group health insurance policy for its employees along with a good mental & health welfare programme. This effectively helps startups send a message that they care about their employees.

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Features of Ideal Group Medical Health Insurance For Startups

Each organisation has its own budget and goals to achieve. Here is a list of some ideal approaches to get group health insurance policies for its employees:

  1. Co-Pay: Since startups are new in the business sector and require financial resources to achieve their goals. Startups can choose to pay the entire premium or opt for co-pay with the employees to cut down their expenses. A few companies can also consider co-pay to allow its employees to claim tax benefits for the premiums paid towards a group health insurance policy.
  2. Provide Access to Primary Care: A group health insurance policy that provides access to primary health care is always a success. As a startup, the company should provide a health insurance plan that focuses on primary health care and reduces unwanted expenses. The primary health care includes consultations, OPD, lab diagnosis and tests, fitness rewards, etc.
  3. Matching the Average Coverage in the Market: As a startup, a company should analyse the market to determine the average coverage being offered so that the organisation can decide a sum insured for the group health insurance policy for its employee. A company must ensure sufficient coverage for their employees given the increase in healthcare treatments in India. The company can also increase the coverage as the number of employees increases.
  4. Provides Coverage from Day One: A startup company can consider providing a group health insurance plan for its employees that offers coverage from day one. It helps create a risk-free working culture and makes a sense of security among the employees, increasing productivity.

To Conclude

A new startup company may have second thoughts about offering group health insurance to employees. Group health insurance is not as crucial for a startup as for a big corporation. It helps to attract new talent. There are several perks of offering group health insurance for employees as a startup. One of them is providing health coverage to the employees at reduced prices and increasing their morale.