Is Medical Insurance Legally Required for All Employees? Seeking Clarification

Hi Friends,

I have one confusion. As per my understanding, medical insurance is compulsory, or I must say every employer is supposed to provide medical insurance to all their employees (as per law). Please correct me?

Regards,
Rupendra Mehta

Hi Rupendra,

That thank you was a mistake; I didn't intend to do it. For the same, the employer provides the ESI service, and medical is included in the CTC. Some MNCs do provide medical insurance as well.

Hope the above sorts your query.

Regards, AJ

Dear Aj,

Thank you for your reply. I am aware that as per the ESI regulations, every employer is obligated to provide medical insurance, and some MNCs do offer it. However, my query is whether the employer is required to provide this insurance to employees or if it is at the employer's discretion. In other words, is there any specific law mandating this besides the ESI regulations?

Regards, Rupendra

Hi Rupendra,

As far as my knowledge permits me to comment, the employer is not bound by any law to provide medical insurance other than ESI. However, in cases of health hazards caused by working in factories due to continuous exposure to chemicals, the company is liable to cover the entire medical cost.

Regards, AJ

I have the same opinion that there is no law for compulsory medical insurance other than ESI. However, if somebody is injured while performing his duties, he is covered under the Workmen's Compensation Act.

Understanding Employer-Provided Health Insurance

Health insurance is healthcare provided by an employer. When a company offers health insurance benefits, they pay for all or part of the health insurance premiums for their employees. Employers are not required to provide health insurance coverage to employees. Health insurance is typically a matter of agreement between an employer and employees.

By definition, health insurance coverage is an employee welfare benefit plan established or maintained by an employer or by an employee organization like a union, or both, that provides healthcare for participants and their dependents through insurance coverage or reimbursement.

Regards,
Jyoti

Employee Insurance: A Changing Scenario

Insurance for employees is not a compulsion for the employer. However, the scenario is changing quite fast, and a lot of companies are opting to insure their employees. Recently, the International CII Health Insurance Summit was held in Delhi, and the same was discussed.

Read the report for more insight on employee health insurance. Hopefully, things will improve further in the future.

Dear Health Insurance is not mandatory as of now. However, ESI, which is the health insurance provided by the Central Government, is mandatory for employees falling within a specific salary bracket. Medical insurance is provided as a welfare measure; otherwise, corporates would need to develop a scheme to reimburse the cost of treatment for major illnesses.

Regards,
Rajanassociates

Health Insurance as an Employee Attraction Tool

Health insurance is now being viewed more as an employee attraction and retention tool. With an increase in health insurance premiums over the past 3-4 years, many companies have been seen reducing benefits, especially towards coverage of parents. Much of employee benefits in insurance are now typically driven by industry-specific practices. It is seen as a given in IT and ITES industries to provide relatively more liberal benefits, in comparison to the Manufacturing sector. The size of the company and its premium-paying capacity, along with any domestic or international employee benefit policies (especially applicable in MNCs), also play a role.

Mandatory Health Insurance in the Organized Sector

There was a recent observation by Mr. Montek Singh Ahluwalia suggesting that health insurance should be made mandatory for the organized sector. However, it's a different matter to finally see it implemented. At the National Policy framing level, they recognize the uncomfortable truth that only about 2% of the population has any form of private commercial health insurance.

I will be glad to answer any further specific queries you may have on designing a health insurance policy, insurer selection, or administration of the program.

Regards,
Deepak
(Subject Matter Expert - Health Insurance)
[Email Removed For Privacy Reasons]

Seeking Clarity on Employee Benefits

I hope you are all doing well. I still have a doubt. First of all, I would like to tell you about my company. It's a logistical back office. We have a big vision for the future. Currently, 10 members are working. The issue is that they are not availing any PF, ESI, or insurance benefits. As an HR professional, I would like to provide some benefits to my staff. Please suggest a better way, my friends. I just want to know, is insurance mandatory now? If it is mandatory, I would like to know under which act it was made.

Waiting for your auspicious reply.

Thanks,
John

Good morning all, my company is a software development company, and currently, we have a strength of 15 employees. We do not have any PF, ESI, or insurance, but as an HR professional, I would like to provide some benefits to our employees. Can anyone please suggest or advise me on group medical insurance, ESI, PF, or EPF?

Thanks in advance,

Soumya

Please be informed that the employer is not bound to provide medical insurance for the employees. However, if any accident or injury occurs with an employee on the office/factory premises, the employer is completely liable for their medical treatment.

ESI Compliance Requirement

Secondly, ESI is a compliance requirement that must be fulfilled according to the salary slab and the medical amount shown in the salary, up to ₹1250 per month, for tax exemption.

Thanks
Regards

Like John and Soumya, I am also facing the same situation. I am working as an Administrative Assistant in a newly built organization. Currently, we are only 5, and the hiring process will start soon. I would like to inform you that we do not fall under the ESI Act based on the salaries paid to staff members. However, for the employees' benefit, we are planning to implement an insurance policy.

We do not provide a Medical Allowance to employees, nor is it mentioned in the salary slips. I have the following queries:

1. Can anyone suggest whether government insurance or private insurance is better? Can you recommend a good insurance company?
2. Can the employer deduct salary for sick leave, or is it considered paid leave?
3. Is it possible to provide a specific medical allowance every month to employees and have it mentioned in their salary slips instead of offering a health insurance facility?
4. If sick leave is considered paid leave, would there be no need for medical allowance and health insurance?

Thank you for your assistance in clarifying these questions.

Best regards

Dear All,

I still have a doubt regarding E.S.I being applicable up to 1.8 Lac per annum (package) for employees, as per my knowledge. Therefore, companies are opting for medical insurance to cover health insurance for all. Is this the right approach? Kindly clarify. I hope seniors will provide me with their valuable suggestions on this matter.

Regards,
Sai Kumar