Difference Between Mediclaim And Medical Allowance

hi,
i would like to know the difference between medical allowance and mediclaim given to employees.

Dear Vera,

Mediclaim is term which usually refer to an Insurance Policy which gives medical coverage to the member. It commonly has two systems:

1) Reimbursement of Medical and Hospital Expenditure upto the Specified Limits for all covered.

2) Cashless policy whereby you have to produce your Medical Insurance Cards to avail benefits.

The Mediclaim is not Taxable on the hand of the employee.

Medical Allowance is a type of allowance which forms a part of Salary and is paid at fixed interval of time (as decided) and has no connection with the expenses incurred on medical. This is usually taxable and tax relief is provided in case the employee files relevant documentary proof of medical expenditure.

The suitable Policy followed nowadays is reimbursement of Medical Expenditure. The employee is usually paid against Medical Expenditure incurred, and this amount becomes non taxable, if the employee wants he can simple ask and take the money without incurring any medical expenses but this amount becomes taxable.

Regards,

SC

Hi,
As rightly described by Swastik, mediclaim refers to an insurance policy under which all the employees are covered. The premium for this policy is paid by the company on behlf of the employees and there are companies which show premium paid to the tthird party as a part of CTC.
In mediclaim dependents of the employee are also covered as per the conditions of such policy.
Cashless facility is there and some companies provide PHS cards
(Insurance cards) for the employees and their dependents.
Medical allowance is the benefit given by the company and a part of CTC. Amount till 15,000 is non taxable if you produce the bills, any amount over and above 15000 is taxable.
This benefit is given because most of the mediclaim policies does not cover sickness or injuries where the employee did not stay for 24 hours in the hospital.
I hope now the difference is clear to you.
Cheers
Archna

Can employee provide both medical reimbursement (annual) and medical allowance (as monthly component)?