New to Corporate Life: Can Someone Explain My Salary's Medical Reimbursement vs. Insurance?

I am a fresher, and I have recently landed a job in an MNC. Since I am new to the corporate world, I am having trouble understanding my salary structure. In my pay structure, the HR has included Medical Reimbursement of Rs. 15,000 per annum in my Fixed Base Pay. Additionally, under Benefits/Earnings in Kind, they have included Medical Insurance of Rs. 13,829 per annum.

Questions About Salary Structure

I have a few questions:
1. What is the difference between the two?
2. Will I receive these amounts in hand or not?
3. Are they taxable?

I am eagerly awaiting a quick reply.

Thanks

Generally, companies will have a tie-up with a medical insurance group. There will be a premium amount per annum based on the group (self/self + spouse + kids/self + spouse + kids + parents). Your company has claimed insurance for you and included the amount in your CTC. The amount has been paid on your behalf, and you can avail a sum of rupees for your medical treatments for injuries, accidents, etc., which is tax-exempt. Now, clarify the following questions with your HR department. Listed hospitals will be available for your insurance. If you receive treatment at unlisted hospitals, you can submit the bills for reimbursement of the amount you spent.

1. What is the sum insured amount?
2. What are the insurance group details?
3. Who is liable under this medical insurance?
4. Can I get a list of hospitals covered?
5. What are the claiming/reimbursement procedure details?

Please let me know if you need further assistance.

Best regards

Medical reimbursement is a component of salary, primarily designed to save tax. The company facilitates this because ₹15,000 is the maximum limit as per income tax regulations. You need to produce a bill to the company to receive this money; without a bill, you cannot claim it. In the absence of medical bills, you will receive ₹15,000 after tax deduction.

Mediclaim Insurance

Mediclaim insurance is coverage for you and your dependents (if you choose to add them). The premium of ₹13,829 that you are paying will be added to your CTC, but you will not receive any direct benefit from it. It is essentially a facility provided by the company. To save tax, the company includes this in your salary structure.

Regards

Medical Reimbursement

Medical Reimbursement: It is an amount payable to you either as a monthly amount, a lump sum payment, or against the production of medical expenses bills. The amount is taxable unless you produce the bills of expenses.

Medical Insurance

Medical Insurance: It is like any other mediclaim insurance policy and is governed by the policies of the insurers. As rightly pointed out by Ratnakaram, you will have to talk to your HR and get the details of the policy. The amount is not paid to you and is not taxable.

Regards,
Preetam Deshpande

Medical Allowance

Medical Allowance is a fixed monthly allowance that forms a part of the salary. It is paid as a fixed amount determined by the company's policy where an individual is employed, and it has no relevance to the medical expenses incurred. Medical Allowance is added to taxable income under the head "Salaries" and is fully taxable.

Medical Reimbursement

Medical Reimbursement is a reimbursement of medical expenses incurred by the employee. Employees claim this reimbursement by submitting bills and cash memos to the employer, and after verification, the employer reimburses the expenses up to a certain limit. This reimbursement is not predetermined or fixed. Medical Reimbursement up to Rs. 15,000 per annum is exempt from Income Tax.

Mediclaim/Medical Insurance

Mediclaim usually refers to Medical Insurance Premium or Health Insurance Premium. In other words, the premium paid towards a policy taken on the health of the self, spouse, parents, or dependent children can be claimed as a deduction under section 80D. However, the payment should be made by any mode other than cash to claim the deduction.

A deduction up to Rs. 15,000 is allowed in the case of self and dependent children. An additional deduction of Rs. 15,000 is allowed for the premium paid towards the medical insurance of parents, making a total deduction of Rs. 30,000 that can be claimed towards the medical insurance premium of self, children, and parents.

Furthermore, in case the premium is paid towards any senior citizen (above 65 years), an additional deduction of Rs. 5,000 shall be allowed. Thus, in the case of senior citizens, the above limit of Rs. 15,000 shall be upgraded to Rs. 20,000.

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