Is Group Health Insurance Mandatory for All Industries? Seeking Clarity on Regulations

Is it mandatory to take a group health insurance policy for all industries?

Is it mandatory to take a group health insurance policy for all industries for their employees? If so, is there any government circular for this?

Regards, Jitendra

Medical insurance and the Employees' Compensation Act

Medical insurance to cover compensation as per the Employees' Compensation Act is mandatory. At the same time, in respect of employees who are covered by the ESI Act, the same is not mandatory.

As Mr. Madhu said, taking Employee Compensation Insurance to cover the employer's liability towards injuries or death arising out of employment accidents for a certain class of employees under the Employees' Compensation Act of 1923, and subscribing to the ESI Scheme under the ESI Act of 1948 for employees with a monthly salary of not more than Rs. 21,000 employed in any notified industry, are mandatory. This excludes the application of the EC Act to those employees covered by the ESI.

In the absence of coverage under either of the above or additionally, it is at the discretion of the employer to provide health insurance for all employees and their families as an additional welfare measure.

There is no provision in any act to make medical insurance compulsory for individuals working in any organization. However, as members have pointed out, under the Workmen's Compensation Act (now called the Employee Compensation Act), in case of injury in the course of employment, the employer will be liable to pay the cost of treatment for those who are not covered under ESIC. To protect the company, it is recommended that the company take a WC Policy to cover the risk stated above.

For those with a salary of less than ₹21,000 a month, ESIC is compulsory in the areas that are notified (and in organizations with more than 10 employees). That is a form of medical insurance.

Other than ESIC, there is no mandate in law for compulsory medical insurance.