Is It Mandatory for Employers to Provide Health Policies to Employees Earning Over $21,000 and Their Families?

For employees with a gross income greater than $21,000, employers are required to provide a medical health policy to the employee. I want to clarify whether the employer must provide the policy only to the employee or also to their family. Additionally, is it mandatory for the employer to offer this policy?

Hi, For employees not covered under ESI, the employer may provide them with a free Mediclaim policy, either individually or as a family, purely at their discretion. It is not mandatory; it is just an employee welfare benefit.

Legal Requirements for Medical Health Policies in India

There is no specific legal requirement under Indian labor laws that mandates employers to provide a medical health policy to their employees or their family members, regardless of the employee's gross salary.

Employee State Insurance Act, 1948

The Employee State Insurance Act, 1948, provides for a mandatory health insurance scheme called the Employees' State Insurance (ESI) for certain specified employees whose monthly gross salary is up to Rs. 21,000 (as of September 2021). Under the ESI scheme, both the employer and the employee contribute a percentage of the employee's wages to fund the insurance coverage. The ESI scheme covers the employee and their dependent family members for medical benefits.

Health Insurance for Employees Earning Above Rs. 21,000

However, for employees with a gross salary exceeding Rs. 21,000 per month, the employer is not legally required to provide a medical health policy or health insurance. It is at the employer's discretion to offer such benefits as part of the employment package to attract and retain employees. Many employers do provide health insurance coverage as an additional employee benefit, but it is not mandatory under the law.

Please note that labor laws and regulations are subject to change, and it's essential to check for updates or seek legal advice to ensure compliance with the most recent laws and regulations regarding employee benefits and health insurance coverage.

As per the Factory Act, it's not mentioned. If your organization is covered under the Shops & Commercial Establishment Act, a few states like Telangana mandate medical insurance, so it's better to refer to the State Shops & Commercial Establishment Act.