Mandatory Health Insurance Policy By Employers

“All employers are mandatorily required to provide medical insurance to its employee’s post lockdown.”

Prior to the introduction of order, “No. 40-3/2020-DM-I (A) dated April 15, 2020, issued as part of the Consolidated Revised Guidelines by Ministry of Home Affairs (MHA), Government of India (GOI),” as per Employees’ State Insurance (ESI) Act or Labour Law, every organisation with more than ten employees, and each employee earning salary less than 21,000 per month are mandated to be covered under ESI health insurance. However, there were no regulations about employees who are not falling under the applicability of ESI. In order to avoid this, GOI in its order stipulated that:

All industrial and commercial establishments, workplaces, offices, etc., shall put in place arrangements for the implementation of Standard Operating Procedure (SOP) before starting their functioning. Moreover, one of the SOP is medical insurance for the workers to be made mandatory.

Thus, every employer before resuming their operations are mandatorily required to provide medical insurance to its employees.

Is it mandatory for employers who have already undertaken Group Health Insurance cover?

Few organizations voluntarily undertake Group Health Insurance(GHI) cover for its employees not falling under ESI, so for them, they comply with the Government’s order. However, if the organisation does not have such a GHI Policy, then they become non-compliant and have to purchase one to be compliant.

Does group Health Insurance cover COVID Claims?

Yes, it is covered both in retail and group health products. Subject to fulfillment of conditions mentioned in the respective policies.

What if the organisation holds other Insurance Policy?

However, few organizations hold Group Personal Accident policy + Medical Extension or Workmen Compensation cover + Medical extension, yet they will be treated as non-compliant with Government order, as the regulator has clearly mentioned comprehensive health insurance coverage.

Which one to choose, Group or Individual medical cover?

Either group or individual Medical cover can be chosen as long as the health of the employees is insured.

Akash Bokaria

A passionate Chartered Accountant from Chennai with 4+ years of experience in Audit, Taxation & Business. A teacher & mentor for CA Students. Also, fond of travelling, and loves extending a hand to help entrepreneurs set up businesses.

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