Group Health Insurance

Group Health Insurance is a single health policy issued to a defined group — typically an employer covering its employees, but also extended to associations, professional bodies, banks covering credit-card holders, and large-scale community schemes. The contract is between the insurer and the group's policyholder (the employer or association), and the individual members are 'insured persons' under that master policy rather than policyholders in their own right. Premiums are negotiated at the group level based on the demographic profile of the population, the historical claims experience of the group, the sum insured chosen, and the rider structure (maternity, parental cover, OPD).

Group health policies typically dispense with most waiting periods that retail health insurance imposes — the 30-day cooling-off, the specific-disease 24-48 month waiting, and the pre-existing disease 24-36 month waiting are commonly waived in standard corporate group plans, which is a structural advantage of employer cover for new joiners with PEDs. Worked example: a 250-employee technology company offers a ₹5 lakh family floater group health policy to all employees with spouse, two children, and optional parental top-up at employee cost. The company pays an annual premium of around ₹35 lakh — roughly ₹14,000 per employee for the base cover — and the policy operates with cashless across a 7,000-hospital network through the appointed TPA.

An employee with diabetes diagnosed in 2023 joining in October 2025 has full cover for diabetes-related hospitalisation from day one, because the corporate plan waives the PED waiting. A common misconception is that group health insurance is a complete substitute for an individual policy. It is not — coverage ends when employment ends (subject to the IRDAI portability route, which allows a member to convert group cover into a comparable individual policy with continuity of waiting-period credits, within 30 days of leaving the employer), and the sum insured is often modest relative to a major hospital bill.

The recommended structure for a salaried professional is to maintain a personal indemnity policy in addition to the employer cover, sized to handle the worst-case scenario, and use the employer cover as the first-loss layer. Another common misconception is that group cover sums insured are stackable across policies. They are subject to the same indemnity and contribution principles as retail health — multiple group covers do not pay the gross sum on a single claim.

The group cover and the personal cover together pay the actual hospital bill, apportioned across the policies, never exceeding the actual loss. Related: family-floater, restoration-benefit, sum-insured.