How Corporate Health Insurance Benefits Employees and Employers

What makes a company a great place to work?

Is it a good salary, flexible hours, or a fun work culture? While all of these are important, there’s one benefit that often gets overlooked—health insurance.

Employees spend most of their adult lives at work. Knowing that their employer will support them during health issues provides a sense of security. For companies, health insurance isn’t just a rule to follow, it’s a way to build a healthy, motivated workforce.

Let’s explore what corporate health insurance is, how it works, and why it benefits both employees and employers.

Key Highlights

• Covers employees from day one for medical expenses, including pre-existing conditions and maternity care.
• Boosts employee morale, retention, and productivity by reducing health-related stress and absenteeism.
• Helps attract top talent with competitive benefits in a crowded job market.
• Offers tax benefits to employers, lowering overall business tax liability.
• Supports overall wellbeing with preventive care, mental health coverage, and wellness programs.

What is Corporate Health Insurance?

Corporate health insurance is a group health policy purchased by a company to cover its employees. It protects them against medical emergencies, illnesses, and accidents.

Earlier, offering health insurance was optional. Only a few companies treated it as an added perk. But after COVID-19, the IRDAI and the Ministry of Home Affairs made it mandatory for all employers to provide health insurance to their staff as part of workplace safety.

This shift ensured that employees had basic health coverage with a sufficient sum insured.

How Does Corporate Health Insurance Work?

Basically, the company provides a wallet amount and offers different individual and family floater plans along with add-ons. 

As per their needs, the employee is given the flexibility to choose the plan and sum insured. If the premium of the plan they have chosen exceeds the wallet capping, the extra amount will be deducted from the employee’s salary.  

Key Benefits of Corporate Health Insurance for Employees

1. Coverage for Medical Expenses

One of the major benefits of corporate health insurance is that it covers hospitalisation expenses, doctor consultations, diagnostic tests and other medical charges. Employees are relieved from utilising their savings when there is a known/unknown sudden hit on their health.

2. Pre-Existing Disease Coverage

Unlike individual health policies, which often come with long waiting periods for pre-existing conditions, corporate health insurance provides immediate coverage for diseases like diabetes, hypertension, or asthma.

3. Maternity Benefits

Most of the corporate policies cover maternity costs, which include delivery expenses, pre and post-natal care & baby coverage. Few even cover C-sections & complications during or after pregnancy without any waiting period.

4. Support During Medical Emergencies

Medical emergencies can be unpredictable and expensive. A corporate health plan ensures that employees and their families get the best possible treatment without financial stress.

5. Mental Health Coverage

More companies are including mental health benefits in their policies. It has become a common coverage that includes therapy sessions, psychiatric consultations, and stress management programs.

Key Benefits of Corporate Health Insurance for Employers

1. Attracting Top Talent

In the current competitive job market, the leading professionals search for companies that offer surefire benefit schemes in hiring. Good health insurance can be the compelling factor in choosing one job offer over another.

2. Boosting Employee Morale and Productivity

Employees work better when they know their health and finances are being taken care of, thus reducing stress and increasing focus and overall productivity.

3. Lower Absenteeism

A full-fledged health plan results in periodic visits and preventive care, which in turn reduces the number of unhealthy days and, hence, healthy employees

4. Strengthening Employer Branding

Companies that provide corporate health insurance get noticed as responsible and employee-friendly, which enhances their image, making them appealing to employees as well as customers.

5. Tax Benefits

Employers can get tax deductions on the premium paid for group health insurance policies, which is helpful in reducing the overall tax liability of the company.

How Corporate Health Insurance Enhances Employee Wellbeing

Corporate health insurance is not just about medical coverage; it plays an important role in preventive healthcare as well. Most companies provide:

• Yearly medical check-ups to catch diseases early.
• Wellness programs might include gym memberships, yoga classes, and help with nutritional planning.
• Mental health support, stress management workshops and therapy are being covered. 

Initiatives like these make sure employees are healthy physically as well as mentally.

Tax Benefits for Employers and Employees

For Employers

The complete cost of insurance premiums for corporate health can be deducted from taxable income by employers. Some of the inclined businesses are:

• Sole proprietorships
• Partnership firms
• Private and public companies
• Startups and mid-size enterprises

For Employees

Employees cannot claim deductions relating to corporate health insurance under Section 80D of the Income Tax Act because the premium is paid by the employer. Employees can claim a deduction only for any separate personal health policy they may have.

Types of Corporate Health Insurance Plans

1. Contributory Plan

• Both employer and employee share the insurance premium cost.
• Employees contribute a part of the premium by way of payroll deductions.
• It reduces the financial burden on the employer while ensuring employee participation.

2. Non-Contributory Plan

• Financed by the employer solely.
• In this case, no employee contribution is made towards the premium.
• Considered a great value among employee benefits, thereby increasing retention and morale.
  

Choosing the Right Corporate Health Insurance Plan for Your Workforce

Companies should consider the following when deciding on a corporate health insurance policy:

• Coverage – Have you checked if the coverage includes dependents? Does it cover OPD? Or Mental Health?
• Pre-existing conditions - Are they covered from Day 1?
• Claim process – Is it easy and hassle-free?
• Cashless hospital network – Does it offer the best hospitals?
• Additional wellness benefits – Are preventive check-ups and mental health support included?

How Corporate Health Insurance Can Improve Employee Retention

Employee turnover is a major challenge for businesses. Providing a comprehensive health insurance plan helps:

• Reduced turnover: Employees are less likely to leave a company if they know their health costs are covered.
• Increase loyalty by ensuring employees feel valued and safe.
• Create a work culture where employees will trust their employer to ensure their well-being.

A company that invests in employee health is investing in long-term success.

Corporate health insurance stands out not only as a compliance requirement but also as a strategic investment, an investment in the well-being of employees and, in return, the future growth of the business. 

In terms of employee benefits, health insurance schemes give financial security, better access to health care, and peace of mind!