Why should MSMEs and small businesses opt for group health Insurance?

Health insurance is a modern necessity and there has been a consistent rise in the level of awareness among people regarding its utility. Businesses are realising its potential in terms of attracting and retaining a great talent pool, while the employees are finding its benefits in the financial security it provides. 

Legally, all employers would now have to provide their workers with insurance. According to reports : “The Ministry of Home affairs in its directive has made it mandatory for all employers to provide health insurance to its employees, as and when they resume functioning post the lockdown.” Furthermore, the new guideline states that “all Insurance companies may offer comprehensive health insurance policies either to individuals or groups in order to enable the listed organisations/employers/establishments to comply with the stated directive.” 

The big companies already have an established policy around group health insurance but as small businesses and MSMEs are growing, it is crucial that they opt for group health insurance. So, why should they go for it and how does it benefit them?

1. Recruitment and retention

Small businesses need to provide additional incentive to the employees in order to attract and retain great talent. Offering health insurance benefits is a great perk and it reduces the overall cost of hiring for the company. Employees use the insurance benefits to get regular checkups, maintain a healthy lifestyle, reduce the risk associated with health in the long-run, and this reduces absenteeism. Healthier employees are happier and more productive, an asset for any company.

2. Lower premiums

Group health policies tend to be much cheaper than individual policies and viable for insurance companies as well, as they insure a large number of people together. This means that it reduces insurance cost for the company as well as the employees who may not need to purchase another policy out of their own pockets.

3. Tax incentives

Companies that offer health cover for their employees get tax benefits and this expenditure can be reduced from their taxable income to certain limits, year to year. Small companies and businesses can also benefit from certain tax breaks if they offer health cover for their employees. The net effect of proving group cover is financial savings and secured employees.

4. Security for people in the unorganised sector

MSMEs and small businesses are the biggest employers of unskilled, semi-skilled, and workers from the unorganised sector. These workers are often those who do not have health cover and spend large chunks of their income/savings on medical expenses. When MSMEs opt for group health policies, they also help in securing the future of the unprotected members of the society and help them become financially stable.

5. Highly customisable

Group health policies are highly customisable and small businesses can tailor them to suit the exact needs of their employees. These policies can also be customised based on the type of industry the business is involved in. For example, a small jewellery business could opt for a policy that provides for regular eye checkups. It will benefit the workers in the industry who work on small details of the jewellery the entire day affecting their eyesights.

6. Coverage from the first day

One of the most important benefits of a group policy is that the employees get covered from day one. They do not have to wait for long periods before claiming benefits, and people with pre-existing conditions may also file claims if they need to. Furthermore, they do not need a pre-medical checkup for the cover to kick-in either for themselves or their family members who get covered in the policy.

Photo by Marily Torres from Pexels.

OneAssure is a distribution platform that helps you make right decisions on matters where health and finances converge. Visit to know more about your health insurance choices.

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