Group insurance benefits are covers the employer buys under one master policy for the workforce, typically group mediclaim (GMC) for hospital bills, group personal accident (GPA) for accidental death or disability, and group term life (GTL) for death from any cause. The employee usually pays nothing, and the cover ends when employment does. The employer cost often shows up in CTC, depending on how the offer letter is drafted.

The three covers side by side

GPA and GTL sums insured are often a multiple of salary. Before telling staff what they have, check:

• Sub-limits on room rent and diseases, and any co-pay
• Pre-existing disease waiting period: group policies often cover it from day one, but confirm in writing
• Maternity cover, its cap, and whether the waiting period is waived
• Parents’ cover: usually a separate sum insured with the employee paying the premium
• Exit: cover stops at separation, though IRDAI’s rules let a person move to an individual policy with credit for waiting periods served, so tell leavers early

Tax and statutory overlap

A health insurance premium paid by the employer under an approved scheme is not a taxable perquisite for the employee, in either tax regime, and the employer can claim it as a business expense. Treatment of employer-paid life and accident premiums depends on how the policy is structured, so get your tax adviser’s view and see perquisites for how benefits are valued. The employee’s own Section 80D deduction applies only to premiums the employee pays personally, and only in the old regime. Section numbers changed under the Income-tax Act, 2025, so verify before quoting one.

Group cover does not replace statutory protection. Employees in ESI get medical benefits through ESIC, which is why many employers keep ESI-covered staff there and use the group policy for the rest. Work injuries are handled under ESI or the Employees’ Compensation Act, and a GPA payout should not be assumed to settle that liability. Take legal advice before treating one as an offset for the other.

Frequently asked questions

Are an employee’s parents covered under the company policy?

Only if the policy includes them, and then usually as an opt-in with its own sum insured and a premium the employee pays. Publish the enrolment window in the employee handbook.

Does cover continue after resignation?

Generally no. It lapses on the last working day, so add it to the exit checklist.

Does a GPA claim replace the Employees’ Compensation Act?

Not automatically. They are separate covers with separate rules, and statutory liability is not discharged just because a private policy pays.

Should the premium be shown inside CTC?

Practice varies. Whichever you pick, state it plainly in the offer letter so the take-home pay conversation holds no surprises.

To see what each cover costs per employee, run your numbers through the Benefits Cost Calculator.