No Frill Health Insurance for Employees

A recent Insurance Regulatory and Development Authority of India (IRDAI) circular has advised insurers to offer no frills comprehensive health insurance policies to individuals or groups to enable the above-mentioned organisations to comply with the government’s directions. The regulator has also advised the insurers to devise these comprehensive health insurance products with simple wordings and conditions and at an affordable cost for the stated organisations.

As per labour law, medical insurance is available under the Employee State Insurance (ESI) Act, 1948 to those organised sector employees whose monthly wage is Rs 21,000 or less. For employees drawing above this amount, the employer is advised to provide health insurance. Since these are testing times for the employer also with no production, the regulator has advised the insurer to introduce no frills “vanilla policies” with low cost so that the financial burden is less and at the same time, the employees are covered.

Already many insurance companies like ICICI, Religare, Max Bupa have introduced such policies. These cover only the employee and cover a Group of minimum 7 employees.


It is to be seen how the employers respond to this initiative of the government.


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