Medical Insurance Premium Paid by Employer

Many organisations provide Health Insurance benefits to its employees as a part of its HR policy. Some organisations extend the coverage of their group health insurance to the family members of their employees as well. Not only this helps the companies in retention of employees and in reducing the attrition rate, but also it provides them with many tax benefits.Below are the prominent benefits of a group health insurance plan from the perspective of employer as well as employees:

In the present scenario, where the healthcare costs are spiralling to a greater height with each passing day, offering corporate health insurance to the employees can go a long way in keeping them motivated. By insuring their employees against the exorbitant medical costs, the employees can keep their workforce inspired and loyal towards them.

Increasing attrition rate have been a reason of concern for most of the employers these days. Offering health insurance benefits to the employees have come across as one of the most preferred ways for the organisations to retain their talented employees and reduce the attrition rate.Some employers also cover the family members of their employees under the group health insurance provided by them. This makes their employees more attached towards them.

Another benefit of a group health insurance plan provided by the employers is that it provides health insurance coverage to a number of people at relatively lower costs. This is because insurance companies usually offer huge discounts to corporates who are willing to buy a large group health insurance policy for covering many people at once.

Unlike an individual health plan, no medical check-ups are required to include a person in a group health insurance policy. As soon as an employee joins a company offering a group health plan, he/she comes under the coverage of the policy by default.

Again, unlike an individual health plan, there is no concept of waiting period when it comes to a group health insurance policy. This means that even the pre-existing diseases and the critical illnesses such as heart issues, diabetes etc. are covered by group health plans right from the Day 1.

By paying health insurance premiums for his/her employees, an employer can avail certain tax benefits as well. Irrespective of the amount of premium paid by the employer, he/she can claim it as company’s expenditure and reduce his/her tax liability.Additionally, some employers may ask their employees to pay a portion of the premium for group health insurance offered by them. In such a case, the employees can also avail tax deductions under section 80D of The Income Tax Act, 1961.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.