does an employer have to offer health insurance to all full time employees?

There is no current statutory mandate that an employer compulsorily offers group health insurance or group mediclaim benefits to its employees. However, employers have a legal requirement to provide ESI benefits for all their employees whose wages are up to a specific INR limit. Currently, at the time of writing this answer, it stands at Rs 21,000 per month.

Many companies, however, post covid have realized the importance of offering group health insurance plans to their employee. A group insurance cover makes you an employer of choice and adds to the peace of mind for your employees. They know now that if any hospitalization happened, they would not be paying gout of their pockets.

Some reasons why employers want to offer group health insurance/group mediclaim policies include

• Competitive Benchmarking – Peers in the industry are offering the same benefits. The organization wants to benchmark its compensation against what others are already giving to their employees.
• Employees’ healthcare costs are sometimes being funded on an ad hoc basis by the employer. This phenomenon is more prevalent in small businesses where team members are deeply connected with the founder(s). This practice leads to unpredictable costs for the employer. Having a group health insurance policy allows for assessing per employee costs much more accurately.
• Retention of employees – Organisations have been known to retain employees because of the benefits/perks they give to them.

When an employer chooses to offer group health policy benefits to its full-time employees, they can extend the same benefits to part-time employees and contractual workers.