The significance of health insurance for employees in India cannot be overstated. Consider the challenges posed by the nation’s strained public health infrastructure and costly private healthcare facilities. The Covid-19 pandemic further heightened the importance of health insurance. Besides, the country’s health expenditure is expected to shoot up with an estimated 15% of the population turning 40 in the next decade.
This demographic shift highlights the importance of healthcare and makes it one of the most crucial factors that employers can adopt to attract and nurture valuable talent. Further, the government of India has recognised the need for improved health insurance penetration and, in response, launched the Pradhan Mantri Jan Arogya Yojana in 2018. This ambitious initiative, the world’s largest health assurance scheme, aims to provide coverage of up to Rs 5 lakh for more than 100 million vulnerable families.
While health insurance mitigates the financial risk to employees due to unexpected medical expenses, it’s turning out to be an important factor driving employees to consider job offers as well as being a vital tool to retain employees.
1. Financial Protection
One of the primary benefits of health insurance is that it provides financial protection to employees along with their families. Without insurance, medical bills tend to quickly add up, causing significant financial strain. Health insurance alleviates this burden by covering a portion of the cost of medical care, reducing the amount that employees need to pay out of their pockets. This financial protection can be especially important for employees with chronic conditions or those who require expensive medical treatment. With health insurance coverage, employers can ensure that employees are protected from financial hardship in the event of a medical issue.
2. Greater access to Healthcare
When employees have health insurance, they are more likely to seek medical care when needed. This leads to early diagnosis and treatment of health problems, which can improve outcomes and reduce overall healthcare costs. Employees with health insurance are more likely to have access to preventive care services such as screenings and vaccinations, which help identify and prevent health problems before they turn serious.
3. Family Coverage
Organisations can also offer health insurance plans to cover one’s family, a very important factor for employees in safeguarding dependents and family members. This is vital for families with children or elderly relatives, who may require more frequent medical care. Family coverage can ensure that everyone all members have access to healthcare services when needed, providing peace of mind and reducing the financial burden associated with healthcare costs.
4. Increased employee morale and productivity
Health insurance helps ensure employees have access to the medical care needed to maintain health and well-being. This, in turn, could lead to fewer sick days and a more roductive workforce overall. When employees have health insurance, they feel more secure and valued by their employer. This could lead to improved morale and job satisfaction, as employees are more likely to feel supported and cared for. When employees are happy and engaged, they are more likely to be productive and committed.
5. Tax Savings
Employer-sponsored health insurance plans may offer tax savings for employees. Contributions made to health insurance plans are typically on a pre-tax basis, which help lower employees’ taxable income. Besides, employees may be able to benefit from flexible spending accounts (FSAs) or health-saving accounts (HSAs), which allow them to save money on a tax-free basis to pay for eligible medical expenses.
That said, with the high cost of medical care, health insurance is an essential aspect of an employee’s overall compensation package that cannot be overlooked. Employers who invest in their employees’ health and well-being through health insurance are more likely to have a happy, healthy and productive workforce.