Staff Insurance

The concept of staff insurance came about during the rise of the industrial revolution. The exponential growth of factories resulted in vast and massive machinery. And working on these machines caused several accidents and work-related injuries, ranging from disabilities to fatalities. This led to the need for social protection by those who had experienced occupational dangers and mishaps, eventually bringing about several changes.

  • The demand for furnishing various perquisites on a cost-efficient scale gave a fillip to staff insurance.

  • Affordable and progressive underwriting norms, unlike those observed in individual insurance, led to the extraordinary development of staff insurance.

  • Thus, people who were refused individual insurance were able to acquire insurance on a group basis.

As time passed, multiple forms of staff insurance policies emerged that were established on a mix of advantages for the employee by the employer and state. Employees were offered benefits such as a  payout to family in case of premature demise while other benefits were paid on tenure with the employer. These benefits included regular health-checkup, cashless hospitalisation facilities, maternity benefits, covers critical illness with an extended plan, hospitalisation charges, etc. While staff insurance, as a concept, developed and expanded in the West and in advanced nations, it experienced a belated take off in India.

What benefits are available under Employee Group Health Insurance?

The employee group health insurance is the medical insurance plan that provides health care coverage to all the employees of a company. In some cases, this policy also covers families of the employee. It is one of the major perk benefits that is offered by the companies to hire talented staff. The group health insurance plans are uniform in nature, i.e. they provide the same benefits to all the employees covered in the group.

Here are the benefits that are available under the employee group health insurance:

  • Avoid undue hassles since no medical check is required for the employee as well as for the family;

  • You are eligible for all the maternity benefits immediately from the start of the coverage;

  • No need to shell out money for expensive health cover from your pocket. Even, if you need to pay a part of premium yourself, it is relatively cheaper and beneficial to opt in;

  • There is no concept of waiting-period in group plans, i.e. even the pre-existing medical conditions are also covered from the start.

  • Tax benefits are available to the companies that offer group health insurance to its employees;

  • Helps in attracting talented potential hires and keeps the existing employees motivated.

How can I structure a Staff Insurance Policy for employees ?

Structuring a Group Health policy depends on the structure of the organization. Small organizations; i.e. those consisting less than 50 employees, will have a very different set of hierarchy than that of a large organization comprised of 10,000 employees.

Depending on the homogeneity of the group members the organization may even have to purchase different policies for different work groups in the organization.

Employee compensation structure can follow any of the three approaches give below:

  • Flat Structure: All the employees are given a similar kind of cover, irrespective of their role in the organization.

  • Hierarchical Structure: Employees are given a different insurance cover based on their hierarchy in the organization.

  • Bone fide employment-based classifications: Employees are given different benefits based on work hours, different geographic locations, and lengths of services of employees located in one place.

Types of staff insurance schemes available for SMEs

Small and medium scale enterprises may have a small work setup, but when it comes to keeping the employees happy, they can do wonders. Experts in their respective fields, SMEs may find some loopholes at the administrative end that can be resolved by taking different types of insurance policies. Such policies are beneficial for the employers and the employees both, as the coverage increases while the amount paid for them gets shared.

India had around 48.8 million SMEs by the year 2013, employing 40 percent of the country’s workforce approximately. With so many informal workers employed in this sector, it is even more important to make them feel as an important part of the system by providing them exclusive coverage under different staff insurance plans.

An SME with even as small as 5 employees can go for different staff insurance schemes that can make the workforce feel safe and secure in the work environment.

Group medical insurance

The group medical insurance policy provides many other benefits that individual employees cannot avail on an individual basis, such as, inclusion of even pre-existing diseases. With group medical insurance schemes, there is no waiting period for certain diseases to be covered, and the coverage for maternity is also provided on an immediate basis.

Group term life insurance

SMEs can retain their key men by providing them the exclusive coverage under group term life insurance that will also include the wellbeing of their family members. Small companies may have a limited budget but can do extensive market research to figure out a group term life insurance that can best serve the responsibilities of their employees even if they die due to an accident during their course of employment.

Group personal accident insurance

Many group personal accident insurance policies cover not only the accidental death, but also the medical expenses along with partial and total disabilities. This staff insurance policy helps employees and their families by sharing a major part of the financial burden in case of any accident during the course of employment.

Worker Compensation Insurance

SMEs that are involved in such processes, which make employees more prone to accidents and physical injuries, need to have workman compensation insurance under the Workman Compensation Act 1923. In manufacturing and construction units where even as less as 20 workers are employed, the worker’s compensation insurance is mandatory to cover occupational diseases, accidents and injuries during the course of employment. Partial and complete disablement along with death at the workplace is also covered under this staff insurance plan.