Can Contract, Gig, or Temporary Workers Be Covered Under GHI?

A group health insurance plan is a type of health insurance that covers the medical expenses of a group of individuals, including workers and contractors and their family members. It can also cover a specific group, such as the members of an association. Many companies provide group health insurance coverage as a part of their compensation package.

A group mediclaim policy provides coverage for various expenses and services, including hospitalisation expenses, daycare treatment, ambulance charges, pre-and post-hospitalisation costs, etc. These plans carry much lower costs than individual plans for each worker. They can also cover the worker’s family members, including spouses, children and parents.

As per the Insurance Regulatory and Development Authority of India (IRDAI) regulations, a group health insurance policy opted for by a company must include at least 7 lives. The term “lives” in this context means any individual covered by the insurance policy and not just a contractor/worker. In other words, group insurance eligibility includes any person, including family members and dependents.

While group insurance plans must have at least 7 members, insurance companies are free to impose their own minimum group size requirement. Public insurance companies generally require at least 100 lives for group insurance plans, while standard corporate insurance plans offered by private insurers typically require at least 50 lives to be insured.

Microinsurance group plans are allowed to include 5 to 10 members as per the IRDAI Micro Insurance Regulations, 2015.

Eligible employees for health insurance include contract/gig/temporary workers who have a long-term association with the employer.

Since the COVID-19 pandemic, health insurance companies have been providing the option to include all workers, including part-time, temporary and gig workers and contractors, according to guidelines issued by the IRDAI. However, freelancers are generally not covered by employers. Whether a contract worker is covered or not depends on the terms and conditions of the employment contract made by the employer.

Companies may also cover interns, remote workers and apprentices. Many private companies require contract workers to work for a certain period of time before offering health insurance for gig workers. When the gig worker leaves the organisation, the medical coverage typically ends.

Some group health insurance plans are meant for salaried employees only. They require employees to have a registered employer identification number (EIN) and be included in the company’s payroll. These plans don’t include freelancers, temporary workers and contract workers.

Group health insurance policies cover contractors and temporary employees, dependent family members, non-residents and sometimes, contractual workers. Here are the group insurance eligibility criteria:

Eligible Members: Anyone working at any organisation in India is eligible for their employer’s provided health insurance coverage. Salaried individuals working at government organisations are also eligible for government-provided group insurance schemes. For any organisation with more than 50 workers, health insurance coverage is compulsory.

Employment Status: Most group insurance products are designed for salaried employees. However, in recent years, insurance companies have started providing group insurance for contract workers and gig employees, provided that they meet certain eligibility criteria, like working over a certain number of hours. Temporary employees and gig workers should check the organisation’s policies and insurance terms to know if they are eligible.

Waiting Period: Many workers’ group health insurance plans have waiting periods during which new workers are not covered. Depending on the plan, this can range from a few weeks to a few months when certain medical benefits, such as pre-existing diseases and maternity cover, are not covered.

Age Limit: As per standard health insurance norms, senior citizens or people beyond 65 years of age are usually not covered. A group insurance policy may cover older workers or their dependents under custom arrangements. Dependent children may have certain upper age limits to be covered under these plans.

Workers’ Contributions: Depending on the type of group health insurance plan chosen, employers may require their workers to make a certain percentage of their salary as contributions. Workers can voluntarily increase their contributions up to a certain amount to get better coverage. There is no limit on the amount of the employer’s contributions.

Also Read: Group Health Insurance Eligibility

While coverage exclusions vary from one insurer to another, most group health insurance plans do not cover the following:

• Solo Entrepreneurs: Most group health insurance plans require at least five members to be eligible. Therefore, a solo entrepreneur without any helpers, workers or contractors is not covered. Instead, they should get an individual health insurance plan offering comprehensive medical coverage.

• Dependents: Only some group health insurance plans cover dependents, including spouses, dependent children and parents. Some of these plans may have additional requirements, such as requiring extra worker contributions and a limit on the number of members covered.

• Family Business: Group health insurance policies generally do not cover only the employer’s or business owner’s spouse in the plan. Family-owned businesses may include multiple family and external members can be included as workers alongside the business owner’s spouse under one plan.

There are different types of group health insurance plans based on coverage limits, costs, contributions and other parameters. Here are some of the types:

Basic and Comprehensive Plans: Based on the coverage offered, group insurance policies can be basic or comprehensive. Basic plans usually cover only hospitalisation expenses, whereas comprehensive plans cover pre- and post-hospitalisation expenses, daycare treatments, home treatment, organ transplant and more. TATA AIG’s Group Health Insurance Plan also covers maternity expenses and family transportation, and offers benefits like zero waiting periods and no medical checkup requirements.

Contributory and Non-Contributory Plans: Contributory plans require group members (contractor/gig worker) to pay part or full premium costs to avail the corporate health plan. Usually, a fixed percentage of the worker’s salary (e.g., 5% or 10%) is deducted while the employer matches or pays a higher percentage. In non-contributory plans, workers don’t have to pay anything.

Employee Only and Employee & Dependent Plans: In employee-only plans, the employer only covers the workers, including contract workers and temporary employees. In plans covering dependents, workers can choose to add their spouses, dependent children and dependent parents. Some plans may require additional worker contributions to cover family members.

Group Health Insurance Add-Ons: Many insurers allow employers to customise their group insurance policies with add-ons or riders to add specific coverage. Common add-ons include maternity benefits, critical illness insurance, wellness programmes, pre-and post-natal care, and day one coverage for newborn babies.

Also Read: Types of Group Insurance Plans in India

Benefits for Employers

• Ensures Legal Compliance: Since the COVID-19 pandemic, the government has made it mandatory for commercial and industrial establishments to provide health insurance coverage to contractors.

• Low-Cost Plans: As this type of health insurance covers many individuals, the prices are much lower compared to standard health insurance plans for each contractor/gig worker. Insurers offer much lower premium rates when covering many individuals.

• Improved Retention and Job Satisfaction: Medical insurance coverage is seen as a crucial gig employee benefit these days. It contributes to a better working environment and peace of mind for contractors and gig workers, leading to higher job satisfaction and retention rates.

• Improves Company Reputation: Some of the biggest and most prominent corporations offer significant health insurance benefits to gig employees. Thus, with a group insurance policy, your company can build a good reputation and attract top talent over your competitors.

Benefits for Contractors/Gig Workers

• Low or Zero Costs: Depending on whether your employer has opted for a contributory or non-contributory plan, you may pay small amounts or nothing to get health insurance coverage. Even with the latter, premium contributions are much lower compared to standard health insurance plans.

• Family Coverage: Some employers allow you to add family members to group health insurance plans. You can cover your spouse, dependent children and parents in the same plan at affordable costs.

• No or Low Waiting Periods: Contractors associated with an employer for a long time can get immediate health insurance coverage with minimal waiting. Some plans have zero waiting period, so you can get day one coverage.

• No Medical Checkups: Many group mediclaim policies don’t require you to undergo medical checkups to be included in the plan. This saves you hassles and ensures that your medical treatments are covered.

Also Read: Employee Health Insurance: Benefits & Coverage

Before you choose a group health insurance policy for your temporary employees, contractors and gig workers, check the following important factors:

• Contractor’s Needs: To cover multiple people, you need to understand the medical needs of an average gig worker/contractor. Check things like age, family status, and current health conditions of your contractors to choose the right plan.

• Flexibility: Offering a flexible plan is important, especially for temporary workers’ group health insurance. A good plan should offer multiple coverage options, affordable premium rates and the option to modify coverage with add-ons.

• Value for Money: While it’s tempting to choose the most affordable plan, you should consider how much value your chosen options are offering for the premium. Before selecting, ensure to compare multiple plans from different insurers and check the sum insured limits and coverage options.

• Evaluation of Insurance Providers: You need to choose a reliable insurer that provides good customer service and ensures to fulfil claim requests on time without a high risk of rejection. To do this, evaluate the Claim Settlement Ratio (number of claims settled/claims received) of the insurer and check customer reviews and ratings.

• Policy Terms and Conditions: Every insurance policy has its own terms and conditions for what it covers and what it excludes. Before selecting a plan, you should go through its policy wording document line by line to understand the inclusions, exclusions, coverage limits and claim procedures. Make sure there are no hidden terms that you miss.

Group insurance policies offer employers complete flexibility in choosing the coverage, limits, and the option to include contractors and gig workers. As medical insurance grows in importance in the country, employers with group health insurance will enhance their reputation in the market and win over the most talented contractors. For gig workers, employers offering health insurance coverage are extremely lucrative.

In the modern age, businesses must protect their assets, operations and contractors against a wide variety of risks, including fire, theft, transit damage, worker injuries, and more. To cater to this, TATA AIG offers a variety of small business insurance plans, such as marine cargo insurance, fire & burglary insurance, and others. Explore our plans and choose the one that protects your business risks.