A Guide to Group

Health Insurance
A manual for designing a Group Health Insurance and benefits
plan that covers your team’s needs while meeting your budget.

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i | Introduction

Introduction
So, you've got an idea, hired your dream Insurance can feel like a giant jigsaw

team, and are working towards building puzzle, albeit with pieces that constantly

something you are proud of.

change their shapes. Between industry

jargon that sounds like ancient Greek

While everyone's focused on bringing their A-game to
(which, coincidentally, is where
work, something important behind the scenes needs
insurance was born) to dealing with a
your attention—ensuring that your team’s
million customisations, finding the
healthy and protected so they can do
perfect fit for your team may seem
what they do best, without worrying.

daunting.

With that in mind, you start exploring healthcare and And this is where we come in.

benefits plans to protect your team. However, as soon

as you step into the world of group health insurance

(GHI) and health benefits, you find yourself drowning

Think of this guide as your friendly GPS
in an ocean of jargon, complex terms, and endless
through the overcrowded and
options.

overlapping lanes of health insurance

Take a deep breath.

and benefits – helping you understand

You're not alone in this.

the nitty gritties of each benefit. We cover

why they matter, what gaps you must fill,

In our conversations with over 4,000 and how you can build a benefits policy

organisations, we've seen the same that suits your team’s needs while not

furrowed brows and heard the same breaking the bank.

sighs of resignation.

"Which coverage is right for us?"

"What does a deductible even mean?"

"How do we balance comprehensive

care with our budget?"

Guide to Group Health Insurance

ii | Index

Index
Forget table stakes - today, benefits
Costs 23

are the table. 01 Rising costs, an ongoing concern 24

Modern talent isn’t looking for perks,

Three things that will impact your premiums 25
it’s looking for proof that you care. 02
Common cost mitigation strategies 26

Health Insurance 03 What could a 1% shift in the

compensation budget do? 27
Family Coverage 04
How to build sustainable plans, not reactive ones 28
Sum Insured 06
Conclusion 29
Mother & Child 10
Conclusion 30
Room rent limits 13
FAQs 31
Pre-existing diseases 15
About Plum 32
Healthcare & Wellness 17

Every rupee spent on wellness saves INR 132.33. 18

What comes under health and wellbeing? 19

Benefits flop when the experience doesn’t click.

22

Guide to Group Health Insurance

01 | introduction | Forget table stakes - today, benefits are the table.

Forget table stakes -

today, benefits are
the table.
India's healthcare At the same time, it’s a worthwhile investment for
employers, considering

system reveals a According to Assocham, employers can save

about ₹132 for every ₹1 spent on employee
troubling dichotomy.

health insurance.
Replacing an individual employee can cost
While public schemes cater to economically weaker anywhere from half to twice the employee’s
sections, private insurance can only be afforded by the annual salary.

affluent few. Between these two groups is a vast gap

where people who don’t qualify for government aid or In the early days of your startup, each team member is
afford private insurance lie.

indispensable. Imagine losing your first marketing hire

or developer, because you weren’t there during a
medical emergency that could have been mitigated.

Presenting to you, India’s missing middle:

400 million individuals with no health When employees face such emergencies without
insurance, navigating life in the hope coverage, the trust they place in you can shatter in a
moment of crisis. Rebuilding it can cost your
they’ll never face costly medical care.

business more than you realise.

Moreover, the sooner you buy insurance for your

team, the more affordable it will be. Premiums will
With out-of-pocket spending consuming never be as low as they are right now. (It shot up by
a whopping 50% of healthcare spending, 12-15% last year.) Hence, every year you delay making
compared to a global average of just a decision means more money left on the table. To
28%, most Indian employees are one make matters worse, you're leaving your most
valuable assets exposed.

medical emergency away from crippling

their bank balance.
This section of the population largely depends on their
employers for insurance.

Guide to Group Health Insurance

02 | introduction | Modern talent isn’t looking for perks, it’s looking for proof that you care.

Today’s employees aren’t

looking for perks, they’re
looking for proof that
you care.
It's no longer just about compliance.

Health Insurance
With employees spending almost a third of their lives
Health insurance serves as a financial safety net,
at work, they expect to be taken care of. Think caring
covering medical expenses for illnesses, injuries, or
for employees is costly? Wait until your founding team
preventive care that require hospitalisation. However,
member gets poached by a competitor offering a more
it typically excludes outpatient benefits such as
comprehensive benefits package.

consultations, medications, diagnostic tests, and more.

The modern care package needs to extend

In 2020, the IRDAI passed an order
beyond traditional norms. It must address the

physical health, mental well-being, and financial making it mandatory for companies to

security of employees and their families.

provide medical insurance to their team.

A holistic benefits plan lifts the weight Healthcare & Wellbeing

off your team’s shoulders, reassuring Prevention isn't just better than cure - it's more cost-

them that you see them as whole effective. Think OPD benefits, doctor consultations,

annual health check-ups, mental health support,

individuals, and not just resources.

fitness programs, and holistic wellbeing initiatives that

show you're invested in your employees' long-term

health.

Guide to Group Health Insurance

03 | Health Insurance

Health
Insurance
Family coverag
Sum insure
Mother & Chil
Room rent limit
Pre-existing diseases

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04 | Health Insurance | Family Coverage

Family Coverage
What does it mean? What do most
Group Health Insurance (GHI) allows you
companies offer?
to cover not only employees but their
In companies with 2-100 employees:
dependents as well.

While the definition of family varies for everyone, you

can choose from the following three options: 

28% offer E-plan

E-plan: Covers only the employe

ESC-plan: Covers the employee, their

45% offer ESC-plan
spouse and up to four childre

ESCP-plan: Covers the employee, their

27% offer ESCP-plan
spouse, parents/parents-in-law and up
to four children

Before you ask – your plant Hari, the coffee maker you
have a borderline unhealthy relationship with, and that Did you know?
cat who's basically your common-law spouse,
unfortunately, do not make the cut.
More than 40% of total claims raised in 2023-24
were for an employee’s parent. Broader plans like
ESCP may have higher upfront costs, but in
hindsight, they provide essential coverage for
parents, who account for a significant portion of
claims. Truly inclusive and comprehensive care
means extending support to an employee's
dependents as well.

Guide to Group Health Insurance

05 | Health Insurance | Fa il Co era e
m y v g

How does each plan How to choose?

affect my premium? Younger Teams (Under 25)
Fewer responsibilities (e.g., not married, no
The choice of members covered has the children). An E-plan works well
highest impact on the premium that the
organisation has to pay.

For comprehensive coverage, include parents (E+P)

as they are often the only dependents. Parents
The premium for a parent can be 10x that of an typically claim for pre-existing diseases (PEDs),
employee because of the additional risk of ageing which individual plans exclude without waiting
periods. Group Health Insurance (GHI) is ideal for
As a result, the premium can increase anywhere this.

between 2-5x from an E-only plan.

Married or Soon-to-be Married Teams

An ESC plan accommodates the evolving needs of

spouses.

Assuming we are building a plan for a team of 30

employees, with an average age of 30 years, where
50% of them are married and have a child each:

Teams with Dependents

E-plan to ESC-plan (Employee + An ESCP plan provides the most comprehensive
Spouse + Child): coverage for folks with dependents including spouses,
ageing parents and children

You can expect to pay anywhere between 1.5 to 2X

the premium.
This depends on what percentage of your employees
are married. ❤️At Plum, same-sex partners and
live-in partners are covered from day 1.

E-plan to ESCP-plan (Employee +

Spouse + Child + Parents):

The premiums become 3X to 4X of the E-plan

Why? You have added 2X more lives to the plan
(2 parents for every employee). These parents are in
the higher age band (50–70 years), where the
premium per life is 2-3X of those in the lower age
band (18–35 years).

*Disclaimer This is an estimate of the real costs.

:

Actual premium calculations depend on underwriting

risk across various factors, and the gures presented
fi

here are approximations for understanding.

Guide to Group Health Insurance

06 | Health Insurance | Sum Insured

Sum Insured
What does it mean? How to choose?
The Sum Insured (SI) is the maximum
Understand your team’s
amount the insurance company will pay
demographics
for an employee's medical expenses or
Younger Teams (Under 25)
treatment during the policy period, Teams with members under or around the age of 25
including hospitalisation, medical tend to have fewer responsibilities
treatments, and other health-related
Recommended SI: INR 2-4 la
expenses, as defined in the policy.

Priority: Invest heavily in health and wellbeing

For teams with married members

Think of it as your corporate healthcare credit limit.

Require coverage that addresses family planning

and maternity needs, alongside standard health
coverage
Recommended SI: INR 4-5 la
What do most
Maternity Sub-limit: INR 50k-1 la
Priority: Comprehensive maternity coverage

companies offer?
For teams with Dependents

In companies with 2-100 employees :

Have diverse needs across different age groups,

ranging from children to parents, with more lives

of companies offer covered.
38%
INR 1-3 lac SI Recommended SI: INR 5-7.5 la
Priority: Comprehensive care, including primary,
preventive, maternity, and geriatric coverage.

of companies offer
40% INR 4-6 lac SI

Work location

f most of your employees work out of tier-1 cities or

of companies offer
12% I

your office is based out of a tier-1 city like Delhi,

INR 7-10 lac SI

Bangalore, or Mumbai, then the cost of treatment

of companies offer more would be higher.

10%
H ,w
than INR 10 lac SI
ence e recommen d choosing a sum
ins ured of at least INR 5 lac.

Guide to Group Health Insurance

07 | Health Insurance | Sum Insured

For your reference, here are the costs of some of the

common treatments in tier-1 cities:

Cardiovascular diseases Kidney-related ailments

City Minimum Price Maximum Price City Minimum Price Maximum Price

Bangalore INR 70k INR 6 lac Bangalore INR 1,000 INR 5,000

Chennai INR 1.5 lac INR 6 lac Chennai INR 750 INR 7,500

Hyderabad INR 1.5 lac INR 8 lac Hyderabad INR 1,200 INR 5,000

Kolkata INR 1.15 lac INR 4.5 lac Kolkata INR 900 INR 7,700

Mumbai INR 1.4 lac INR 7 lac Mumbai INR 600 INR 6,000

New Delhi INR 1.7 lac INR 4.5 lac New Delhi INR 1,500 INR 5,000

Cataract However, if your team works out of a tier-2

or tier-3 city, the cost of treatment would
City Minimum Price Maximum Price be comparatively lower. A sum insured of
INR 3-5 lac should be sufficient.

Bangalore INR 9,000 INR 1.84 lac

Chennai INR 10,800 INR 50k

Did you know?
Hyderabad INR 8,000 INR 1.5 lac Ayushman Bharat Pradhan Mantri Jan Arogya
Yojana (AB PM-JAY) offers a sum insured of 5L
Kolkata INR 8,000 INR 1.2 lac per family. Additionally, a median claim amount
ranges between INR 2-2.5 lac. Between 2023-24,
Mumbai INR 8,000 INR 1.25 lac a whopping 66% increase was noticed in the
median sum insured, from INR 3 lac to INR 5 lac.

New Delhi INR 10,500 INR 1.2 lac

Guide to Group Health Insurance

08 | Health Insurance | Sum Insured

Team’s salary & lifestyle

The best talent comes with great expectations, by
virtue of their working at the best employer brands in
the country.

They prefer premium healthcare, better amenities,

higher room rent limits, and more comfort, which
means a larger sum insured would be ideal.

Here is a chart to help you

easily choose your SI amount:

Young teams: INR 3 - 5 lac

Metro City Married Members: INR 5 - 7 lac

With Dependents: INR 10 lac +

Sum Insured

Young teams: INR 2 - 3 lac

Non- metro
Married Members: INR 3 - 5 lac
City

With Dependents: INR 7 - 10 lac

Guide to Group Health Insurance

09 | Health Insurance | Sum Insured

Will my premium
increase if I choose a
higher SI?

Yes, but not linearly. Here is a rough breakdown of how your

premium may increase as you increase your sum insured.

10 lac

5 lac
Sum Insured

3 lac

1 lac
(INR)

0 100 150 200 250 300 350 400 450 500 550
Premium

*Assuming the premium for an INR 1 lac

SI is INR 142, the premium for an INR 10 ❤️ At Plum, we suggest teams take a higher
lac SI would be INR 513.

SI because it typically results in a slightly

lower premium rate per lakh of coverage,
As you can see, the relationship between the SI and as the risk is spread out.
the premium is not linear. You can increase your SI by
6x, from INR 50K to INR 3 lac, by paying just 2x the
premium.

*Disclaimer: This is an estimate of the real costs.

Actual premium calculations depend on underwriting
risk across various factors, and the figures presented
here are for representative purposes only.

Guide to Group Health Insurance

10 | Health Insurance | Mother & Child

Mother & Child

What does it mean? What do most

companies offer?
‘Mother and child’ refers to healthcare

costs associated with maternity and

In companies with 2-100 employees :
newborn care.

These expenses are typically included as part of a

maternity insurance benefit or a broader health

insurance policy.

35% of companies don’t

offer maternity benefits

Coverage usually includes hospitalisation, pre-

hospitalisation, and post-hospitalisation, diagnostic

tests, ultrasounds, and medications during and after of companies offer

60-90 days of pregnancy.

51% maternity benefits

with a sub-limit

A typical maternity policy includes:

<INR 75k

Childbirth: Bringing a human into the world

isn’t exactly a budget-friendly DIY project.

14%
of companies offer maternity
Childbirth covers hospitalisation costs, including

room charges and general expenses, as well as benefits with a sub-limit > INR 75k
fees for the obstetrician and medical staff. It

includes expenses for both normal and C-section

deliveries

Child’s coverage from day-1: It covers the

medical expenses of the newborn with no delay or

restriction for any medical conditions. However,

many insurers may not cover the child from day 1

without a waiting period

Pre and post-natal expenses: Pre and

post-natal care covers regular checkups,

consultations, diagnostic tests, ultrasounds, and

medications during and after 60-90 days of

pregnancy.

Guide to Group Health Insurance

11 | Health Insurance | Family coverage

How to choose? Going above and

Team demographics: Even if your team is beyond

predominantly youthful and mostly unmarried, we

suggest you take maternity benefits with a lower Comprehensive maternity coverage
sub-limit. No/low utilisation attracts no/low cost
in the following renewals Maternity coverage goes beyond simple hospitalisation
expenses. A robust maternity benefit should
encompass a wide range of medical needs throughout
Family coverage: If your plan includes the pregnancy journey, including cases of stillbirth,
coverage for spouses, this is a must-have benefit. miscarriage, abortion, twin maternity, and more.

However, if you only cover employees and don’t

have female employees, you can opt out of this In India, the need for comprehensive maternity
benefit to reduce your premium costs coverage is critical, given the following statistics

Maternity sub-limit: You can choose a Women’s labor force participation in India stands
maternity sub-limit from INR 50K-1 lac. INR 50k is at approximately 32.8%, highlighting the
the standard sub-limit. Considering the actual importance of workplace protection for expectant
cost of maternity, you should provide a sub-limit of mothers
over INR 1 lac if your team is based in metro cities, India's Maternal Mortality Ratio (MMR) was 97 per
INR 75k for tier 2 cities, and around 50k for tier 3 100,000 live births between 2018-2020,
cities.
underscoring significant maternal health
challenges
Most plans typically cover two dependent
Here are a couple of reasons why you should opt for a children. Therefore, if a couple is expecting twins
higher maternity sublimit:
during a second pregnancy, the third child would
The average cost of childbirth in tier 1 cities and not be covered under most policies
metros in India at private hospitals: INR 40-80 The cost of an abortion can be as high as ₹40,000,
and 67% of abortions in India are unsafe.

The cost of C-sections in private hospitals,

depending on the level of complications: INR
70-200

12% of total claims raised were related to

❤️At Plum, we can help you build
pregnancy and post-natal complications in 2024
maternity plans including IVF &
infertility, complications during
maternity, twins/triplets coverage,
We encourage companies to take a sub-limit of coverage of up to four children and
at least INR 50k to allow comprehensive
coverage during and after the delivery.
well-baby & mother's expenses.
Because parenting is hard enough
without medical billing nightmares.

Guide to Group Health Insurance

12 | Health Insurance | Family coverage

Modern and progressive benefits

How will my premium
Ensure that maternity benefits are inclusive and
accessible to all employees, regardless of gender (e.g., be affected?

for adoptive parents, surrogacy, or male employees

with partners who are pregnant).

Adding maternity benefits can increase your premium

Why? Because 1 out of 15 Indian couples suffer from anywhere from 15% to 30%, depending on the size of
infertility, and IVF treatment costs around INR 1.5 lac your team and the quantum of maternity benefits.

on average.

Sounds scary?

❤
️ At Plum, we can help you build Consider some scarier facts:

maternity plans including egg

freezing under infertility and The average cost of normal delivery is
expenses for a surrogate mother.
INR 1 lac and INR 1.25 lac for
C-sections
India’s neonatal mortality rate is
amongst the highest in the world, and
NICU costs are often over INR 10k/day
in urban private hospitals.
15% of women develop life-
threatening complications during
pregnancy.

​Given maternity's high incidence in

insurance claims, comprehensive
maternity coverage is a must-have and
not a mere bonus.

In fact, GHI offers a significantly inexpensive

alternative to expensive, complex personal plans,
saving employees substantial financial strain.

Guide to Group Health Insurance

13 | Health Insurance | Room rent limits

Room rent limits

What does it mean? How do room rent

The hospital room rent limit refers to the

limits work?
specific amount you are allowed to pay When you choose a hospital room that costs more

than your health insurance’s allowed rent limit, your

for staying in a hospital, should you need
insurer reduces their payment not just for the room
to be hospitalised for a few days.

but for other expenses too. This is due to

proportionate deduction, where the insurer pays bills

You will occupy a bed or choose a room in the hospital, in proportion to the allowed room rent.

and room charges will be levied daily. This optional

amount is usually a specific percentage of the sum Imagine you have health insurance with a room rent

insured.

limit of INR 2,000 per day. You choose a room costing

INR 8,000 per day and stay in the hospital for five days,

For example, if your healthcare plan has a sum insured the total bill comes to INR 2 lac. Let’s say this is the

of INR 2 lac, the room rent limit will typically range split of expenses:

from 1% to 2% of the sum insured (INR 2000 to INR.

4000 per day). This amount can vary between policies.

Type Hospital Expenses

Room Rental INR 40k

Surgeon’s fee INR 1 lac

What do most
General Physician INR 15k

companies offer?
Medical Tests INR 35k

95%

of the organisations do not include

Medicines

Total Bill
INR 10k

INR 2 lac

room rent limits in their plans.

How proportionate deduction works:

Proportion factor = INR 2,000 (allowed) ÷ INR 8,000

(charged) = 25%

The insurer pays only 25% of the charges for services

tied to room costs (like doctor fees, and tests).

Guide to Group Health Insurance

14 | Health Insurance | Room rent limits

For first-time insurance purchases, insurers typically

Expense Split offer three options for room rent capping:

1% of SI/day for normal rooms & 2% of SI/day

Room Rent: Insurer pays ₹10,000 for ICU room
(out of ₹40,000
Surgeon Fee: Insurer pays ₹25,000 2% of SI/day for normal rooms & 4% of SI/day
(out of ₹1,00,000 for ICU room
Medical Tests: Insurer pays ₹8,750 No capping on normal & ICU rooms

(out of ₹35,000
Medicines: Insurer pays ₹10,000 If you have a policy with less than INR 5 lac SI, the first
(fully covered)

two options are unlikely to provide sufficient coverage,

because:

Total Paid by Insurer: ₹53,750

The per-day sub-limit may be lower than the actual
cost of a room, especially in major tier-1 cities, which
Your Out-of-Pocket Cost: represent a significant portion of our clients.
₹2,00,000 - ₹53,750 = ₹1,46,250

In such cases, opting for a policy without room rent

capping would ensure better coverage.
*D isclaimer: This is an estimate of the real costs.
Actual premium calculations depend on underwriting
risk across various factors, and the figures presented
here are approximations for understanding.

How will my premium

Hospitals charge more for deluxe or private rooms,
and the costs for services like doctor fees, tests, and be affected?
treatments increase with room type. If you exceed
your policy's room rent limit, you bear the extra costs T here’s minimal difference in premium whether you
for these services.
choose a policy with or without room rent capping,
and the gap often narrows as you opt for a higher sum
insured (SI).

How to choose?
For example, if you change your room rent limit from
1%-2% of SI per day to no capping, you can expect
your premium to increase by approximately 10%-15%.

When selecting a policy, ideally, choose one T he percentage increase will vary based on whether
without room rent capping for the most flexibility.

you pick a lower or higher sum insured. Choosing

lower room rent sublimits may reduce your premium,
but it can result in higher deductions during claim
If you're working within a constrained budget and payouts. When a team member files a claim, insurers
opting for a policy with a sum insured (SI) of INR 5 lac apply deductions based on these sublimits, which
or higher, a room rent limit of 2% of SI per day for means employees may end up paying more out of
normal rooms and 4% for ICU rooms should provide pocket for each claim.

adequate coverage.

Hence, we do not recommend opting for room-rent

limits.

Guide to Group Health Insurance

15 | Health Insurance | Pre-existing diseases

Pre-existing diseases
What does it mean? How to choose?
PED means any condition, ailment, injury,
illness or related condition(s) for which This is a must-have benefit irrespective of the
plan you choose, especially if you’re covering
the insured had developed signs or children and parents.
symptoms, and/or were diagnosed and/
or received medical advice/ treatment,
According to IRDAI, some of the most common PEDs
within 48 months before the first policy in India include asthma, diabetes, high blood
with the company.

pressure, thyroid, sleep apnea, lupus, cancer, and

atherosclerosis.

Think of it like your body's own personal highlight reel

of medical occurrences - everything you've been For most of these diseases, there is no one-size-fits-all
diagnosed with, treated for, or secretly worried about.

and require ongoing support and investment in

primary and preventive health.

You can opt to cover these diseases from day 1 or

apply for a waiting period. The waiting period for pre-
existing health conditions is the number of days you ❤️At Plum, pre-existing diseases are
have to go through before making a successful claim covered from day 1 to help companies
on any PEDs.

support their employees better.

What do most
companies offer?

98%

of companies
include PEDs from
day 1.

Guide to Group Health Insurance

16 | Health Insurance | Pre-existing diseases

How will my premium

be affected?
Covering pre-existing diseases can make premiums go For employees, postponing necessary
higher because it’s a bigger risk for the insurer. If the treatment can worsen their condition,
policy covers these conditions right away, the insurer
may charge more to balance the chance of early leading to higher future medical costs
claims.

and more severe health outcomes

However, adding a waiting period shoots For employers, these delays
up out-of-pocket spending, which might contribute to increased absenteeism,
also lead to employees avoiding the reduced productivity, and long-term
treatment to let go of the expenditure.

health complications that could push

up insurance premiums. Additionally,
the well-being and morale of
employees are affected, leading to a
higher turnover rate as employees feel
unsupported.

While not covering PEDs might seem like a way to save costs, it ultimately results in
far greater financial and operational burdens for both employees and employers.

Guide to Group Health Insurance

17 | Health and Wellness

Health and
Wellness

Doctor consultations
Out-patient benefits
Mental health benefits
Wellbeing

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18 | Health and Wellness | Every rupee spent on wellness saves INR 132.33.

Every rupee spent on

wellness saves INR 132.33.
Your employees come with varied needs In fact, the economics are surprisingly simple.

and a complex world of personal According to Assocham, for every rupee

challenges, health concerns, and spent on employee wellness, employers

aspirations.

get a saving of INR 132.33 as savings on

absenteeism costs, and INR 6.62 back as

Not every employee will need hospitalisation. In fact,
reduced healthcare costs.

only 8-10% of employees ever claim insurance. But

every single one of them yearns for something deeper

— the ability to care for themselves and their families

The logic is even more practical – the
without financial strain or emotional burden.

more you invest in wellness, the less

you'll need to spend on reactive

While traditional health insurance acts
insurance.

like a fire extinguisher, what really is

needed is a way to prevent said fire.

Prevention is dramatically cheaper than intervention Cost is a game-changer for employees.

because health issues compound.

And no, it's not about whether they can afford

healthcare. It's about making it so ridiculously easy

that taking care of themselves becomes a no-brainer.

A small, unaddressed mental health

concern can grow into a months-long

burnout. A minor, undetected physical

❤️At Plum, we’ve witnessed a 4x surge in
health issue can become a major medical
companies offering OPD benefits. In
challenge.

addition, close to 18% of companies offer

employer-sponsored primary healthcare

Investment in primary and preventive care is and 10% offer mental health benefits.

essentially an insurance policy against massive future

claims costs.

Cherry on top: A portion of the amount you

spend on telehealth, health checkups, etc.,

will be covered by Plum in the form of

complimentary health and wellness benefits,
such as dental consultations, vision checks,
discounted pharmacy services, and more.

Guide to Group Health Insurance

19 | Health and Wellness | What comes under health and wellness?

What comes under

health and wellness?
Anything needed to stay healthy falls It’s important to have OPD benefits covered because:

under primary and preventive care aka

They cut down out-of-pocket spending, so
health and wellness.

employees don’t skip routine check-ups. Annual

health checks in India can cost anywhere from INR
A health and well-being plan best suited for your team 1,700-9,00
will ultimately help you save money because the more
They make managing chronic conditions easier,
you focus on primary and preventive care, the less
stopping small issues from turning into bigger
you'll have to spend on reactive care.

problems

Quick access to care means faster recovery, lower

Out-patient costs, and less risk of spreading illnesses at work.

benefits Most organisations offer a wallet

anywhere between INR 3-20k, depending
Outpatient Department benefits (OPD) provide
upon their budget.

medical expense coverage for ailments that don’t

require hospitalisation like doctor consultations,

diagnostic tests, pharmacy bills, and minor

❤️At Plum, unlike insurer partners,
procedures.

employers need not pay in one go and

Unlike traditional health insurance, OPD benefits the unutilised amount doesn't go to

address day-to-day healthcare needs. It is one of the waste. Companies have helped their

most sought-after benefits, however, typically not employees save more than 8cr in

included in standard health insurance. If included, you healthcare costs by investing in OPD
pay an upfront cost as part of the premium while
benefits.

deciding the limit to which the insured can spend.

The alternative is to buy OPD benefits from a

healthcare partner. In this case, as well, you have a

wallet limit, but this is a more flexible way of choosing

OPD benefits. You decide which categories can be

included in your wallet. The categories can range from

doctor consultations, therapy, and wellness sessions

to food coupons and home work-setup.

Guide to Group Health Insurance

20 | Health and Wellness | What comes under health and wellness?

Doctor Mental health

consultations benefits
This is an extension to OPD benefits. Many healthcare This includes access to therapy and emergency

partners offer doctor consultations or telehealth assistance programs, including on-demand wellness

benefits, which include access to free consultations webinars and extensive assessment tools.

with specialists. The good thing about this is that it

can be accessed by anybody.

We recommend employers focus on mental health

benefits because:

We recommend organisations not miss out on

telehealth services or doctor consultation benefits According to a FICCI-BCG report, around 58% of
because Indians feel burnt out, significantly higher than the
global average, making it an employer’s moral duty
These benefits help organisations craft more to care for their teams and families
Therapy is expensive, with sessions costing
comprehensive care plans by focusing on the

between INR 2,000 and 4,000 each. We found that

services that teams actually use. Adoption data

mental health consultations account for up to one-

also helps you plan for the future.

Since these benefits can be availed by anyone, fifth of telehealth calls on the Plum App
about 40% of consultations are scheduled for

family members, such as parents, siblings, Finding a therapist in India is challenging, with only
grandparents, or others 1–2 psychologists available per 100,000 people.
Unfortunately, finding the right fit is even harder.
Employees are more likely to attend pre- and post- Having access to multiple specialists enables
health crisis care since the consultation fees are employees and their families to choose the most
already covered suitable option
Speaking to a doctor during sickness becomes a

no-brainer when it can be done conveniently from

the comfort of home or any corner of the world.

x
❤️Plum provides 24 7 access to
licensed mental health professionals.

❤️Plum works only with top doctors,

covering 23+ specialists and 10+ Indian

languages. This year, more than 14k unique

users availed benefits via Plum Telehealth.

More than 10 consults get scheduled every

hour, and about 75,000 people have

benefited from telehealth in the last year.

Guide to Group Health Insurance

21 | Health and Wellness | What comes under health and wellness?

Wellbeing How to choose?

Well-being goes beyond just health,
Many times employers wonder which of the above-
it includes lifestyle.

mentioned health and wellness benefits would be

most appropriate. However, they often overlook the
Supporting employees in their daily lives can help fact that these benefits work together as a
them manage recurring expenses more effectively. comprehensive solution. It’s like completing an
While this might seem like an expense, it’s actually a antibiotic course: taking a pill only when you have a
way to put money back into your team’s pockets.

fever and not finishing the course won't be effective.

Similarly, all these benefits complement each other to
For example, employees often spend between INR form a comprehensive healthcare policy.
1,500 and 10,000 on gym subscriptions each month.
Even a small discount can encourage them to maintain
these habits and build a healthier lifestyle.
The truth is that the value of benefits lies
Wellness as a benefit shouldn’t be skipped because:

in the eyes of the beholder. Hence, health

These benefits are more sticky than health
and wellness benefits must be tailored to
insurance. While insurance is used out of need, your team's specific needs to avoid
wellness perks like gyms, pet care, and nutrition overspending while ensuring
consultations are used out of habit comprehensive coverage.

It’s a great way to show and prove that you value In this case, the best thing to do is ask. We suggest
and prioritise your team by investing in benefits running an internal survey to assess the consensus
that often take a backseat. These are the things among your team members.

your employees spend the most on

It acts as a great source of employer branding Here’s our hack for quick and efficient decision-
because it’s easier to talk about these day-to-day making. If you don’t have the time or bandwidth for a
perks offered by an organisation than a survey, asking the following quick questions to your
comprehensive health insurance plan, which may employees should be enough for you to plan your
only be used occasionally, if at all.

next steps.

How to pick? You define what wellness means for your Where are they spending
company. The range of benefits can include access to
gym memberships, Zumba classes, pet care, diet How much are they spending
consultations, and more, tailored to what your team
values most.

How often are they spending?

❤️Plum Perks offers significant discounts

on over 25 leading wellness brands across
the country, allowing employees to save
20-30%, depending on the discount.

Guide to Group Health Insurance

22 | Health and Wellness | Benefits flop when the experience doesn’t click.

Benefits flop when the

experience doesn’t click.

Now that we have benefits in place, let’s We recommend checking the following before picking
a healthcare partner for OPD benefits, mental health
focus on another important thing that consultations or wellness perks:

can’t be overlooked - experience.

How user-friendly is their app?

Employees don't want to juggle five different Can your grandma navigate it, or does
healthcare apps like they're playing a complicated
video game. They want everything in one place – it feel like solving a Rubik's cube
simple, clean, straightforward. Our research shows
people love having all their healthcare needs bundled Check out their specialists. We're
up neatly, which is also why Plum introduced retail
health policies.

talking credentials, experience, the

whole nine yards

Multiple vendors?
Can they handle your team's
That's a recipe for chaos.

healthcare needs? Look at

consultation volumes, response times,
The result?
and specialist availability
Confusion, low benefit awareness, and
minimal adoption. So much so that due to Privacy matters. Understand exactly
the lack of a single source of truth, 40% how confidential information is
of employers have insufficient data to handled and when (if ever) HR might
make informed decisions.
get involved.

Guide to Group Health Insurance

23 | Costs

Costs
Rising costs - an ongoing concern
3 things that will impact your premiu
Common cost mitigation strategie
How to build sustainable policies
What would a 1% shift in the
compensation budget do

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24 | Costs | Rising costs, an ongoing concern

Rising costs, an
ongoing concern
Now that we have realised the importance of investing While budgets can be tight, investing in the health and

in offering great benefits, let’s address the elephant in wellbeing of your employees is crucial.


the room - costs.

The cost of not providing comprehensive benefits

often far outweighs the money spent on supporting

Rising healthcare costs are an ongoing
your team. Therefore, the smart approach is to strike a
concern. Moreover, never has the focus
balance between your budget and the benefits
on efficiency and profitability been provided.

higher.

This is why we’ve also seen a

110%

This means the primary concern for most

decision makers this year is the cost and

pricing of their employee benefits plan.

increase

in first-time buyers of group health

insurance investing in primary healthcare

Did you know that

40%

initiatives for their employees

of HR teams are sweating over their

In the following chapters, we’ll walk you through:

benefits budgets right now

3 things that will raise your premium, some common

We get it. Money is tight, spreadsheets are scary, and cost mitigation strategies, and actionable steps to

every rupee counts.

build sustainable plans.

Guide to Group Health Insurance

25 | Costs | Three things that will impact your premium

Three things that will

impact your premium

Age demographics Incurred claims ratio

Age demographics affect how insurers assess risk The Incurred Claims Ratio (ICR) shows the

because a person’s age plays a big role in their relationship between the claims an insurer has to

healthcare needs and usage.

cover (both paid and pending) and the premiums it

earns in a financial year. 

Older employees typically require more medical care

due to age-related conditions such as chronic illnesses

Incurred Claims Ratio =

or the need for specialist care. This increases the

(Value of Claims Paid / Value of
frequency and cost of claims, driving up premiums.

Premiums Received) x 100

Younger employees often use fewer insurance

benefits, primarily wellness programs or preventive

care. This results in fewer claims, making premiums A high ICR (close to 90%) can mean the insurer is
more affordable for a workforce dominated by paying claims well, but if it goes over 100%, the insurer

younger employees.

is paying out more than it earns, which is not

sustainable. A very low ICR (below 50%) may suggest

the insurer rejects too many claims or charges very

high premiums. 

Dependents coverage
A good balance is usually between 70-90%, but this
can vary depending on the type of insurance. For
Dependents’ coverage increases the number of group health insurance, the range might differ slightly.

covered individuals and the complexity of care

provided under the plan.

If the ICR is too high, insurers may increase premiums

to avoid losses. How much they increase premiums
More dependents mean higher utilisation of healthcare depends on things like company policies,
services, leading to increased claims and higher competition, and regulations.

premiums. Moreover, dependents often have varied

requirements, such as maternity care for spouses or
pediatric care for children, which can be cost-
intensive.

Guide to Group Health Insurance

26 | Costs | Common cost mitigation strategies

Common cost
mitigation strategies
The three most common cost-mitigation strategies

include:

Introducing copays and deductibles Reducing the total sum insured

Trend we observe: 54% of HRs are likely to explore

Trend we observe: In extreme cases, 30% of HRs
introducing copays and limits
are likely to explore reducing the sum insured to

balance budgets
Impact on cost: Lo

Impact on cost: Mediu

Impact on employee morale and health: Low.

Copays are democratic, and risk is divided equally

Impact on employee morale and health: High. 

across all groups. Also results in smaller claims
A very small percentage of employees will raise
because employees make responsible decisions.
claims for expensive treatments, but they ’re the

ones who would need it the most.

What’s recommended: Introduce a parental copay

first. If costs are still high, introduce a 5% copay.

What’s recommended: Not recommended if you

offer a sum insured in the INR 3-5 lac range. 


Introduce capping for parents, in case of higher

sum insured.
Changing policy from ESCP plan to

ESC plan

Trend we observe: Increased demand in ESC and

voluntary parental plans over ESCP plans

That said, one of the most

Impact on cost: Hig effective cost-mitigation strategies

Impact on employee morale and health: High. 
 is to design sustainable plans that
~60% claims are raised for parents in companies minimise the need for frequent
offering ESCP policies. Removing parents would
changes.
result in considerable out of pocket spends.

What’s recommended: Introduce cost sharing

through voluntary parental covers. This would be

less expensive and more comprehensive than a

retail policy.

Guide to Group Health Insurance

27 | Costs | How to build sustainable pl ans, not reactive ones

How to build
sustainable plans, not
reactive ones

76% of employees believe the quality of

their benefits impacts their decision to
The 3P Philosophy to
stay at a company.

Benefits Planning

While economist Thomas Sowell was not thinking

Our Head of Finance, Mukul Kanchan, is obsessed with about employee benefits when he said “there are no
hidden costs, so he did some research into how much solutions, only tradeoffs”, it’s relevant all the same.

attrition could cost you.

Remember that the best bargains leave all parties

slightly unhappy. While budgetary constraints might

The cost of attrition is

prevent you from building the perfect policy, you can

build a policy that your team can appreciate. When in

doubt, refer to the 3Ps of Benefit Planning, proposed

12.5%
by Aditya Bagarka, Vice President of Insurance

Partnerships at Plum.

of total CTC
Prioritise: Identify benefits that are being

underutilised. Design your plan based on constant

influenced by analysis of different claims spent and cost

drivers.Explore new solutions that could result in

positive returns on investment

Prevent: Invest in preventive and primary health

Recruitmen care measures that promote early intervention and

Learning curve, lost productivit reduce risks of expensive lifestyle diseases

(cancer, diabetes, hypertension)

Hours lost interviewing candidate

Personalise: Craft flexible plans that result in

Loss of institutional knowledg increased adoption and utilisation for the same

Cultural impact cost per employee. Explore cost-sharing initiatives

with employees like voluntary top-ups or copays.

Guide to Group Health Insurance

28 | Costs | What could a 1% shift in the compensation budget do?

What could a 1% shift

in your compensation
budget do?
We present to you a radical though experiment: Assume your total budget for compensation and benefits is
₹7.7cr. Most companies define their benefits budget to be 1-2% of the total compensation budget. In the
following table, we explore how changing the split by a percentage point would influence salaries and benefits.

Plan A Plan B

Small reallocation 7cr on salaries and incentives +

6.7cr on salaries and incentives +

in budgets 7L on employee benefits

10L on employee benefits

Minor tradeoff
12% hike in salaries
11% hike in salaries
in salaries

₹7L - ₹10L sum insure

₹3L sum insured parents not covere Parents covere
Bare minimum maternity cove Progressive maternity benefit
Exponentially No additional health benefit Primary and preventive healthcar
better benefits No accident or term life cove Generous accident and term life cove
No coverage for modern treatmen Coverage for modern and progressive
Minimal perks treatment
Great perks

What plan do you

70%
of employees would choose a job
offer that offers better health

think your employees benefits and slightly lower pay

over a job offering poor health
benefits and slightly better pay.
will appreciate more?
In an increasingly cost-conscious environment,
companies need to focus on building sustainable
benefit plans.

Guide to Group Health Insurance

29 | Conclusion

Conclusion
Conclusio
FAQ
About Plum

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30 | Conclusion

Conclusion
Thank you for going through the Guide to GHI. We Hold your health benefits partner to
hope it has made the world of insurance feel a little
the highest possible standards.
This is the health of your employees,
less complex. Before you go, here’s some food for

thought.

and it must be handled with the

Most companies follow the ‘land and expand’
utmost sincerity and sensitivity. A
approach to employee benefits, starting with the

basics and building over time based on feedback.

reliable partner should provide

transparency, clear communication,
However, based on our experience consulting with
and exceptional service, especially
10,000+ organisations at Plum, we’ve found that

when it comes to exceptional benefits, team size

when it comes to claims processing,
doesn’t matter—the top 10% of companies offer the customer support, and handling
same benefits, regardless of size.
sensitive health information.

Invest in the primary and preventive

Here are a couple of things we recommend you keep health of your team.
in mind while investing in healthcare benefits plans for
Employee health should be viewed
holistically, not just as a line item in an
your teams:

insurance policy. By investing in

Ask, don’t assume.
primary and preventive care, you can
Speak to your employees and
help employees stay healthy, catch
understand their expectations to
potential health issues early, and avoid
better gauge their requirements
more costly treatments down the road.

based on their healthcare journeys.

One-size-fits-all solutions rarely work

when it comes to employee benefits. If you liked it, share it with your community and play

your part in helping companies craft more holistic

Engage directly with employees to
policies

address any gaps in coverage and

provide a more tailored experience.

Looking to build a comprehensive health

stack for your team? Reach out to us at

[email protected].

Guide to Group Health Insurance

31 | conclusion | Rising costs, an ongoing concern

FAQs
Can I choose who will be covered under the plan?
Some team members are still in their probation
period. How can I add only those who have
Yes, fortunately, GHI offers many customisations to completed it?

help you build a plan that best suits your team.

However, any decisions you make will apply across the All employees deserve to be taken care of as soon as
entire organization. For example, if you choose an ESC they become part of the system. Secondly, all full-time
plan, you will be required to cover all your employees' employees are eligible to be added to the GHI plan, so
spouses and children under the plan. it depends on how you view your employees on
probation.

I am the co-founder of the organisation and

would like to include only my and my cofounder’s Can the policy be graded based on seniority
parents in the policy. Is that possible?
levels?

No, GHI plans don’t allow customisations like that, and Yes, but only the sum insured can be graded. You
a change for one means a change for all included in the cannot have different room rent or maternity sub-
plan. limits for different sets of employees. If your
organisation grows larger, you can opt for flexible
benefits as well.

Will day-to-day consultations and medicine

expenses be covered under health insurance?

You can opt into OPD benefits to avail of these Our team has only two women. Is it okay if we
services.

exclude maternity benefits?

No, because what if you hire more women in the

future? Secondly, it depends on your team’s average
Will I have to shell out money despite taking age. If they are planning to get married soon or are
health insurance?

already married, we encourage you to add maternity

benefits, even if that means at a lower sub-limit.
Yes and no. It totally depends on the benefits included
in your plan. For example, if you have no room rent
limit, pre-existing conditions covered, and OPD
included, the chances of high out-of-pocket expenses
are lower.
Does Plum provide only group health insurance?

No, consider us your full-stack employee health and

wellness partner, covering all aspects of primary,
What is the minimum team size required for you preventive, and emergency healthcare.
to help us set up an employee benefits plan?

You need to have at least seven people in your team to

set up a GHI plan.

Guide to Group Health Insurance

32 | conclusion | About plum

About

Plum is creating the new standard of insurance & Notable accolades

health benefits. The company, backed by Sequoia and

Tiger Global, has helped over 4,000 organisations like

Atlassian, Twilio, and Zomato take care of their team’s

4x
health.

Insurtech of the year 22-24

Your full stack employee health partner
By Indian Insurtech Association

and Global Fintech Fest

Insurance

Health Insurance

Personal accident and disability insuranc

Term life insurance

1 Claim processed every 2 mins
Super top up

with over 64000 claims processed in 2023, by a 100+

Preventive healthcare support team.

OPD coverage

Telehealth

Annual health checkups

79 claims NPS score
Discounted medicines and diagnostic

Dental and vision benefits

,
The highest in the country much ahead of traditional

and new age brokers .

Health and wellness offerings

Monthly wellness sessions

Gym memberships 100% Digital endorsements

Mental health
Built with comprehensive API Integrations with
Tier-1 insurers.
Wellness marketplace featuring 50+ brands

ranging from fitness to petcare

’
Whether you re starting out or scaling fast , Plum delivers
comprehensive , high-end employee benefits tailored to suit your team’s
needs - backed by world-class coverage that grows with you.

Reach out to us at [email protected]