When you're looking for the right health insurance plan for your team, you might come across terms like small group and large group health insurance. While both serve the same purpose of offering coverage to a group of people, the way they’re structured, priced and regulated can be quite different. Understanding these distinctions is important, especially if you're running a business or managing employee benefits.

If you're exploring small business health insurance options, this guide will help you make an informed choice.

What is small group health insurance?

If you are a business owner with a handful of employees, you are likely eligible for small group health insurance. This type of policy is typically available to companies with 1 to 50 full-time employees. In some states or policies, the upper limit might go up to 100 workers.

Here’s what you should know:

• Small group plans are often standardised and regulated to ensure fairness across businesses.
• Premiums may vary based on the age, location and health status of your employees.
• You may qualify for government incentives or tax benefits for offering health coverage.
• These plans usually offer comprehensive coverage, including preventive services, emergency care and maternity benefits.

Offering group health insurance to your small team can boost morale and make your business more attractive to potential hires.

What is large group health insurance?

As the name suggests, large group health insurance is meant for businesses with a larger workforce typically more than 50 full-time employees. These plans are usually customisable and negotiated directly with insurers, giving companies more flexibility.

Key points to note:

• Premiums are often lower per employee due to economies of scale.
• There’s more room for customisation in terms of benefits and coverage.
• Large employers may self-fund their health plans and take on more administrative responsibility.
• It often covers dependents and offers wellness benefits to encourage healthy lifestyles.

A well-structured group health insurance policy for large groups helps improve employee retention and supports overall productivity.

Key differences between small & large group health insurance

Though both types offer similar core benefits, they differ in how they are priced, managed and regulated. Here are the major differences:

Benefits of small and large group health insurance

Both types of health insurance come with significant benefits. Here’s a quick comparison:

Small group health insurance benefits

• Affordability: May qualify for government subsidies or tax deductions.
• Accessibility: Helps attract talent even with limited resources.
• Simplicity: Easier to administer and manage.

Large group health insurance benefits

• Lower premiums: Larger risk pools usually mean reduced costs per employee.
• Flexible plans: More options for customising benefits.
• Extended coverage: Can include dental, vision, wellness programmes and dependents.

Whether you’re opting for small business health insurance or managing a bigger team, providing coverage improves employee loyalty and overall satisfaction.

Conclusion

Choosing between small and large group health insurance depends largely on the size and needs of your organisation. Smaller businesses benefit from simplicity and accessibility, while larger businesses gain flexibility and cost advantages.

Whichever option you go for, offering a group health insurance policy is a smart step towards ensuring employee well-being and business sustainability. It reflects your company’s commitment to its people and that’s always a good investment.

FAQ

1. Is group health insurance mandatory for employers in India?

 Yes, as per the IRDAI guidelines, it is mandatory for employers to offer group health insurance to their employees.

2. Can a business with just two employees apply for small group health insurance?

Absolutely. Most insurers allow businesses with even two employees to opt for a small group health insurance plan.

3. What’s the difference between individual and group health insurance?

Group health insurance or GHI covers a defined group of people, usually employees, while individual plans are purchased by individuals directly. Group plans are often more cost-effective.

4. What is a group health insurance policy?

A group health insurance policy is a plan that covers multiple individuals under one contract, typically offered by employers. It usually includes hospitalisation, maternity and other health-related benefits.

5. Can I cover family members under my employer’s large group plan?

Yes, many large group health insurance plans include options to cover family members such as spouses and children.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.