Quick answer: Group medical cover (GMC) is a single health insurance policy you buy for your employees, usually with a spouse and children added, to pay hospital bills up to a fixed sum insured. In India it is not mandatory. The only statutory medical scheme is ESI, which covers employees earning up to ₹21,000 a month.
- ESI contributions are 3.25% from you and 0.75% from the employee, on wages up to ₹21,000 a month.
- No central law requires group health insurance for employees above that ceiling.
- Your premium on an approved health scheme is not a taxable perquisite for the employee under section 17(2)(c) of the Income-tax Act, 2025.
- The employer is the policyholder. Each employee is a covered member, not a separate buyer.
How does group health insurance work in India?
You pick a sum insured, a family definition and an insurer, then pay one annual premium for the whole team.
Members get an e-card. Treatment at a network hospital is usually cashless, settled through a third-party administrator, and anything outside the network is reimbursed after a claim. The gmc meaning most HR teams use is simple: hospitalisation cover the employee doesn’t pay for.
GMC is mainly for in-patient care. Outpatient visits, dental work and wellness programmes need riders or a separate plan. Our guide to health insurance for employees in India walks through policy design.
Is GMC compulsory if your team is covered by ESI?
No, and buying GMC does not let you skip ESI either.
| Point | ESI | Group medical cover |
|---|---|---|
| Legal basis | Code on Social Security | Your contract with an insurer |
| Who must be covered | Wages up to ₹21,000 a month (₹25,000 for persons with disability) | Whoever your policy names |
| Cost | 4% of wages in total | Premium you negotiate |
| Can you opt out? | No | Yes |
The ESIC contribution page sets out the rates. Since the Labour Codes, ESI coverage reaches every district, so “we’re outside a notified area” no longer works.
Here’s the common mistake. A foreign employer buys GMC for everyone and assumes ESI is covered. It isn’t. A junior hire on ₹19,000 needs both the ESI deduction and, if you promise it, the GMC card. Our statutory vs non-statutory benefits page shows where the line falls.
What do employees in India expect from GMC?
Family cover, mostly. Indian candidates often ask about parents, maternity cover and room-rent limits before they ask about the sum insured.
We won’t quote survey benchmarks here. Market norms move every renewal and vary by city and seniority. Our article on medical insurance expectations for foreign employers covers what candidates raise in interviews.
Most employers pair GMC with group term life insurance and group personal accident insurance. Together they form the standard Indian insurance bundle.
How does Remunance arrange group medical cover?
Remunance is the legal employer, so the group policy sits with us and your team joins it from day one of employment. Insurance premiums are passed through at cost on top of our flat fee from USD 99 per employee per month, with no markup. We also enrol each new joiner and manage additions and exits. To see the numbers for your headcount, request a benefits quote for your India team.
What else do people ask about group health insurance in India?
Is group medical cover taxable for employees in India?
No, if the policy is an approved health insurance scheme. Section 17(2)(c) of the Income-tax Act, 2025 keeps the employer’s premium out of the perquisite list.
Can an employer deduct GMC premium from salary?
Only if the offer letter says so. Many employers share the cost of adding parents, while the employee’s own cover stays free.
Does group medical cover continue after an employee leaves?
Usually not. Cover ends with employment, though some insurers let the leaver port to an individual policy.