Group health insurance premiums have grown at a CAGR of 25% over the last five years, according to a report by digital healthcare platform Plum.The report is based on insights from over 4,500 group health plans and surveys with employers and human resource consultants.
“India’s benefits budget is typically 2% of the total cost to a company budget, lower than the likes of US (7%), Europe (10-25%), and APAC countries (8-15%),” said Abhishek Poddar, chief executive of Plum Insurance. For companies with a wide healthcare benefit plan, the 2% budget is the norm, while the average spend is less than 1%.
According to the report, global startups have a higher median sum insured at Rs 10 lakh. Unicorns are also providing wider health benefits including outpatient treatment and coverage that is inclusive of LGBTQ+. “We advise companies to take a 10-year view, gradually increase the benefits, and plan for doubling the sum insured from Rs 5 lakh to 10 lakh over the period,” said Poddar. He added that the cost of health benefits, even after a decade, will not reach Western levels because the costs in India are much lower in comparison.
“With employer health insurance costs expected to grow by 11% in India in 2024, companies are experimenting with cost-sharing,” he said.