Can Startups Buy Group Health Insurance For Fewer Than 7 Employees In India?

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For major startups in India, providing employee benefits like health insurance can be quite challenging. This is very true when the team size is small. One of the most common questions that founders ask is whether they can buy group health insurance if they have fewer than 7 employees.


The answer is yes. However, there are some conditions that depend on the insurer as well. Keep reading till the end to know more about health insurance policies for groups in India.


Minimum Employee Requirement in India


A majority of insurers in India need a minimum group of 7 to 10 employees to issue a group health insurance policy. But, with the rise of startups and SMEs (Small and Medium-sized Enterprises), there are several insurers who have relaxed the norms to some extent.


Some insurers today offer group health insurance for small groups of 2 to 5 employees. This is mostly in the case of registered startups or companies with good documentation. However, the eligibility can vary depending on underwriting policies and risk assessments.


Can Startups Get Covered With Smaller Teams?


Even with a small team, startups can use various ways to secure group coverage easily:



  • Startup-based Group Plans:There are certain insurers who design policies for small teams.

  • Aggregator Platforms:Platforms help startups access insurers willing to cover smaller groups.

  • Flexible Underwriting:Insurers may approve smaller groups based on the business profile and the risks involved.


In many cases, having a proper company registration, such as Pvt Ltd or LLP, helps improve approval chances.


What are the Benefits of Group Health Insurance for Small Teams?


Let us take a brief look at some of the benefits of group health insurance, even with very few employees:



  • Low premiums in comparison to individual plans.

  • Complete coverage for all pre-existing diseases right from day one.

  • No more waiting period.

  • Better employee retention and satisfaction.


For startups competing for talent, offering health insurance, even to a small team, can be a big differentiator.


What are the Common Challenges Faced by Businesses with Smaller Teams?


It is absolutely possible to get coverage, but startups with fewer than 7 employees may face certain challenges, like the following:



  • Higher premiums per employee due to a smaller risk pool.

  • Limited insurer options in comparison to larger groups.

  • Strict underwriting needs.

  • Requirement for a co-pay or restrictions.


Even after all these limitations, the overall coverage value outweighs the constraints. This is especially true for growing startups.


Indian startups can get health insurance for fewer than 7 employees. There might be certain limitations, but the benefits of early coverage are available for both talent retention and financial protection. This makes it a worthwhile investment for smaller teams.