Is Medical Insurance Mandatory for Employees in India?

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A common question among employers and employees is, Is medical insurance mandatory for employees in India? The answer is yes. As per the Employee State Insurance (ESI) Act, 1948, and the guidelines under the IRDAI and Labour Laws, providing medical insurance to employees is a legal requirement for certain businesses.

Legal Requirements for Employee Medical Insurance​

1. Employee State Insurance (ESI) Scheme – Companies with 10 or more employees (20 in some states) and a salary limit of ₹21,000 per month must provide ESI coverage.
2. Group Health Insurance – As per the MHA guidelines post-COVID-19, businesses must offer medical insurance to employees, especially in the organized sector.
3. Compliance & Employee Welfare – Providing medical insurance ensures legal compliance while offering financial security to employees in case of medical emergencies.

So, if you are an employer wondering, Is medical insurance mandatory for employees in India?, the answer is clear—yes, and it is essential for both compliance and employee well-being.