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By Abhishek Poddar
Ease of Doing Business for MSMEs: With about 3.31 lakh businesses, the Indian small industries form the backbone of the country’s economic system. These industries tend to be labour-intensive, so they produce a lot of jobs. Despite the large number of people employed in this sector, typically it does not offer health insurance or benefits to the workforce, nor any sort of financial assistance in the event of a medical emergency. The Covid 19 pandemic brought to light the need for group health insurance across industries, no matter how small. One must note that 40 crore Indians, or about 30 per cent of our population, still do not have access to any type of health insurance. Expecting employees to rely solely on their resources to cover rising healthcare costs would only lead to increased stress and, ultimately, lower productivity. Hence, it is crucial to highlight the main causes of the low uptake of health insurance in this segment and find solutions for them.
Access and Affordability Conundrum
The low availability of group health insurance is largely due to a lack of financial literacy in this sector. Maintaining production and wafer-thin margins, and lowering overall costs are the small industries’ primary concerns. Due to this, they neglect to insure their employees. Another issue that needs to be addressed is the lack of knowledge about the advantages of health insurance (and insurance in general), as well as health insurance products. The third issue is the high cost of health insurance, which prevents small businesses from purchasing it. The lack of appropriate health insurance options for small teams is another issue this industry is currently dealing with. Additionally, because offering health insurance is not mandatory by law, most small businesses tend to forego it.
Small businesses must comprehend how crucial health insurance is to their staff. When employees feel more secure about their own and their families’ well-being, it improves productivity, fosters loyalty, lowers attrition rates, and supports long-term business growth. As a result, they should opt for group health insurance because it offers the following advantages:
Build a culture of loyalty and trust — A business is only as good as the team it can assemble, so it is critical to find and keep valuable employees who will stick with the company. Although pay is a significant factor, the team’s success depends on several other factors like getting an insurance cover and other benefits. In today’s cutthroat market, workplace culture and employee benefits are crucial.
Shield employees from unforeseen costs — Employee health insurance serves as a safety net in the event of a planned or unforeseen hospitalisation. Offering group health insurance, also referred to as a group mediclaim policy, as an employer encourages workers to give their best efforts. It fosters an atmosphere that motivates employees and shields them from unanticipated medical emergencies.
Lower premiums — Since group health insurance is purchased in bulk, it is less expensive than purchasing individual insurance. For a business, this is more convenient and economical. Tax Benefits:
As per the Income Tax Laws, group health insurance is fully deductible from taxes. As a result, a company can fully deduct the cost of providing healthcare to its employees from the taxes because the full premium cost is recorded as a business expense.
Ease of use — An employer has the freedom to choose the frequency of premium payments based on the company’s policy. According to the employer’s convenience, this can change from monthly to quarterly to yearly. Further, today companies can even avail group health insurance with just two employees.
Insurtechs’ Role
Insurance technology or insurtech companies use technology to close the gap between MSMEs and the health insurance market, maximising benefits for employees. Today, every company must look for an insurance brand that integrates technology, offers employees ease of access, quick turnaround for the release of funds in case of emergencies, and has a mechanism to assist 24X7.
Insurtech businesses now use WhatsApp and digital cards to deliver quick service. They are eager to offer comprehensive healthcare coverage in addition to health insurance and even have a dedicated portal for all of their services. Such insurtechs want to encourage healthy living and increase access to health insurance for as many people who aren’t currently covered as possible.
Also read: How National Small Industry Day differs from MSME Day
The most effective way for a business to safeguard its employees is through comprehensive group health insurance. In light of the ongoing pandemic, SME workers must have all the resources necessary in the event of a medical emergency. Small industries in India must step up and leverage the numerous benefits of Insurtechs to participate in safeguarding not only the health of their employees but their families too.
Abhishek Poddar is the Co-founder & CEO of Plum. Views expressed are the author’s own.
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