Health Insurance provision in CTC

Hi we spent around 16 lakhs for 55 employees for Health Insurance. That’s roughly Rs. 29,090 per employee. It could be just Rs.8,000 for one employee if he had given only his name for a 3 lakh cover or it could be more than Rs.40,000 for someone who had opted for himself, spouse, 2 children and elderly parents. Is it alright to put Rs. 29090 as Health Insurance provision in the CTC in their salary hike letters?


Hey @Aug23 ,

When including Health Insurance provision in the CTC (Cost to Company) calculation for salary hike letters, it’s important to ensure transparency and accuracy. Here’s how you can approach this situation:

  1. Transparent Communication: Transparency is key when communicating with employees about their compensation package. Clearly mention in the salary hike letter that a portion of the CTC includes the Health Insurance provision.
  2. Breakdown Explanation: Provide a breakdown of the Health Insurance provision in the CTC. Explain that the actual premium varies based on the individual’s coverage preferences. Mention that the provided figure of Rs. 29,090 is an average cost for all employees.
  3. Coverage Details: Specify the various coverage options available and their corresponding costs. For example, mention that an employee could have opted for individual coverage, coverage for themselves and their spouse, family coverage, etc.
  4. Individual Choices: Highlight that employees’ actual contribution might differ based on their coverage choices. Some may have opted for minimal coverage, while others may have chosen comprehensive coverage.
  5. Flexibility: Emphasize that the Health Insurance provision is designed to accommodate the diverse needs of employees. Different individuals have different family situations and health requirements, leading to varying levels of coverage.
  6. Compliance: Ensure that your CTC calculation adheres to legal requirements and regulations related to Health Insurance and other benefits in your region.