Is employee health insurance now compulsory to all companies?

is employee health insurance now compulsory to all companies?
Ref. National Directives of MHA, GOI dated 15th April 2020, vide Order No. 40-3/2020- DM-I (A).
if yes, can we consider it as a part of CTC? (By deducting from employee salary)


Hi Naresh,

Yes, now it is a directive by MHA to all employers to have health insurance for its employees.

As per the existing laws in India, only ESI covers the health insurance for employees with monthly wages not exceeding Rs.21,000/-. And it was not a mandate on employers to cover the health insurance for its all other employees drawing monthly wages more than Rs.21,000/-, however, many employers provided the health insurance through group insurance policies for such employees and it can be considered as a part of CTC.

Further to the Directives issued by IRDAI through this GOI dated 15.04.2020, which is not for only a limited period, therefore is a mandate for the employers to provide health insurance to all its employees.


Dear Bhuvana,

I read the guideline document, however unable to find out where it says that employee health insurance is now compulsory to all companies. Ours is IT company. So,


Hi Shefali,

This directive is issued by IRDAI on 16.04.2020 in furtherance to MHA’s consolidated guidelines dated 15.04.2020. I am sharing the link herein for your reference.