Covid 19 Medical Insurance and GST Implications

1. The guidelines issued by the Ministry of Home Affairs (MHA) Government of India vide order no. 40-3/2020-DM-I(A) dated 15.04.2020 amongst other things specifies that all industrial and commercial establishments, work places, offices, etc. shall be required to obtain medical insurance for the workers mandatorily before starting their operations after the lockdown (refer para 21 read with sr. no. 5 of Annexure-II to the given order). IRDAI in pursuant to the said order vide circular dated 16.04.2020 has advised insurers to offer comprehensive health insurance policies to individuals or groups to enable the above-mentioned organizations to comply with the government’s directions. The regulator has also advised the insurers to devise these comprehensive health insurance products with simple wordings and conditions and at an affordable cost for the stated organizations.2. Now the following aspects are yet to be clarified concerning the above-mentioned guidelines:a. Whether medical insurance for the workers already covered under the ESI Act, 1948 (i.e. those who earn less than Rs. 21,000/-) and thereby covered for various medical benefits (including in-patient treatment) is also to be obtained separately over and above the ESI coverage for compliance with the MHA guidelines? It would appear that the MHA guidelines intend to cast a wider net and mandate the provision of group/individual medical insurance also to employees not covered under the ESI Act, 1948 and therefore a separate cover for those already under the ESI may not be required.b. Will the mandatory medical cover be offered only till the pandemic is over? Guidelines are silent on whether the mandatory medical insurance will have to be provided till a certain period and if yes, what could be that period? Clarity on the period will enable insurance companies to come out with products to limit the cost of insurance.c. Whether a group policy is mandatory or even individual policy can be taken? Guidelines only provide that the medical insurance for all the workers would be mandatory. Therefore it would be optional for the employer to obtain group medical insurance cover (without individual underwriting) or even individual medical insurance cover considering the costs and the benefits.d. The cost of such mandated insurance also needs to be considered and capped to avoid putting an unreasonable burden on struggling sectors. Therefore clarity on the same is also required.e. The issuance of group cover requires time to access the risks and determine the premium cost. Therefore clarity is required on whether the mandatory cover is to be compulsorily obtained before starting the operations or the same can also be obtained within a reasonable time.f. It may also be noted that the revised guidelines issued by MHA on 01.05.2020 does not include the clause on obtaining the mandatory cover as provided under the earlier guidelines dated 15.04.2020. Therefore clarity is also required in this aspect.