Why Your Group Health Policy Doesn't Cover OPD (And What It Costs Employees)

You renew the group mediclaim every year. The sum insured goes up. The broker confirms the family floater covers spouse, children and dependent parents. On paper, your people are covered.

Then the engagement survey comes back and healthcare benefits score badly. Employees say things like "the insurance never actually pays for anything."

They're not being unfair. For most of what they spend on healthcare in a year, they're right.

Group policies are built around admission, not care

Nearly every group health policy in India pays out on hospitalisation. The trigger is admission as an in-patient, and many policies define that as a stay of at least 24 hours.

That design made sense when the thing that bankrupted a household was a hospital bill. It still protects against the catastrophic event, and that protection matters.

But it means the care your employees actually use week to week — a consultation, the tests their doctor ordered, a dental filling, the annual check-up — sits outside the policy. It's out-patient care, and unless you've specifically bought an OPD add-on, the policy does not touch it. (A fuller breakdown of the OPD and IPD distinction, and why it decides who pays, is here.)

The result is a benefit that performs exactly as designed and still feels broken to the person using it.

What that gap actually costs

Listed metro prices, July 2026:

None of these is a large number on its own. That's precisely why the gap goes unnoticed in benefits design — no single line item is worth escalating.

Put a year together for one employee with a spouse and two dependants, using the middle of those ranges:

Illustrative, built from the listed ranges above — not survey data. Actual spend varies widely by city, family size and health status.

Roughly ₹16,000 a year, none of it claimable, sitting alongside a policy the employee knows the company pays a great deal for. That's the arithmetic behind the survey score.

Why it shows up in your numbers, not just theirs

Three ways this surfaces in metrics HR already tracks.

Benefits satisfaction lags benefits spend. You can increase the sum insured every year and move the satisfaction score barely at all, because you're improving cover for an event most employees will never have while leaving untouched the spending they do every quarter.

Care gets deferred. When a consultation costs ₹1,000 out of pocket, minor symptoms wait. We've written before about why employees delay healthcare even when benefits are there — cost at the point of care is a large part of it, and deferred out-patient care has a habit of becoming in-patient claims later.

Utilisation looks healthy while access doesn't. A policy with low claims ratios reads as efficient. It can equally mean people aren't getting care until it's serious.

Four ways HR teams are closing the gap

1. An OPD rider on the group policy. The most direct route. The insurer reimburses out-patient spend up to an annual cap. It's formal, it's auditable, and it sits inside the existing policy structure. The trade-offs: employees still pay full price at the counter and claim it back, caps are usually modest, and per-consultation sub-limits are common. It adds administrative load to a process employees already find tiresome.

2. A wellness or health allowance. A fixed amount employees can spend on healthcare, often via a reimbursement platform. Simple to communicate and popular. But it's a cost line that scales linearly with headcount, and it doesn't reduce the price of anything — it just moves who pays.

3. Single-provider tie-ups. A negotiated rate with one hospital chain or diagnostics brand. Easy to set up and genuinely useful for employees near that provider. The limitation is geography: a tie-up that works in Bengaluru does nothing for the team in Indore, and it fixes only the portion of spend that happens at that one brand.

4. A multi-provider healthcare membership. A single membership giving employees discounted rates across many unrelated providers — hospitals, diagnostic labs, pharmacies, dental and eye care. The discount applies at the counter, so there's no claim, no reimbursement cycle and no cap on how often it's used. Because the network spans providers rather than sitting with one brand, it covers a distributed workforce in a way a single tie-up can't. CarePass, our own membership, works this way across roughly 85 partner providers and 125 cities.

None of these replaces the group policy. Hospitalisation cover is still the thing that protects a household from a catastrophic bill. What they address is the other, quieter category of spending that the policy was never built for.

The question worth asking at renewal

Most benefits reviews ask whether the sum insured is adequate and whether the premium is competitive. Both are worth asking.

The one that usually goes unasked: of everything our employees will spend on healthcare this year, what proportion can they actually claim?

If the honest answer is "only the part where someone gets admitted," you've found the gap between what you're paying for and what your people experience — and it explains a benefits score that hasn't moved in three years despite the budget going up.