Two public schemes, neither universal

India has no single health insurance plan that covers everyone. For people in work, the main statutory scheme is Employees’ State Insurance, run by the Employees’ State Insurance Corporation (ESIC). It gives insured workers and their families medical care and cash benefits through ESIC hospitals and dispensaries, and employees join it through their employer, which registers them.

The second public scheme is Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, usually shortened to PM-JAY. It is tax-funded hospitalisation cover for eligible low-income families, and it now also covers every Indian citizen aged 70 or over, whatever their income. Seniors who already hold private insurance or ESI stay eligible, and the over-70 cover has no waiting period.

This touches benefits design, since group policies in India often include parents, and a parent aged 70 or over may already hold public hospital cover in their own right.

What the Code on Social Security changed

The Code on Social Security, 2020 folded nine older social security laws into one framework. It took effect, alongside India’s three other Labour Codes, on 21 November 2025. For employers the headline change is reach: ESI now extends across the whole country, where it used to be limited to notified areas.

ESI applies to establishments with 10 or more employees. A smaller establishment can join voluntarily when employer and employees agree, and in hazardous occupations coverage is mandatory even with a single worker. The Code also widened the family that can use ESIC benefits. For a woman employee it now includes her parents-in-law, within an income cap, and it covers a dependent minor unmarried brother or sister when the parents have died.

Two further changes reach remote and mobile staff. An accident while travelling between home and work now counts as happening in the course of employment, so ESIC or compensation benefits can apply. Gig and platform workers are also recognised for the first time, with social security schemes for them that may run through EPFO and ESIC.

The wage ceiling splits a team in two

ESI covers only employees whose monthly wages fall below a ceiling set under the scheme. ESIC publishes the current figure, so confirm it when you make the hire rather than relying on an older payroll guide. Below the ceiling, at a covered establishment, registration is mandatory and both employer and employee contribute a share of wages.

Above the ceiling the picture flips. Those employees sit outside ESI and have no statutory health insurance, so whatever the employer provides privately becomes their main health benefit. Compare the offered salary with the ceiling early, because it decides how much work the private benefit has to do.

Employers also pay into the Employees’ Provident Fund, run by EPFO, whose coverage the Code has extended as well. It is a retirement scheme rather than health cover, so it leaves the health question unchanged for both groups.

Group mediclaim and family floater cover

Group health insurance, widely called group mediclaim, is the voluntary benefit salaried, white-collar staff in India most often receive. It typically pays for hospitalisation, and policies can extend to a spouse, children and often parents. Many are written as family floater cover, where one sum insured is shared across the employee’s household.

Tax guides say a medical insurance premium the employer pays for an employee under an approved scheme is not treated as a taxable perquisite. They are less consistent about reimbursing a policy the employee bought, so the way the benefit is paid matters. The employee cannot claim the income tax deduction for health premiums on cover the employer paid for, though they can for a personal top-up policy. Before settling the structure, check with a local adviser or tax professional in India.

Can an international plan stand in?

For an employee under the ESI ceiling at a covered establishment, it cannot. ESI registration is mandatory, and an international plan can only sit on top of it.

For an employee above the ceiling there is no statutory health insurance to replace, so a private or international plan can be the main cover. India still regulates who may sell insurance: insurers must be registered with the Insurance Regulatory and Development Authority of India (IRDAI) to carry on insurance business there. Whether a given insurer can write a plan for someone living in India is that insurer’s question to answer.

Give dependants their own line in the plan. A global policy that covers only the employee can look thin beside a local floater that includes parents, so decide early who the benefit is meant to protect. Our overview of international health insurance for remote employees shows how top-up and stand-alone cover compare from country to country.

Employer of record or contractor

EOR guides say a US company without an Indian entity usually employs someone there through an employer of record. In those guides, the EOR becomes the legal employer, registers the employee for EPF and, when they are eligible, ESI, and typically arranges group health insurance through its own broker relationships. Ask what that group policy includes before adding anything of your own, or you may end up paying twice for the same hospital cover.

A genuine independent contractor is a different case. The client does not register them under ESI or EPF, and they arrange their own health insurance. Calling someone a contractor does not make them one, and our guide to health coverage for EOR employees and contractors abroad sets out how the two arrangements compare.

Getting an introduction for your team in India

Mithril1 does not sell or recommend health plans. When you want help with cover for staff in India, we can introduce you to a benefits partner that handles international and remote-team health coverage, and the partner and the insurer decide eligibility, plans and pricing.

Use the quote form on this page. Tell us which Indian city your employee lives in, how many people are on the team, whether they are hired through an EOR or your own entity, and roughly where their salaries sit against the ESI ceiling. Mention any parents or other dependants they want included, and we will pass the details to a benefits partner.

A few useful answers

Common questions

Does my employee in India have to be in ESI?

When they work for a covered establishment and their monthly wages fall below the ESI ceiling, registration is mandatory and the employer registers them. Employees paid above the ceiling are outside the scheme and have no statutory health insurance.

Does ESI now apply everywhere in India?

Since the Code on Social Security took effect on 21 November 2025, ESI reaches the whole country instead of only notified areas. The 10-employee threshold for establishments still applies, with voluntary joining below it and mandatory cover in hazardous occupations.

Can an international plan replace ESI?

Not for an employee inside the scheme, where an international plan can only top ESI up. For someone above the wage ceiling, a private or international plan can serve as the main cover.

Can a health benefit in India include my employee's parents?

Indian group policies often extend to parents, frequently as family floater cover shared by the household. Parents aged 70 or over may also have PM-JAY hospital cover as Indian citizens, whatever their income.

International Health Insurance for Remote Employees in India