Flexible health insurance plans have seen an upsurge of almost 300 per cent in the last five years in India, said a report on Tuesday.
The report by Mercer Marsh Benefits (MMB) showed that even as the workforce in the country is evolving, organisations are reinventing benefits to meet diverse employee needs. Beyond statutory provisions, companies are increasingly introducing innovative solutions like flexible health insurance plans.
The inclusive coverage options focus on parents, siblings and wellness programme, and financial planning tools. These forward-thinking approaches not only enhance employee well-being but also help attract and retain top talent in a competitive landscape, the report said.
“Employee benefits in India are no longer just about healthcare coverage; they are evolving into holistic well-being solutions. There is a significant shift towards flexible, inclusive, and future-ready benefits,” said Prawal Kalita, Managing Director, Mercer Marsh Benefits India Leader.
“The adoption of flexible health insurance has surged by 300 per cent in the last five years. Employers are recognising the value of offering comprehensive support — from parental insurance to mental health programmes — to meet the diverse needs of their workforce,” Kalita added.
The report highlighted the transformative changes in India`s employee benefits landscape including employer sponsorship for parental insurance which increased from 35 per cent in 2019 to 53 per cent in 2024. The provision is a key benefit for employee retention and well-being.
Organisations and insurers are also promoting cashless hospitalisation, leading to higher payout ratios and a reduction in the average hospital stay from 5.9 to 5.3 days.
Further, understanding the workforce needs employers are increasingly expanding coverage to include fertility treatments, surrogacy, and adoption benefits. Employees are also demanding greater autonomy in choosing benefits, leading to increased adoption of customisable insurance and wellness programmes.
Organisations are prioritising preventive healthcare measures, including early diagnosis, screenings, and wellness programmes, to reduce long-term medical expenses, the report said.
“As businesses compete for talent, benefits strategies must go beyond statutory provisions and embrace innovation, ensuring they remain relevant, cost-effective, and impactful for employees across all life stages,” Kalita said.
