The Group Medical Insurance scheme was introduced as part of an agreement reached on May 25, 2015, known as the 10th Bipartite Settlement. This scheme replaced the previous Reimbursement of Hospitalisation plan and was designed to help employees manage medical expenses.
Key Features of the Scheme
- Eligibility: The scheme covers both active employees and retired employees, along with their spouses. However, retired employees are required to pay the premium themselves.
- Current Coverage: As of the latest policy year (2023-24), the scheme covers approximately 5,76,975 active employees and 1,36,388 retirees. Due to rising premiums for retirees, there was a need to review the terms of the scheme.
- Policy Expiration Dates: The current policy will end on:
- September 30, 2024, for active employees
- October 31, 2024, for retired employees
Recent Meetings and Decisions
On July 2, 2024, representatives from the Indian Banks’ Association (IBA), the United Forum of Bank Unions (UFBU), and various union leaders held a virtual meeting to discuss the Medical Insurance Scheme. They reached an agreement on several important changes, and the minutes of the meeting were formally recorded.
Key Changes Announced
Here are the main points from the recent meeting:
Combined Policy: It has been agreed that the policies for active and retired employees will be combined across all Public Sector Banks (PSBs).
Family Definition: The definition of “family” remains the same for both active and retired employees.
Updating Dependents: Employees will be allowed to add or update dependents due to events like birth, marriage, or the death of a dependent during the policy year. However, these changes must be made before the policy starts and cannot be done during the policy period.
Domiciliary Benefits: Only active employees will receive domiciliary benefits; retirees will not have this coverage.
Critical Illness Coverage: The coverage for critical illnesses, as defined in the 2015 settlement, will continue to be available for active employees.
Corporate Buffer: The Corporate Buffer of Rs.100 crore for active employees will remain in place.
One-Time Enrollment for Retirees: To encourage more retirees to take part, any retiree who has not joined the current policy will have a one-time opportunity to enroll for the 2024-25 policy year. Once a retiree opts out, they will not be allowed to rejoin.
Common Start Date for Policies
The meeting also discussed setting November 1, 2024, as the common start date for the insurance policy for both active and retired employees. The current insurer, National Insurance Co. Ltd. (NICL), has agreed to extend coverage for one month, allowing member banks to pay a proportionate premium for this additional coverage. A formal letter regarding this extension was sent to member banks on September 3, 2024.
Next Steps: Request for Proposals
After receiving approval from the IBA’s Managing Committee, a Request for Proposals (RFP) was issued on July 22, 2024, to incorporate the new terms. Insurance companies approved by the Insurance Regulatory and Development Authority (IRDA) were invited to submit bids for providing medical insurance policies for both active employees and retirees.
Bidding Process
By the deadline for technical bids on August 9, 2024, six insurance companies submitted their proposals. Out of five technically qualified companies, four submitted commercial bids by August 23, 2024:
- National Insurance Co. Ltd. (NICL)
- New India Assurance Co. Ltd. (NIA)
- The Oriental Insurance Co. Ltd. (OIC)
- Go Digit General Insurance Co. Ltd.
The sealed commercial bids were opened in the presence of bank and IBA officials. NICL emerged as the lowest bidder, and this was subsequently approved by the IBA Managing Committee.
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