BENGALURU, IN / ACCESS Newswire / September 23, 2025 / Thinking your employer’s health insurance is a given? That’s far from reality for most employees working in micro, small, and medium enterprises (MSMEs) in India.
A new dataset from the National Institute for Micro, Small and Medium Enterprises (NI-MSME) reveals that less than 10% of MSMEs currently provide group health insurance coverage to their workers. Despite making up a major part of India’s workforce, most MSME employees are left uninsured, especially in the informal and unorganised segments.
Why This Matters
Group health insurance is often the first and only form of health protection for salaried workers. For MSME employees, who may not be able to afford individual plans, this could mean the difference between receiving timely treatment or delaying care due to cost.
Moreover, group plans come with added benefits like no medical checks, instant enrolment, maternity cover, and mental health support. These features are often difficult to access without employer sponsorship.
What the Numbers Show
The NI-MSME data indicates a low penetration of insurance across India’s 6.3 crore MSMEs, which employ over 11 crore people. Key findings include:
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Less than 1 in 10 MSMEs offer any form of group health insurance
-
Adoption is highest in urban Tier 1 service sectors, such as IT or financial services
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Manufacturing, construction, and retail sectors, where physical risks are higher, show very low coverage
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Micro and small enterprises are least likely to have any insurance benefits for their staff
This stark gap means millions remain vulnerable to health emergencies, with no financial backing from their workplace.
Understanding the Coverage Gap
|
Category |
Coverage Rate |
Insights |
|
MSMEs offering group insurance |
Less than 10% |
Most policies are offered by larger, registered firms |
|
MSME workforce in India |
110+ million people |
Estimated across 63 million MSMEs nationwide |
|
Informal/unregistered MSMEs |
~90% of all MSMEs |
Typically do not offer any employee health benefits |
|
Penetration in formal sector |
Approximately around between 50%-60% |
Largely driven by mandatory benefits in organised sectors |
|
Employees covered by group plans |
Around 8-10 million employees |
Based on insurance industry estimates |
With India pushing for universal health coverage and insurance inclusion, MSMEs represent the next frontier. Policymakers, insurers, and industry leaders are now focusing on this underserved segment, recognising that health protection isn’t just a big company benefit anymore but a basic workplace right.
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