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suresh menon (public sector)     04 November 2011

Query on group insurance schemes

Hi,

 

I work for an IT company. This year they have deducted 1500 from the salary for health insurance of the employee and his dependents for a group medical insurance scheme. But in previous years they were not deducting any amout from employee salary for insurance. 

 

I didnt want pay the amount as i was serving my notice and insurance coverage is only as long as i stay in the company.

 

i have not given any written or mail consent for the same and yet they have deducted the amount.

 

They had sent the mail in 1st of the deduction month. But it was never mentioned in any of their mails that all employees will be covered under it. and I thought it is some scheme that they have found at less price where a willing employee can opt by sending him his consent.

 

After the first month deduction i contacted them to cancle my policy as i didnt opt for it. But got a reply for that stating all active employees on 1st of the deduction month have to compulsorily join and i cannot opt out of it.

 

Please suggest if such a deduction is legal as

 

1) there is no employers share towards the premium

 

2) It was never mentioned in the mail that they dont need employees consent for deducting. and if u r unwilling you have to contact them to opt of it before a certain date

 

3) I have not given any written or mail consent for the same, and can anybody act on my behalf and deduct amounts from my salary.

 

4) The premium amount , insurance provider and the plan opted may not be of employees choice

 

Regards,

suresh



Learning

 9 Replies

suresh menon (public sector)     04 November 2011

Also I wanted to mention that we are new to such group insurance schemes deductions.

In Previous years Insurance Premium was mentioned, but not as a part of the salary but as a additional cost beared by the company as part of the CTC

kameswarao S (Head HR)     04 November 2011

Hi suresh,

I believe you have raised the same query under the caption " Deduction of premium for insurance with out employees consent" and our learned friends given their opinion and suggestions.

Regards - kamesh

V. VASUDEVAN (LEGAL COUNSEL)     05 November 2011

Under the Payment of Wages Act, no deduction can be effected from employee's wages/salary unless the employee gives specific consent/authority in writing. Hence even if they have circulated any information about any group scheme, no deduction can be made unless you have confirmed by a written consent

1 Like

suresh menon (public sector)     05 November 2011

Hi Vasudev sir,

Thank you very much for the reply

That is what i was exactly thinking

If we are in any group, the group holder can form N number of such group policies, he inturn can get commision. and deduct a considerable amount from the group members. If it were to be legal

Please correct me if I am wrong.

Regrds,

suresh

Kumar Doab (FIN)     05 November 2011

Learned Mr. Vasudevan has given valuable advice. Kindly follow it.

 In this post you have mentioned that "In Previous years Insurance Premium was mentioned, but not as a part of the salary but as a additional cost beared by the company as part of the CTC"

You had not mentioned it in your another post on the same matter, which is;


Forum Home > Others > Labour & Service Law > Deduction of premium for insurance without employees consent

https://www.lawyersclubindia.com/forum/Re-Re-Deduction-of-premium-for-insurance-without-employees-consent-46155.asp

 You have posted in your other post mentioned above that during previous years company was paying the total amount of premium. And then it was included in CTC. Thus company has not deducted it from your earned salary/wages.

HR of your company can give you the detailed info to your queries, and is duty bound to do so. If you have any doubts you can collect the relevant info from the insurance company’s local office or raise RTI, and find out if employer is contributing any premium or not? The reply by RTI shall help you. You should find out whether option of employer to opt for paying 20% of claim amount ( if it arises) in lieu of making contribution for premium is legitimate or not? You can visit the nearest office of LIC also, and meet some of the senior DO, or CRM section, or the Trainer. These officials are highly knowledgeable and helpful. The matter is related to principles of insurance and company must have obtained legal consultation before implementation.

With reference to your points number 2 & 3 mentioned in this post, although you have not given any concurrence, company has already replied stating “all active employees on 1st of the deduction month have to compulsorily join and i cannot opt out of it”. Is this reply in writing?

You may go thru the details of group insurance provided to you in your post whose link is mentioned above, and is attached also.

You have mentioned in another post about “lien on my FD and service agreement” that company has caused harassment to you. Hence if the company is offender, it should not be spared.

In future kindly make it a habit to confirm your humble acceptance or rejection, in writing.

 

1 Like

Kumar Doab (FIN)     05 November 2011

Kindly go thru the attachment.


Attached File : 60926 222093 30 basics of group insurance.doc downloaded: 99 times
1 Like

suresh menon (public sector)     06 November 2011

Hi Kumar sir,

I have all communication in mails. I even have all the circulars sent by them on mail. salary slips for proof of deductions. and the pdfs of the scheme. I have taken all the required documents.

My only doubt is on legality of the deduction. As some are saying it is legal and some are saying it is not

Regards,

suresh

suresh menon (public sector)     07 November 2011

I will raise an RTI as kumar sir suggested after i recieve my full and final to the insurance company and contact the HR of my company for furthur validity and clarification. and post the development of the same

Kumar Doab (FIN)     08 November 2011

In the meantime if it is conducive for you, then you may post the circulars, emails exchanged with the company.

Learned experts/members may be in a position to give opinion which can help your cause.


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