GST ON PREMIUM PAID ON RENEWAL OF IBA GROUP INSURANCE POLICY 2025
While Government of India exempted payment of GST on Premium for individual health policies , group policies were not exempted . So some retiree associations approached High court of Kerala and obtained stay order from collecting GST . Retiree Association of Indian Overseas Bank ( ARISE ) is one of them .
The Kerala High Court has granted an interim stay on the collection of the 18% GST on the premium for the renewal of the IBA Group Health Insurance Policy for bank retirees, specifically in a petition filed by certain retirees/associations.
Here are the key points based on the available information:
- Interim Stay Granted: The Kerala High Court, in a Writ Petition (C), has granted an interim stay, directing at least one specific bank (Union Bank of India, in one report) to collect the health insurance premium from its retirees without GST, pending the final disposal of the case.
- Petitioners’ Contention: The petitioners (retiree associations and individuals) challenged the levy of 18% GST. Their main argument is that:
- The GST Council had intended to exempt individual health policies (especially for senior citizens) from GST.
- The retirees bear the full premium cost themselves, and the policy being classified as “Group Insurance” is merely for administrative convenience and should not be a reason to deny them the GST exemption benefit.
- Scope of the Order: As an interim order in a specific case, the immediate applicability is typically limited to the petitioners and the respondent bank in that case. However, such a judicial intervention gives momentum to the wider demand for GST exemption for all bank retirees across the country. Retiree associations are monitoring the situation and may file similar petitions or press the IBA and GST Council for a binding clarification applicable to all.
- Wider Issue: Bank retirees have been advocating for GST exemption on their medical insurance premiums for some time, arguing that the 18% GST (which is added to an already rising premium) is a heavy financial burden on senior citizens, especially since they pay the premium themselves, unlike serving employees whose premium is paid by the bank
- Bank retirees may consult their specific bank’s retiree association or legal counsel for the most accurate and up-to-date information regarding the direct impact of this court order on their policy renewal.
Group Medical Insurance Policy for Bank Employees/Retirees for the year 2025-26
Dated 13.09.2025 : As per a letter written by IBA to the banks , RPF issued has been finalized and the lowest bidder is the National Insurance Company Limited .
- Group Medical Insurance scheme in-lieu of Reimbursement of Hospitalisation scheme was introduced as per 10th Bipartite Settlement / 7th Joint Note dated 25.05.2015. The said scheme was extended to retired employees and their spouse with a condition that the premium will be paid by them. The existing policy (2024-25) is covering 5,75,166 serving employees and 1,51,668 retired employees.
2. During the finalisation of RFP for the policy period 2024-25, for the sake of convenience, it was desired to have a common commencement date for both serving and retired employees viz., November 1st of 2024. The then lead insurer viz., NICL agreed to extend the insurance till 31.10.2024, on payment of proportionate insurance premium for one month by the member banks who have subscribed to the insurance policy expiring on 30.09.2024. Accordingly, the current year policy (2024-25) is going to end on 31st October, 2025 for both serving and retired employees.
3. The Negotiating Committee of IBA, constituents of UFBU and other Union/ Association leaders met on 13.06.2025 and deliberated on the renewal of the existing Medical Insurance Scheme. Thereafter, consensus on the further improvements to be made was also deliberated in detail and a Memorandum of Understanding was signed.
4. Salient features of the signed minutes is enumerated below:
i. The sum insured for
a. Award staff shall be increased to Rs4 lakhs from the present level of’ Rs 3.00 lakhs
b. Officers up to Scale V: Increase to Rs. 5.25 lakhs from the present level of Rs4.00 lakhs
c. For scale VI and above: Increase to Rs7 lakhs from the present level of Rs 4.00 lakhs
ii. Corporate Buffer Amount shall be increased to 125 Crores from the present level of 100 Crores
iii. Cataract upper cap shall be Rs40000/ – per eye
iv. Hormonal therapy for cancer and lmmunotherapy for non-cancer to be included
V. Robotic surgery shall be considered in cases where the condition of patient warrants such treatment. This needs to be vetted by the treating doctor
vi. Thyroid cancer shall be included under critical illness benefit
Vii. For retirees: Mentally /physically challenged Dependent family member shall be included by way of add-on. Premium to be paid by retiree/ spouse
viii.Top-up options to be made available for z.1 lakh, 2 Lakh, 3 Lakh and 4 lakh the premium of which shall be borne by the serving employee / retiree.
5. During the meeting held on 24th June, 2025 the Managing Committee has approved to float the RFP. The salient points for the policy are enumerated below.
a. IRDA approved Insurance Companies will be invited to quote insurance premium for non-domiciliary Policy for in-service & retired employees. Separate loads for extending benefit of domiciliary treatment to employees and their families, critical illness benefits, and buffer insured amount will be quoted by the company. Hence there will be a single quote for non-domiciliary insurance premium for ‘in-service”
and retirees.
b. Sum insured shall be Rs 4 Lakhs for Award Staff and Rs.5.25 Lakhs for Officers upto Scale V and Rs7 lakhs for Officers in Scale VI and above, which is uniformly applicable to serving and retired employees.
c. Officer retired in Scale VI and above shall have option to choose a sum insured of Rs 5.25 lakh or Rs.7.00 lakh. Similarly, retired workmen shall have an option to choose a sum insured of Rs3.00 lakhs or Rs 4.00 lakhs. However, the insurance company for the purpose of submission of commercial bid shall consider premium quote for Rs 5.25 lakh for Officers and Rs 4.00 lakhs for workmen and the same shall be considered for arriving at L 1 quote.
d. Definition of family for the purpose of Serving employees and retired employees shall continue as hitherto. The Insurance company has to give a quote for Add-on to the policy of retired employees to extend the cover to such of those retired employee who wish to take medical insurance cover in respect of his / her dependent physically or mentally challenged dependent family member/ s. The premium quoted for Add on shall not considered for L 1 calculation.
e. Domiciliary benefit shall continue to be extended to serving employees and families. Retirees will not have domiciliary benefit.
f. Employees will be permitted to update dependents during the currency of the insurance policy only on account of Birth, Marriage of employee and Death of dependents. Substitution of dependent/s should be carried out by employees before commencement of Policy and will not be allowed during the policy period.
g. Critical illness benefits as defined in settlement dated 25.05.2015 shall continue with
existing terms for the employees only. Thyroid cancer shall also be included.
h. Corporate Buffer of z.125 Crores which is available to serving employees.
i. A committee consisting of CGM (HR) / GM (HR) of 5 participating member Banks will be formed to monitor performance of TPAs on regular basis and will recommend to delist hospitals/ medical units in the event of adverse feedbacks observed to the satisfaction of the Committee. If the performance of TPA is found wanting despite repeated observation of deficiency in the service/no improvement in service, the committee may recommend removal of TPA during the currency of the Policy also.
j. To encourage more retirees to draw the benefit, it is decided to allow any retiree who has not subscribed to the current insurance policy arranged by IBA to join the policy for the year 2025-26.
k. Apart from the existing limits mentioned in the scheme, the upper limit for
treatment of Cataract be kept at.40000/- per eye.
I. Hormonal therapy for cancer and lmmunotherapy for non-cancer to be included under daycare.
m. Robotic surgery shall be considered in cases where the condition of patient warrants such treatment and the same should be certified by the treating doctor.
n. Expenses on oral chemotherapy for treatment of cancer shall be payable with or without hospitalization
o. Top-up options to be made available for -1 lakh, 2 Lakhs, 3 Lakhs and 4 lakhs the
premium of which shall be borne by the serving employee I retiree. The premium quoted for these Top-ups shall not considered for L 1 calculation.
6. Accordingly, with the approval of the Managing Committee of IBA a RFP was floated on 05.07.2025, duly incorporating the revised terms as mentioned in the MoU dated 13.06.2025. We called quotes from IRDA approved Insurance Companies for arranging Medical Insurance Policies for in-service employees and bank retirees.
7. Total 6 bidders submitted technical bids on the last date of submission of technical bids
i.e. on 21st July, 2025 and on scrutiny, all the 6 bidders were found to be qualified. All such companies were asked to submit the commercial bids on 30th July, 2025. Accordingly, out of 6 technically qualified insurance companies following 5 companies submitted their commercial bids.
a. National Insurance Co. Ltd. (NICL)
b. New India Assurance Co. Ltd. (NIA)
c. The Oriental Insurance Co. Ltd (OIC)
d. Bajaj Allianz General Insurance Co. Ltd.
e. Aditya Birla Health Insurance Co. Ltd.
8. In presence of Bank, above mentioned 5 Insurance Company and IBA Officials, sealed envelopes containing commercial bids were opened. It was observed that National Insurance Co. Ltd. (NICL) emerged as L1 bidder, which was subsequently approved by the Managing Committee of IBA in the meeting held on 19th August, 2025. The premium for the arrangement of these policies for employees as well as the retirees, for the policy period commencing from 1st November, 2025, as approved by the Managing Committee, would be as below :
Medical Insurance Scheme Premium – Non -Domiciliary in excluding GST
1 . Serving employees :
- Officers of Scale VI & Above : Premium of Rs 60,001 for a cover of Rs 7 lakhs
- Officers of Scale I to V : Premium of Rs 40,231 for a cover of Rs 5.25 lakhs
- workmen : Premium of 31,001 for a cover of Rs 4 lakhs
2. Retirees :
- Officers : Premium of Rs 40,231 for a cover of Rs 5.25 lakhs
- workmen : Premium of 31,001 for a cover of Rs 4 lakhs
9. Further, as per the terms of RFP the insurance company had also submitted the following quotes, which is approved by the Managing Committee
a. various SI of Top-up policies for Serving and Retired employees
b. Retired Award Staff employee to opt for SI of – 3.00 lakh or – 4.00 lakh and Officer retired in Scale VI and above to opt for SI of – 5.25 lakh or – 7.00 lakh.
c. Retired employee who can opt for Single person policy as envisaged in the RFP viz.,
i. where retiree does not have surviving spouse or
ii. where retiree is survived by spouse (Retiree has passed away) or
111. where retiree does not require the insurance cover for the spouse
d. Add-on policy for physically / mentally challenged dependent family member of a retired employee.
Retiree Policy (Base Policy) premium –
- Retiree with spouse
- Premium of 27,001 for a cover of Rs 3 lakhs
- Premium of 31,001 for a cover of Rs 4 lakhs
- Premium of 40,231 for a cover of Rs 5.25 lakhs
- Premium of 60,001 for a cover of Rs 7 lakhs
2. Retiree Single :
- Premium of 24,301 for a cover of Rs 3 lakhs
- Premium of 29,251 for a cover of Rs 4 lakhs
- Premium of 37,181 for a cover of Rs 5.25 lakhs
- Premium of 48,001 for a cover of Rs 7 lakhs
Retiree Add-on policy premium –
For Physically / Mentally challenged dependent family member of Retiree with or without Spouse- Per dependent :
- Premium of 10,001 for a cover of Rs 3 lakhs
- Premium of 12,501 for a cover of Rs 4 lakhs
- Premium of 15,001 for a cover of Rs 5.25 lakhs
- Premium of 35,001 for a cover of Rs 7 lakhs
Top-up policy premium :
Serving Employee :
- Premium of 7,001 for a cover of Rs 1 lakhs
- Premium of 11,001 for a cover of Rs 2 lakhs
- Premium of 13,001 for a cover of Rs 3 lakhs
- Premium of 15,001 for a cover of Rs 4 lakhs
Retiree with Spouse :
- Premium of 12,501 for a cover of Rs 1 lakhs
- Premium of 20,001 for a cover of Rs 2 lakhs
- Premium of 29,301 for a cover of Rs 3 lakhs
- Premium of 39,001 for a cover of Rs 4 lakhs
Retiree Single :
- Premium of 10,621 for a cover of Rs 1 lakhs
- Premium of 17,001 for a cover of Rs 2 lakhs
- Premium of 24,901 for a cover of Rs 3 lakhs
- Premium of 31,201 for a cover of Rs 4 lakhs
Add-on Top up policy premium for Physically / Mentally challenged dependent family member of Retiree with or without Spouse- Per dependent
- Premium of 5,001 for a cover of Rs 1 lakhs
- Premium of 10,001 for a cover of Rs 2 lakhs
- Premium of 20,001 for a cover of Rs 3 lakhs
- Premium of 30,001 for a cover of Rs 4 lakhs
The policies are proposed to be issued: –
a. as per existing terms incorporated in the 10th Bi-partite Settlement/ Joint Note signed on 25.5.2015
b. subsequent addition in Domiciliary Scheme covered in the 11th Bi-partite Settlement signed on 11.11.2020
c. Approved targeted therapies for treatment of Cancer in day care and on standalone basis. (lmmunotherapy – Monoclonal Antibody Cancer treatment on standalone basis)
d. Treatment for Age related Macular Degeneration (ARMD) and Intra vitreal injections for eye disorders other than ARMD also, and
e. MOU signed between IBA on behalf of member banks & UFBU on 02.07.2024 and 13.06.2025
AIBEA TAKES UP WITH FM FOR WAIVER OF GST
IBA GROUP INSURANCE POLICY FOR BANK RETIREES
Dated 05.09.2025 : Recently, Finance Minister Nirmala Sitharaman announced exempting of individual life and health insurance policies from the purview of GST . However the exemption does not extend to group insurance policies .
Every year IBA arranges a group health insurance policy for the bank retirees and there is demand for a long time for waiver of GST on it . Bank retirees have taken up earlier for waver of GST on many platforms and they were hopeful of achieving it this time. But the new announcement is not helpful to bank retirees as they have to pay GST on the grop health insurance policy taken through IBA .
Now the leading bank employees union AIBEA has taken up with the Finance Minister to revisit the decision and include group insurance policies issued to the senior citizens also for the waiver of GST .
As renewal is due by November 1st , 2025 and time left is short , it is to be seen whether any positive decision will be made by the FM before renewal is effected .
To read AIBEA Letter to FM , click here
IBA CALLS FOR RFP FROM INSURANCE COMPANIES
Dated 15.07.2025 : Indian Banks Association ( IBA ) has called Request for proposal ( RFP ) from the insurance companies for the Group Insurance policy to be issued for both officers and staff including retirees with effective from 1st , November 2025 for one year .
The quote for “non -domiciliary” for “retiree and spouse” and “in service employee and family” as one group, for sum assured of ₹.4lakhs for workmen , ₹.5.25 lakhs for officers upto Scale V and ₹. 7 lakhs for officers in Scale VI and above is invited.
For further details , one can visit IBA website
RENEWAL OF BANKERS GROUP HEALTH INSURANCE POLICY
Bipartite Talks with IBA on Group Medical Insurance Policy for employees, officers and retirees
Increase in coverage to working staff , Retirees to bear the premium
Dated 13.06.2025 : Further to last round of meeting with IBA held on 21-5-2025 on renewal of the policy for the year 2025-26 and for discussing improvements in the scheme, one more round of meeting took place today between IBA and UFBU in IBA’s office in Mumbai.
IBA was represented by their team led by Shri Rajneesh Karnatak, Chairman of the negotiating Committee (MD&CEO, Bank of India). .
After discussion, it was agreed that this year also, it would be combined Policy covering both serving staff and retirees. While discussing the issue of improvement in base cover/sum assured, IBA informed that as per the statistical information available from the Insurance Company, it is observed that nearly 98% of the claims are below Rs. 3 lacs and about 85% of the claims ranged between Rs. 25,000 to Rs.30,000.
IBA also informed that an App is being developed by which claims upto Rs. 25,000 can be claimed digitally and to be settled without much hassle and delay. IBA also informed that last year the total claim under buffer was around Rs. 103 crores against the limit of Rs. 100 crores.
After further discussions, the following have been agreed to be incorporated in the Policy for the ensuing year 2025-26:
- The sum insured for
- Award staff shall be increased to Rs.4 lakhs from the present level of Rs. 3.00 lakhs
- Officers up to Scale V: Increase to Rs.5.25 lakhs from the present level of Rs.4.00 lakhs
- For scale VI and above:
Increase to Rs.7 lakhs from the present level of Rs. 4.00 lakhs
- Corporate Buffer Amount shall be increased to 125 Crores from the present level of 100 Crores
- Cataract upper cap shall be Rs.40,000/- per eye.
- Hormonal therapy for cancer and Immunotherapy for non-cancer to be included
- Robotic surgery shall be considered in cases where the condition of patient warrants such treatment. This needs to be vetted by the treating doctor.
- Thyroid cancer shall be included under critical illness
- For retirees: Mentally/physically challenged Dependent family member shall be included by way of add-on. Premium to be paid by retiree/ spouse
- Top-up options to be made available for Rs.1 lakh, 2 Lakhs and 3 Lakhs the premium of which shall be borne by the serving employee / retiree.
Based on the above, IBA would now take further steps to call for Tenders, etc. so that the Policy is renewed in time.
NEXT MEETING ON 13TH JUNE :
Dated 05.06.025 : Indian Banker Association ( IBA ) ha called for a meeting with constituents of UFBU on Friday 13th , June 2025 at their Mumbai office to continue the on-going discussion on the issue of renewal of group insurance policy .
In the previous meeting held on 21st , May , UFBU had presented a demand list which included bearing of premium to be paid by the retirees by the bankers themselves .
UNIONS ASK BANKS TO BEAR RETIREES’S PREMIUM
Dated 23.05.2025 : The group health insurance policy issued by The National Insurance Company, which expires on October 31, 2025, is scheduled for renewal from November 1, 2025, for a one-year period. The Indian Banks Association (IBA) had called a meeting with UFBU on May 21, 2025 . The meeting was held via video conferencing.
In the meeting , IBA team was led by Shri Rajneesh Karnatak (MD & CEO, Bank of India), Chairman of the Negotiating Committee and UFBU was represented by all constituent Unions.
During the discussions the following suggestions were placed from the Unions side:
- Existing Scheme of Group Medical Insurance should be continued further.
2.Policy should continue to be a combined Policy covering serving staff and retirees.
3.The base cover amount to be increased considerably under three categories viz. a) workmen staff b) officers upto Scale V and c) Officers Scale VI and above.
- Suitable increase in allocation under Buffer cover.
- Premium for the retirees to be borne by the Banks.
- Inclusion of new diseases and treatments under the Scheme.
7.TPAs should be effectively monitored and periodically reviewed to ensure quick disposals and to avoid unilateral rejections.
8.IBA should have a say in selecting and appointing TPAs.
- For serving staff, inclusion of parents (who are not dependents due to income criteria) under the Policy on payment of the extra premium by concerned staff.
- For retirees, dependent physically and mentally challenged children to be included for coverage as add on facility.
- All Hospitals to be covered under cashless facility.
- Adherence to IRDAI guidelines on cashless facility by all hospitals.
- Master Policy should be as per the provisions of our Settlement/Joint Note.
- Automatic trigger of Buffer cover upto prescribed amount for hospitalization for critical illnesses/specified diseases.
- Original Bills/Hospital reports, etc. to be submitted to the Bank/Branch to avoid TPAs asking the claimants to submit duplicate Bills/Reports.
- As per IRDAI guidelines, TPA should correspond with the Hospital for any query or clarifications about the treatment given.
- Inclusion of root canal treatment under dental treatment.
- Cost of artificial limb to be covered under the scheme
- Medicines prescribed life long after treatment to be covered under domiciliary treatment.
- Review of ceiling on room rent/bed charges
IBA noted down all our suggestions and assured to examine and discuss the same with the Insurance company to understand the cost implications before the issue could be further discussed with the UFBU in the next round of meeting.
Dated 17.05.2025 : The group health insurance policy issued by The National Insurance Company, which expires on October 31, 2025, is scheduled for renewal from November 1, 2025, for a one-year period. The Indian Banks Association (IBA) has called a meeting with UFBU on May 21, 2025, at 3.30 pm to discuss the policy renewal. This meeting will be held via video conferencing.