Money & Banking

Exempt premium payable on group medical insurance of retirees from GST: AIBEA

Our Bureau Mumbai | Updated on October 08, 2019 Published on October 08, 2019

A file photo of CH Venkatachalam, AIBEA General Secretary   -  M. SRINATH

The premium payable on the Group Medical Insurance Policy by retired bank officers and workmen staff should be exempt from Goods and Services Tax (GST) as their basic pension has been virtually static, but the annual health insurance premium has been going up, according to the All India Bank Employees’ Association.

There are more than 4.50 lakh retired bank employees and officers.

Of this, the Association found that only about 1.50 lakh retirees are subscribing to the Group Medical Insurance Scheme.

“In view of the repeated increase in premium year after year, the number of subscribers have dwindled sharply and more and more retirees are going out of coverage of this well-intended scheme,” said CH Venkatachalam, General Secretary, AIBEA.

He said the Association’s plea for a portion of the premium payable by the retirees to be borne by the bank managements have not succeeded so far. Further, its representation for revision of pension on periodical basis has also not been accepted so far.

Hence, while the basic pension of retired officers and workmen staff is virtually static, the annual health insurance premium has been going up.

“In this background, it will be of great help and relief to these retirees/ senior citizens if the premium payable on the Medical Insurance Policy by the senior citizens is exempt from GST. We urge upon you and the GST Council to take a positive view in this regard,” said Venkatachalam in a letter to Finance Minister Nirmala Sitharaman.

At present, retired workmen employees are covered up to Rs 3 lakh per year, and retired officer staff up to Rs 4 lakh. In addition, there is an option for additional top-up coverage of Rs 4 lakh and Rs 5 lakh.

“The retired employees are required to pay GST at the rate of 18 per cent on the premium amount and you will kindly appreciate that the GST amount is quite a burden for these senior citizens, who are getting a limited pension amount,” said Venkatachalam in the letter.

The annual premium, including GST for retired workmen staff for a medical insurance cover of Rs 3 lakh has jumped from Rs 5,620 for the November 2015-October 2016 period to Rs 24,897 for the November 2019-October 2020 period.

The annual premium, including GST, for retired officers for a medical insurance cover of Rs 4 lakh has soared from Rs 7,598 for the November 2015-October 2016 period to Rs 33,193 for the November 2019-October 2020 period.

Published on October 08, 2019
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