IRDAI stalls TPAs move to run PSU health schemes

IRDAI has rejected a proposal by TPA’s to manage healthcare plans for public sector companies without group insurance. This means that companies will need to buy group health insurance to avail the services of TPAs. IRDAI had earlier said that TPAs can manage healthcare for state and central governments in addition to insurance companies. Recently, ONGC had invited bids from TPAs to manage a healthcare plan that the energy major was providing as part of its employee benefits. The TPAs then sought a clarification from the regulator as there was a view that PSU undertakings can be seen as an extension of the government. However, IRDAI, through a circular, clarified that PSUs do not come under the ambit of the relaxation which allows TPAs to provide healthcare schemes ‘promoted, sponsored or approved by central government or any state government’. This relaxation was provided four years ago to enable states that provide health schemes under the assurance model appoint administrators. Some corporate employers and state-undertakings are reluctant to take the insurance route as the 18% paid on premium adds to the cost. “Health insurance is not a catastrophic risk and some employers feel that what they need is only administration expertise that is available with TPAs rather than risk management, which is with insurance companies,” he added.