Telangana Cabinet Clears Accident Insurance and Cashless Health Schemes for Employees and Pensioners

Hyderabad, Feb 2026 : The Telangana Cabinet on Monday approved two major welfare initiatives—an accident insurance scheme and a comprehensive cashless health scheme—aimed at strengthening social security for government employees and pensioners across the state. The decisions were taken at a Cabinet meeting chaired by A. Revanth Reddy, marking a significant step toward expanding financial and healthcare protection for public servants.

Briefing the media after the meeting, Information and Public Relations Minister Ponguleti Srinivas Reddy said the newly approved accident insurance scheme would provide full financial security to all serving government employees and pensioners in Telangana. Notably, beneficiaries will not be required to pay any premium, and the scheme will impose no additional financial burden on the state exchequer.

The insurance cover will extend to around 5.19 lakh regular government employees and 2.38 lakh pensioners, bringing the total number of beneficiaries to approximately 7.57 lakh. Implemented through banks, the scheme offers compensation of ₹1.2 crore in the event of accidental death. In cases of natural death up to the age of 60, an additional ₹10 lakh will be paid over and above the regular service or pensionary benefits, the minister said.

In another landmark decision, the Cabinet approved the long-awaited Cashless Employee Health Scheme (EHS), fulfilling a key demand raised by employee unions for several years. This scheme will benefit about 3.56 lakh employees, 2.88 lakh pensioners, and their dependent family members, taking the total coverage to nearly 17.07 lakh beneficiaries.

Under the EHS, treatment will be entirely cashless at all government hospitals and 652 empanelled private hospitals across Telangana. The scheme will cover as many as 1,998 medical procedures, ensuring comprehensive healthcare access without upfront payments. To streamline access, Digital Health Employee Cards will be issued to all beneficiaries.

The cashless health scheme will be implemented through the Rajiv Aarogyasri Health Care Trust. Employees will contribute 1.5 percent of their basic pay, with the government making a matching contribution. The Trust will operate with an annual outlay of ₹1,056 crore, equally shared between employees and the state government at ₹528 crore each.

Beyond welfare schemes, the Cabinet also cleared a set of reforms aimed at improving healthcare administration in the state. As part of this restructuring, the Telangana Vaidya Vidhana Parishad (TVVP) will be converted into the Directorate of Secondary Health (DSH). The move will transition TVVP from its autonomous status into a full-fledged government department, enabling faster procurement of medicines and surgical supplies, smoother salary disbursement, and overall improvements in service delivery.

Additionally, the Cabinet decided to constitute a special committee under Health Minister Damodar Raja Narasimha to study deeper structural reforms in hospital administration. The panel will examine the feasibility of separating medical and administrative services to enhance efficiency and accountability within the public health system.

Together, these decisions underscore the Telangana government’s focus on employee welfare and systemic healthcare reforms, with the twin goals of financial security and accessible, high-quality medical care.