Hyderabad, February 24, 2026 — In a major welfare boost for government employees and pensioners, the Telangana Cabinet, chaired by Chief Minister A. Revanth Reddy, on Monday approved two landmark schemes: a free accidental insurance cover of ₹1.2 crore and a comprehensive cashless Employees Health Scheme (EHS).
The decisions, announced following the Cabinet meeting, aim to provide enhanced financial security and healthcare access to lakhs of beneficiaries without imposing any premium burden on employees or additional financial strain on the state exchequer.
Under the Accident Insurance Scheme — described as India's first free scheme of its kind — government employees and pensioners will receive ₹1.2 crore compensation in the event of death due to an accident or untoward incident. Additionally, a term insurance benefit of ₹10 lakh will be provided for natural death up to the age of 60 years, over and above regular benefits.
The scheme, to be implemented through leading banks, covers approximately 7.57 lakh beneficiaries, including 5.19 lakh regular employees and 2.38 lakh pensioners. It extends to regular government employees, corporation staff, and pensioners, ensuring broad protection with zero premium cost to individuals or the government.
In tandem, the Cabinet greenlit the long-pending Cashless Employee Health Scheme (EHS), fulfilling a key demand from employees for seamless medical coverage. This initiative will benefit around 17.07 lakh people, encompassing 3.56 lakh regular employees, 2.88 lakh pensioners, and their dependent family members.
The health scheme enables cashless treatment across all government hospitals and 652 empanelled private hospitals, covering 1,998 medical procedures. Beneficiaries will receive digital health cards for easy access. Funding will come from a dedicated trust with an annual allocation of ₹1,056 crore, contributed equally by the government (₹528 crore) and employees (₹528 crore through a 1.5% deduction from basic pay).
Revenue Minister Ponguleti Srinivas Reddy briefed the media on the decisions, highlighting their significance in ensuring total financial and health security for the state's workforce.
These initiatives come amid other major Cabinet approvals, including the takeover of the Hyderabad Metro Rail from Larsen & Toubro by March 31, and various infrastructure and water projects.
Employee unions and associations have welcomed the moves as progressive steps toward employee welfare, with the schemes set to roll out soon following final modalities.
The announcements assume added importance ahead of the Telangana Assembly's budget session, commencing March 16, with the state budget slated for presentation on March 20.
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