Employee State Insurance

Employee State Insurance (ESI) is a social security and health scheme and is so administered by the Employee State Insurance Corporate (ESIC), a statutory body enacted by the Government of India. It falls under the purview of Ministry of Labour and Employment and seeks to provide benefits to employees and their dependants in case of sickness, maternity, injury or disability.

Under this scheme, both the employer and employee contribute a certain percentage of the employee salary towards the ESI Fund. The accumulated fund is then used to provide various benefits to such employees.

OBJECTIVES OF ESIC

• To provide comprehensive benefits to the employees and their dependants in cases of sickness, maternity, injury or disability.
• To promote health and safety at workplaces by providing training, awareness programs, and other initiatives.
• To encourage employment in the organized sector and promote social and economic well-being.
• To ensure compliance with various laws including labour laws related to security and health benefits on the organized sector.
• To regulate all the laws and rules complied by various organizations.

BENEFITS OF ESI

There are several benefits associated with the ESI. We will look into one by one.

• Medical Benefit: An insured person and his family member under ESI are entitled to full medical care. There is no ceiling on expenditure on the treatment of any an insured person and his family member.

• Sickness Benefit: It is provided to the insured person in the form of cash in the event he falls sick to certain diseases (as amended from time to time) at the rate of 70% of the wages upto a maximum of 91 days in a year.
  • The eligibility to avail sickness benefit is that the insured person needs to contribute for 78 days within a period of 6 months.
  • The employee can also avail the “Extended Sickness Benefit”- applied in the case of long term diseases at a rate of 80%- and “Enhanced Sickness Benefit”- applied in case of sterilization at a rate equal to full wage.

• Maternity Benefit: It is provided in case of pregnancy and is payable at the rate equal to full wages. It is payable for 26 weeks and extendable by further one month.

• Disablement Benefit: It can be discussed in two parts:
  • Temporary Disablement: An insured person is entitled to this benefit from day one of entering into insurable employment if such disablement arises from employment injury. It is payable at the rate of 90% of the wages and extends till the disability continues.
  • Permanent Disablement: An insured person is entitled to this benefit payable at the rate of 90% of the wages and is dependent on the loss of earning capacity of the insured person.

• Dependents Benefit: In case of death of the insured person due to employment injury or occupational hazards, his dependants are entitled to this benefit at the rate of 90% of the wages.
• Besides these, an insured person’s dependants are also entitled to Rs. 15,000 for funeral expenses in case of the insured person’s death.

ELIGIBILITY FOR ESI

The provisions of Employee State Insurance Act, 1948 are applicable to the following establishments:

• Applicable on factories employing 10 or more persons. In certain states i.e Maharashtra, this limit is 20.

Applicable on people drawing wages upto the limit of Rs. 21,000 per month. This limit is Rs. 25,000 in case of persons with disabilities.

CONTRIBUTIONS

The ESI Scheme is, by its’ nature, contributory. It means that the amount towards the ESI is contributed by both the Employer and the Employee as per ESI Act, 1948. These rates vary from time to time and one needs to look for the recent ones.

As of now, the rate of ESI Contribution is 4% of the monthly wages. Out of this 4%, 3.25% is to be contributed by the Employer while the remaining 0.75% is to be contributed by the Employee.

CONCLUSION

In Conclusion, the Employee State Insurance Scheme is and has been playing a crucial role in providing health and social security to the salaries individuals in India. This scheme has been successful in reducing the financial burden of medical expenses on the insured person.

The ESIC efforts to expand the scheme’s coverage and benefits have been commendable, and there is a need to continue to improve the quality of healthcare services and facilities under this scheme. It has also helped to create a secure and productive workforce which is very essential to country’s economic growth.

However, there have still been challenges such as administrative delays and overall efficiency of this scheme. Therefore, more efforts need to be put in to increase awareness of the scheme among the workers, especially those in the informal sector.

Disclaimer : The information contained in this article is intended solely for the dissemination of information and does not aim at solicitation of work. Though meticulous care has been taken but the author assumes no liability in respect of any loss/ damage incurred while acting on the information provided in this article. The author can be reached at sanjeev@semantictaxgen.in and can be called at +91-9654831210.