Under the Employee State Insurance Act (ESI Act), 1948, enrolled individuals can avail of benefits in the form of financial coverage during any untimely health-related eventuality. Under this scheme, eligible members can enjoy disability benefits, medical benefits, maternity benefits, unemployment allowance, etc.
This scheme is a godsend for employees who can enjoy financial coverage during medical emergencies.
Prime Minister Pandit Jawaharlal Nehru rolled out the ESIC scheme on February 24, 1952. The primary purpose of the Employee State Insurance Act (ESI) is to offer social security to workers with regard to sickness, permanent or temporary disability or death during employment. The Employees State Insurance Act, 1948 provides provisions for a worker’s immediate dependents.
Under Section 2(12), this Act applies to all non-seasonal factories with 10 or more employees. This scheme extends to:
Employees’ State Insurance Act, 1948, aims to offer financial benefits to enrolled workers during sickness, pregnancy, and any disability (permanent or temporary) due to employment injury.
Under the Employees’ State Insurance Act, the insured person and his/her dependents will receive cash benefits, medical relief, maternity cover, and compensation for fatal diseases or injuries. In addition, dependents of deceased workers will receive a pension.
Let’s delve into some of the key features of this Government-sponsored social security scheme.
Insured members can avail of compensation of up to 70% of their wages during periods of certified sickness. This facility is valid for 91 days during two consecutive benefit periods. In case of long-term ailments, you can enjoy up to 80% compensation rates for 2 years.
Under medical benefits, you can get cover for surgical care, doctor’s consultation, ambulance charges, and medication. There is no limit on such expenses.
Beneficiaries can avail about 90% of their salaries as compensation in case of temporary disability. These benefits are available from the 1st day of employment.
Under such circumstances, individuals will get paid for the loss incurred in their earnings during that period. But a disability should last for more than 3 days from the accident date.
Women employees can receive cash benefits due to health issues resulting from premature birth, miscarriage, pregnancy, confinement, and medical termination of pregnancy.
The maximum compensation period ranges between 6 to 12 months, based on the medical requirement. This period can get extended by 1 more month.
You will have to contribute for at least 70 days in 2 successive contribution periods before your period of cash benefit.
In case of any death due to an accident during employment, a deceased member’s dependents can receive 90% of their salary. Parents and spouses can enjoy these benefits till their death. But children can avail themselves of the benefits till the age of 25 years.
In case of death, dependents can claim up to Rs. 10,000 to complete all final rituals of an expired employee.
After coverage for at least 5 years, you and your spouse can utilise various medical benefits even post-retirement.
You must pay Rs. 120 as a fee every year to avail of this benefit.
After being insured for at least 3 years, if you lose your job due to retrenchment, closure of workplace, or permanent disability, you can receive certain benefits under Rajiv Gandhi Shramik Kalyan Yojana.
These benefits will include medical assistance and an unemployment allowance of up to 50% of salary for at least 1 year.
The Employee State Insurance Act offers benefits to both the workers and their family members during loss of wages or disability. The dependents of the employee who are covered under ESI are:
These are some of the benefits the dependents can avail as per the existing scheme:
Under this Act, employees with daily wages less than Rs 137 are not required to pay their contribution to the ESI Corporation. They are called ‘exempted employees’. However, the employer still needs to contribute his/her share to the corporation.
The employer is exempted from contributing to the wages paid to the employees with disability for a maximum period of 10 years from the starting date of the contribution period.
As per the ESIC Act 1948, the scheme applies to all factories (except seasonal) and other establishments with 10 or more employees. The establishments covered under the ESIC scheme are:
The monthly wage of the employees/beneficiaries under this scheme should not exceed Rs 21,000 and Rs 25,000 for disabled persons.
The ESI scheme is contributory in nature. The insurance fund contribution payable to the ESIC comprises the employer’s contribution and the employee’s contribution at a specified rate which are revised from time to time. The current contribution rates, with effect from 01.07.2019, are as follows:
|Employee||0.75% of the wages|
|Employer||3.25% of the wages|
The employers are liable to pay their contribution as well as the employee’s contribution (deducted from their wages) within 15 days of the last day of a calendar month.
Employers can make their contributions online through the ESIC portal. Here are the steps to make an ESIC e-payment.
The ESIC has also authorised designated branches of the State Bank of India and some other banks to receive offline payments.
The employers also need to furnish some details about their employees for successful registration. If it’s an employee who is already registered under ESIC, the employer needs to provide the employee’s insurance number and date of appointment.
The ESI Corporation has set up an organised system for the speedy redressal of public grievances. Grievances can be reported both online and offline to the Public Grievance Officer.
The Employee State Insurance (ESI) Act provides a range of benefits to workers. It also offers a financial safeguard to the families of an injured or deceased employee while at work. Social security schemes and insurance plans are thus of utmost importance in our daily lives. Individuals failing to comply with the eligibility of this scheme can alternatively opt for a health insurance policy from institutions such as Navi. Navi provides a wide range of benefits from 10,000 plus network hospitals, daycare treatments, pre and post-hospitalisation charges and health cover up to 1 crore. Monthly Premium starts from just INR 241. Download the Navi App today!
Ans: Pehchan Card is the other name for an ESIC card.
Ans: In case of the demise of employees while at work, the benefits will get transferred to their dependents.
Ans: The records needed are:
Employee Wage Master
Books of Accounts
Accident Register in Form 11
Ans: Yes, it is mandatory for an eligible employee to register with the ESI scheme. Employees who earn more than Rs. 21,000 per month are exempted from paying their contribution to the scheme.
Ans: The ESIC code number is a unique 17-digit identification number provided to every employer who is registered with the ESI scheme.
– The format of the employer code number is as follows:
– The first 2 digits represent the current region in which the company is established.
– The next 2 digits represent the parent region (headquarters).
– The next 6 digits represent the company’s unique code.
– Next 3 digits represent the number of branches of the company.
– The last four digits represent the nature of the business.
Employees also get a unique identification number after successful registration. That number is known as the Employee Insurance Number.
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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