ESI Full Form

Given the busy agendas and sedentary lifestyles, the average human being cannot resort to some type of daily medication for healthy survival. Still, with mounting healthcare costs comes the worry of prolonging such costs often, where an insurance plan comes into role. 

Keeping the necessities of these workers, the Indian government launched the ESI scheme to sustain them during medical emergencies.

What is the Employee State Insurance Scheme ?

A multidimensional societal security scheme, the Employee State Insurance scheme intends to tender socio-economic security to the people employed in the organised sector and their dependent members. In this insurance scheme, individuals can gain financial assistance during medical emergencies owing to occupational hazards, sickness, and maternity. 

The corporate body accountable for managing this integrated program is the Employee State Insurance Corporation (ESIC). This scheme is imposed under the Employees State Insurance Act, whereby every employer must guarantee a new employee’s enrolment under this program.

The Employee State Insurance Act

 The Parliament of India commenced the Employees State Insurance Act in 1948 and first began it in 1952 in Delhi and Kanpur, covering roughly 1.20 lakh employees. After this primary execution, the state governments took up this scheme to comprise more parts in numerous phases. 

This Act characterises several terms and conditions related to the scheme’s legitimacy, counting insured employees’ eligibility and duties and responsibilities of the Employees’ State Insurance Corporation (ESIC). 

Features of ESIC 

• The Employee State Insurance Scheme endeavours at providing exposure to all workers with a monthly reimbursement of less than or equal to Rs.21000. 
• The insurer and their dependent members can gain healthcare benefits aligned with specific illnesses. 
• The present rate of contribution for employers is 3.25%, and for employees, it is 0.75% of the wages payable. The government decreased the total contribution from 6.5% to 4% in 2019. 
• Employers should clear any outstanding contribution within 21 days of the month.
• State governments should pay 1/8th of the entire medical expenses up to Rs.1500 per head according to the ESI scheme.
• The scheme will continue tendering advantages to insured individuals even after picking premature retirement or those under the VHS scheme. Even an unemployed person can continue gaining from the scheme for up to 3 years. Nevertheless, they need to present their retrenchment letter and all details concerning their last workplace.
• The scheme promotes opening more medical colleges to help develop the value of healthcare individuals.
• This scheme comprises accidents encountered whilst commuting under industrial hazards.
• Women employees can gain special benefits in case of pregnancy-related problems. They can extend their maternity leave of 26 weeks by up to 1 month without distressing their wage slab.

Benefits of ESIC

• Sickness benefits

Insured employees can avail cash reimbursement worth 70% of their wages for periods of certified illness, applicable up to 91 days per year. To assert such benefits, individuals must contribute for no less than 78 days during a contribution period. Persons with long-term illnesses can enjoy greater compensation rates of 80% for up to 2 years as per expanded sickness benefits of the Employees State Insurance Act 1948.

• Medical benefits

The insured and his/her dependent family members can enjoy absolute medical and surgical care as per this scheme, counting doctor consultation, medication, and ambulance services. The scheme does not stipulate any maximum limit for such expenditures.

• Disablement (temporary and permanent) benefits

Insured workers can enjoy 90% of their wages as reimbursement if they face brief disability from an employment injury. This benefit is permissible from day 1 of employment, even though the individual has paid any contribution or not. Compensation is granted for the complete period of loss of earning capacity, provided the disability sustains for more than 3 days following the date of the accident.

• Maternity benefits

Women employees can assert cash benefits if any health difficulties occur due to pregnancy, miscarriage, medical termination of pregnancy, premature birth, or imprisonment. The highest period for compensation differs between 6-12 months, depending on the kind of medical requirement, and can be expanded by another 1 month.

• Death benefits

If an insured employee dies from an occupational hazard, his dependent family members can get a monthly compensation worth 90% of the late individual’s salary. Whilst dependent spouses and parents can avail of these benefits until death, dependent children can gain from 25 years of age.

• Funeral expenses

If one is a dependent family member, he/she can claim up to Rs.10000 to complete the final rites of the deceased individual.

• Post-retirement benefits

If an individual has been covered under employee state insurance for, in any case, 5 years, he/she and the spouse can continue availing of medical benefits even after retirement.

• Provision for unemployed individuals

Suppose an individual gets unemployed due to a decrease, the closing of the workplace, or enduring disability, after having been an insured employee for no less than 3 years. In that case, he/she can still avail specific benefits under the Rajiv Gandhi Shramik Kalyan Yojana. These benefits comprise medical care and unemployment grants worth 50% of the pay for up to 1 year. Unemployed beneficiaries can also assert cash compensation under the Atal Beemit Vyakti Kalyan Yojana. Policyholders will obtain 25% of their monthly wages for three months as Section 2(9) of the ESI Act.

In addition to the above advantages of the ESI scheme, individuals can also enjoy compensation of up to Rs.5000 if detained in any place other than ESI hospitals/dispensaries. Nevertheless, such claims are just allowable up to 2 times.

Conclusion

When the industry was still in its budding phase, the people of India were still profoundly reliant on a large range of imported goods and services. These goods and services were rendered by either the developed or developing parts of the world. Consequently, India, a self-dependent country, initiated an expansion of the working class sector to guarantee that manufacturing and labour jobs stayed. The Employee State Insurance Corporation Scheme serves its member’s financial security in a premature health-related possibility. The scheme tenders medical benefits, disability benefits, maternity benefits, unemployment grants, etc.