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ESI Scheme- Employees Prospective

ESIC scheme was inaugurated in Kanpur on 24th February 1952 (ESIC Day) by then Prime Minister Pandit Jawahar Lal Nehru. ESIC scheme was simultaneously launched at Delhi as well and the initial coverage for both the centers was 1,20,000 employees. Our first Prime Minister was the first honorary insured person of the Scheme. The Employees’ State Insurance Scheme of India (ESIC) is a multi-faceted Social Security Scheme designed to provide socio-economic protection to ’employees’ in the organized sector. ESIC Scheme is administered by a statutory corporate body called the Employees’ State Insurance Corporation (ESIC). ESIC Act, 1948 is designed to complete the task of protecting “Employees” as defined in the ESI Act – 1948, against the hazards of Sickness, Maternity, Disablement or Death due to Employment injury and to provide full medical care to insured persons and their families. The ESI Scheme applies to factories and other establishment’s viz. Road Transport, Hotels, Restaurants, Cinemas, Newspaper, Shops, and Educational/Medical Institutions wherein 10 or more persons are employed. However, in some States threshold limit for coverage of establishments is still 20. Employees of the aforesaid categories of factories and establishments, drawing wages upto Rs.21,000/- a month, are entitled to social security cover under the ESI Act. The company contributes 3.25 percent and the employee contributes 0.75 percent for all employees earning Rs 21,000 or less per month in salary, for a total share of 4 percent. As per the data available on ESIC website, ESI Scheme is now notified 595 Districts in 35 States and Union Territories (except Lakshadweep Island), which include 441 fully notified districts and 154 partially notified districts where scheme is notified in Districts Headquarters Area & in Prominent Industrial Centers Under Section 1(3) of ESI Act, 1948. The Scheme is yet to be notified in 148 districts. 14.32 lakhs employers and 2.46 Cr employees covered under the scheme as on 31st of March, 2021. The promulgation of Employees’ State Insurance Act, 1948 (ESI Act), by the Parliament was the first major legislation on social Security for workers in independent India. ESIC scheme has been gaining its relevance since it’s inception. Even after 75 years of growth, development, empowerment and modernization of the country and its economy, ESI Act is the most relevant legislation to ensure protection from sickness, maternity, disablement and death due to employment injury and to provide medical care to the employees of organized sector and their family.

The section 46 of the Act envisages following six social security benefits:

  1. Medical Benefit: From the moment an insured person starts insurable employment, he and his family receive full medical care. There is no limit on how much an Insured Person or a family member can spend on treatment. On payment of a nominal annual premium of Rs 120/-, medical care is also provided to retired and permanently disabled covered persons and their spouses.
  2. On payment of Rs.10/- P.M. in lump sum for one year in advance, Medical Benefit can be provided (under Section 56 of the Act) to:
    1. An Insured Person and his or her spouse who leaves insurable employment on attaining the age of superannuation after being insured for not less than five years, till the period for which contribution is paid.
    1. An Insured Person and his/her spouse who ceases to be in insurable employment on account of permanent disablement due to employment injury shall be entitled to medical benefit.
  3. An Insured Person and his family members are entitled to free medical attendance by IMO/IMP at their residence when the condition of the patient is such that he/she cannot reasonably be expected to attend the dispensary/clinic.
  4. The standard of Medical Care under the E.S.I. Scheme provides for specialist consultation to IP in all cases and to members of their families in areas with “Expanded” and “Full” Medical Care. Arrangements for specialist consultation may be provided at Specialist/Diagnostic Centers, E.S.I. Hospitals or at such other institutions by appointing Specialists/Super Specialists on full time/part-time basis where suitable arrangements exist.
  5. IPs in all areas and their family members in areas with “Full” medical care facility are entitled to hospitalization.
  6. Imaging and investigations including CT Scan, MRI, Echocardiography and laboratory facilities are provided free of cost to IPs and their families at state level specialty hospitals or other institutions having tie up with E.S.I. Scheme.
  7. Insured Persons and their family members are provided prescribed artificial limbs, aids and appliances as part of medical care under the E.S.I. Scheme.
  8. Every employer has to arrange for First-aid medical care and transport of accident cases till the injured IP is seen by the IMO/IMP and such employer is entitled to reimbursement of expenses incurred in this regard upto the maximum of scale prescribed from time to time. However, reimbursement is not permissible, if the employer is required to provide such medical aid free of charge under any other enactment.
  9. Claims for reimbursement of expenses incurred in respect of medical treatment of IP and his family may be accepted in circumstances and subject to such conditions as the Corporation may by general or special order specify.
  • Sickness Benefit (SB): During periods of certified sickness for a maximum of 91 days per year, insured workers are entitled to Sickness Benefit in the form of cash compensation at the rate of 70% of salaries. To be eligible for illness benefits, the insured worker must contribute for 78 days during the course of a 6-month period.
    • Extended Sickness Benefit (ESB): SB extendable upto two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages.
    • Enhanced Sickness Benefit: Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively.
  • Maternity Benefit (MB): Maternity Benefit for confinement/pregnancy is payable for Twenty-Six (26) weeks, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding Two Contribution Periods.
  • Disablement Benefit:
    • Temporary disablement benefit (TDB): From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
    • Permanent disablement benefit (PDB): The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board
  • Dependent’s Benefit (DB): DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased Insured person in cases where death occurs due to employment injury or occupational hazards.

Dependant” means any of the following relatives of a deceased insured person, namely: —

  • A widow, a legitimate or adopted son who has not attained the age of twenty-five years, an unmarried legitimate or adopted daughter;  
  • A widowed mother
  • If wholly dependent on the earnings of the insured person at the time of his death, a legitimate or adopted son or daughter who has attained the age of twenty-fiveand who is infirm;
  • If wholly or in part dependent on the earnings of the insured person at the time of his death,
    • A parent other than a widowed mother,
    • A minor illegitimate son, an unmarried illegitimate daughter or a daughter legitimate or adopted or illegitimate if married and a minor or if widowed and a minor,
    • A minor brother or an unmarried sister or a widowed sister if a minor,
    • A widowed daughter-in-law,
    • A minor child of a pre-deceased son,
    • A minor child of a pre-deceased daughter where no parent of the child is alive, or
    • A paternal grand-parent if no parent of the insured person is alive
  • Other Benefits:
    • Funeral Expenses: An amount of Rs.15,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
    • Confinement Expenses: An Insured Women or an I.P.in respect of his wife in case confinement occurs at a place where necessary medical facilities under ESI Scheme are not available.

In addition, the scheme also provides some other need based benefits to insured workers.

  • Vocational Rehabilitation: To permanently disabled Insured Person for undergoing VR Training at VRS.
  • Physical Rehabilitation: In case of physical disablement due to employment injury.
  • Old Age Medical Care: For Insured Person retiring on attaining the age of superannuation or under VRS/ERS and person having to leave service due to permanent disability insured person & spouse on payment of Rs. 120/- per annum.

Rajiv Gandhi Shramik Kalyan Yojana:

This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An Insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity are entitled to: –

  • Unemployment Allowance equal to 50% of wage for a maximum period of upto Two Years.
  • Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
  • Vocational Training provided for upgrading skills – Expenditure on fee/travelling allowance borne by ESIC.

Incentive to employers in the Private Sector for providing regular employment to the persons with disability:

  • Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is 25,000/-.
  • Employers’ contribution is paid by the Central Government for 3 years.

ESI Act, 1948 is now merged in new The Code on Social Security, 2020 which is yet to be enforced. 

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