Employee State Insurance Scheme (ESIS)

Operated by the Employees State Insurance Corporation, the Employee State Insurance Scheme is a social security and health insurance fund. This scheme offers a wide range of benefits, including a 26-week maternity cover, staggered payments in the event of an unfortunate incident, and unemployment coverage for 3 years, to name a few. This scheme also offers sickness benefits and disablement benefits.

Employee State Insurance Act, 1948

ESIS was established with the aim to offer social insurance to individuals, according to the provisions of the Employees State Insurance Act. The primary objective of the act was to financially safeguard salaried employees and their family members from unforeseen medical issues, temporary and personal disablement, maternity, and death.

 

In simple words, ESIS offers medical security to insured people and their loved ones under unavoidable health issues. This scheme applies to factories, shops, restaurants, hotels, and other business entities such as road transport, newspaper, cinemas, and educational institutions with more than 10 employees earning a minimum of Rs. 15,000.

 

 In certain states, this facility applies to the institutes that have more than 20 employees. Also, ESIS authorities have decided to increase the monthly wage amount from Rs. 15,000 to Rs. 21,000, and the benefits are extended to people working in construction sites that are located in ESIS-mentioned areas since August 01, 2015. 

 

As mentioned above, the employer, as well as the employee, contributes towards the ESIS. However, employees earning Rs. 137 or less as a daily wage, are exempted from the contribution. In this case, only the employer makes the necessary contribution.

Features of ESI Scheme

ESIS provides employees with a varied range of features. You can go through the list of features of ESIS mentioned below in detail:

 

• It provides maternity cover for 26 weeks. Moreover, the cover can be extended up to one month if your wages are subjected to a contribution of 70 days.

• It offers payment in instalments to beneficiaries during unfortunate events.

• It offers unemployed member coverage for 3 years. However, it is possible only if the member discloses essential details like the previous workplace and permanent invalidity.

• It supplies 90% of the employee’s wage when an individual becomes temporarily or permanently disabled.

• Complete medical care and attention are provided to an employee registered under the ESI Act, 1948 at the time of their incapacity and restoration of health.

The significant benefit of availing of ESIS is the financial protection for the employee and their dependents. Besides, ESIS grants other health insurance for the betterment of each employee. 

Benefits of ESI Scheme

• Unemployment Allowance - 

If you, as an employee, are fired from your previous job or choose to resign from your last position, the flow of your income reduces. ESIS acts as an income replacement when you are unemployed.

• Death Benefit - 

The financial security of your family is at stake after your death. However, ESIS ensures that your family receives a monthly payout in your absence.

• Maternity Benefit -

 Having a child marks the beginning of a new phase of life. With that, your responsibilities, as well as expenses increase. ESIS provides maternity benefits to every new parent.

• Medical Benefit - 

When you enter insurable employment, ESIS serves medical coverage for you and your entire family. The Government of India recently launched the Ayushman Bharat Yojana to facilitate quality healthcare services to the below-poverty line segment of society. For Ayushman Bharat Yojana registration and eligibility check, you can head to the official website of  PMJAY.

• Sickness Benefit - 

You get cash benefits of up to 70% of the wages during the medical leave. This is provided for up to 91 days.

• Benefits for the dependents - 

If you happen to suffer any health issues or injuries when at work, you do not have to worry about the financial crisis arising due to loss of pay. With ESIS, you and your dependents will get monthly payments.

• Disablement Benefit - 

For temporary disablement, ESIS provides monthly payments at a 90% wage until recovery. For permanent disability, ESIS provides monthly payments at a 90% wage for the entire life.

Cash Benefits of ESI Scheme

There is an increasing demand for ESIS since its launch in 1952. The prime reason for the growth of ESIS insurance is the fulfilment of the social needs of all employees.

What is Covered in ESI Scheme

The ESIS covers a majority of employed Indian residents. However, before enrolling on the plan, one must take a look at its inclusions. Here’s a closer look at what is covered under ESIS.

 

• The scheme is now extended to cinemas and preview theatres, restaurants, newspaper establishments, hotels, shops and road-motor transport undertakings.

• Private educational and medical institutions with 10 or more employees. However, you should note that this is applicable to certain selected states and union territories only.

• It is accessible to over 3.49 crore Indian families and individuals as of March 2021.

• According to Section 1(5), the government has notified that ESIS insurance covers shops and restaurants involved in sales.

What is Not Covered in ESI Scheme

One must be aware of the exclusions under the ESIS scheme -

 

• The employee state insurance scheme does not offer coverage to employees with a monthly income of Rs. 21,000 or above.

• ESIS does not offer coverage to disabled individuals earning a monthly income of Rs. 25,000 or above.

• States like Chandigarh and Maharashtra offer ESIS scheme coverage to a maximum of 20 employees, while the rest states and Union Territories offer coverage to a maximum of 10 employees.

Contribution Rates

Here are the contribution rates of the employers and the employees:

Contribution Period

Here’s a table that represents the contribution period:

When is the ESI Scheme Registration Required and What’s the Procedure

For companies that have more than 10 employees, it becomes mandatory to register with the Employee State Insurance Corporation (ESIC). Also, employees earning less than Rs. 21,000 every month will contribute 1.75% of their salary towards the ESIS, whereas the employer will contribute 4.75% towards the same. This makes a total contribution of 6.5% towards ESS. The company has to register with ESIC within 15 days of its eligibility.

 

When an organisation hires 10 or more employees, it is liable for the company to register under the ESIS. As mentioned above, employees earning less than Rs. 21,000 monthly need to contribute 1.75% of their wage to ESIS, while the employer needs to contribute 4.75% of the employee’s wage. The organisation needs to register for ESIS within 15 days from the time the scheme applies to the company.

The procedures to register for ESIS are explained below:

 

• Step 1: Download Form No.1 (Employers Registration Form) in the PDF format and fill in the necessary details.

• Step 2: Submit the same online with the requested documents. Documentation plays an essential role while enrolling for a policy.

Steps to Login to the ESIC Portal

Follow these steps to login to the ESIC Portal:

1. Navigate to the online portal: https://www.esic.in/

2. Click on the tab ‘Employee/Insured Login’

3. Enter your ID, password, and the given captcha

That’s it! You’re now logged in to the online portal of ESIC.

Who is Eligible for the ESI Scheme

To avail of the benefits offered under the Employee State Insurance Scheme, you should meet certain criteria set by the committee. Those eligible for ESI Scheme:

 

• Have to be employed in a non-seasonal factory that has more than 10 employees working for it. This eligibility criterion is applicable under Section 2(12) of the Act.

• Need to have a wage limit of Rs. 21,000 per month, effective from January 01, 2017.

Documents Required for ESI Scheme

Certificate of registration from the Factories Act and Establishment Act.

 

• Memorandum and Articles of Association

• Registration certificate for a partnership entity

• Employee list of an organisation

• Annual Income details

• Cancelled bank leaf

• Names of the company directors

• Names of the company shareholders

• Attendance account of the employee

ESI Scheme and its Application

The Employees State Insurance Corporation (ESIC) established the Employees’ State Insurance Act, 1948. It is their responsibility to ensure the seamless administration of the scheme.

 

The ESIS has its headquarters in New Delhi but has an extended network across the country. Today, over 151 hospitals and 42 hospital annexes are available for inpatient services under the scheme. Other primary and outpatient medical facilities are offered via a network of about 1450/188 ESI dispensaries/AYUSH units and 954-panel clinics. Also, there is a Medical Benefit Council offering expert guidance to the ESIC regarding its administrative responsibilities.

Dos and Don’ts of ESI Scheme

As a beneficiary of ESI, you should be aware of the following important dos and don’ts:

 

• If you are switching from one organisation to another, make sure that your new employer is informed about the ESI Registration Number. That way, you can continue to enjoy the benefits under it as and when needed.

• Ensure that you do not lose or damage the Pehchan Card as it serves the purpose of social security.

• In case the card is lost, you or any of your dependents will have to immediately report the loss at the nearest Branch Office or Dispensary.

• The suggested processes for referrals should be strictly followed.

• In case you plan to relocate for professional purposes, you have to get Form 105 signed by your existing employer to continue availing the benefits under the ESI scheme in another location.

• You have to mandatorily follow the doctors’ medications and prescribed treatments (if any).

Redressal of Public Grievances

You can lodge your complaint regarding the ESI scheme by using any of the following methods:

 

• By going to the official ESIC website at 222.esic.nic.in and selecting the ‘Grievance Redressal’ option in the ‘Services’ section on the homepage.

• By using the CPGRAMS portal at https://pgportal.gov.in/signin

• By sending an e-mail to pg-hqrs@esic.in or by using any Hqrs office or field office’s email address.

• Through toll-free helpline numbers: 1800-11-2526 (general Helpline) and 1800-11-3839 (medical helpline).

• Through hard copy complaints like by post, by hand, through complaint box, etc.

• By walking into the respective field’s office or headquarter office.

Employee State Insurance Scheme - Claim Settlement Process

Follow these steps to enjoy a hassle-free ESIS claim settlement process:

 

• Download the UMANG app on your smartphone

• Login to your account using the ESIS scheme number or IP number

• Generate OTP and enter it

• Under the ‘Services’ menu, select ‘Make a Claim ’

• Enter mandatory details and attach necessary documents to the claim request

• Once the claim request is submitted, the concerned executive will connect with you on your registered contact details.

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