A working professional has tons of responsibilities on his shoulders. Apart from his work duties, he has to protect the financial needs of his family as well. There are times when his income doesn’t cover the budgetary requirements of his loved ones.
A great way to ensure the security of the entire family in your absence is by enrolling for an Employee State Insurance Scheme (ESIS). With ESIS, one can safeguard the social security of an employee.
An ESIS is a broad plan, which covers multiple things under it. Before applying for ESIS insurance, every employee must know everything about the scheme. Let’s begin by understanding what ESIS is:
ESIS was introduced on February 24, 1952, by the then government in Kanpur. After the Kanpur launch, it was introduced in Delhi. The coverage offered at both these centers, Kanpur and Delhi, was for 1,20,000 employees. During that period, the first person to be insured under the scheme was the then Prime Minister of India.
Employee State Insurance Scheme is an integrated social system specially designed for the safety of the employees under the Employee State Insurance Act, 1948. ESIS insurance protects the employee in the case of sickness, disability, physical injury, and more. Moreover, it provides the working individual and his beneficiaries with medical facilities. In case an employee loses his steady flow of income, the ESIS card helps in availing cashless benefits.
The PMJAY Scheme is formed by subsuming multiple schemes including the Employee State Insurance Scheme (ESIS)
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 a maternity cover for 26 weeks. Moreover, the cover can be extended up to one month if your wages are subjected to a contribution for 70 days.
It offers beneficiaries with payment in installments during unfortunate events.
It avails an unemployed member with a coverage till 3 years. However, it is possible only if he 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.
The significant benefit of availing ESIS is the financial protection to the employee and his dependents. Besides, ESIS grants other health insurance benefits for the betterment of each employee. Take a look at the benefits of ESIS Plan mentioned below:
Unemployment allowance: When an employee is fired from his previous job, or he chooses to resign from his last position, the flow of his income reduces. ESIS acts as an income replacement when he is 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 employees with medical coverage for him and his entire family. The government of India recently launched the Ayushman Bharat Yojana to facilitate quality healthcare services to the below poverty line segment of the society. For Ayushman Bharat Yojana registration and eligibility check, you can head to the official PMJAY website.
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 disablement, ESIS provides monthly payments at a 90% wage for the entire life.
The ESIS covers a majority of employed Indian residents. However, before enrolling for the plan, one must take a look at its inclusions. Here’s a closer look at what is covered under the ESIS.
After the launch of the scheme in Kanpur and Delhi, it has been adopted by multiple cities of India.
Today, the plan is present in more than 843 centers in 33 union territories and the state of India.
It is accessible to over 2.13 Indian families and individuals.
It has been adopted by more than 7.83 factories.
According to Section 1(5), the government has notified that ESIS insurance covers shops and restaurants involved in sales.
There is an increasing demand for ESIS after its launch in the year 1952. The prime reason for the growth of ESIS insurance is the fulfillment of the social needs of all the employees. Take a look at the infrastructure of the ESIS.
It is available in 151 hospitals and 42 hospital annexes for managing in-patient services.
It has formed alliances with 954-panel clinics, 1450/188 ESI dispensaries, or AYUSH units.
It has set 5 centers in Mumbai, Chennai, Kolkata, New Delhi, and Indore to cure occupational diseases caused in hazardous industries.
It has a network of more than 628/185 branch offices and pays office. Moreover, the functioning is managed by 62 regional or divisional offices.
Documentation plays an essential role while enrolling for a policy. An employee must submit the relevant documents. Here’s a list of the required documents.
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 organization
Annual Income details
Canceled bank leaf
Names of the company directors
Names of the company shareholders
Attendance account of the employees
The ESIS is composed of the following things mentioned below. Take a look.
Director-General of the ESIS
Chairman elected by the Government of India
Vice President appointed the Government of India
5 nominated individuals by the Government of India
1 elected representatives by the Government of India for each Indian state
1 elected representatives by the Government of India for each Indian Union Territory
10 elected representatives by the Government of India for employers
10 elected representatives by the Government of India for employees
2 elected representatives by the Government of India from the medical field
3 members of the parliament: 2 from Lok Sabha and 1 from Rajya Sabha
ESIS was established with an 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 the 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 the insured people and their loved ones under unavoidable health issues. This scheme applies to employees of factories, shops, restaurants, hotels, and other business entities such as road transport, newspaper, cinemas, and educational institutions that have more than 10 employees earning a minimum of INR 15,000.
In certain states, this facility applies to institutes that have more than 20 employees. Also, ESIS authorities have decided to increase the monthly wage amount from INR 15,000 to INR 21,000, and the benefits are extended to people working in construction sites that are located in ESIS mentioned areas since August 01, 2015.
The employer, as well as the employee, contributes towards the ESIS. The employer contributes 4.75% of the employee’s wage, while the employee contributes 1.75% of their wage. For employees earning INR 137 or less as a daily wage, are exempted from the contribution. In this case, only the employer makes the necessary contribution.
When an organisation hires 10 or more employees, it is liable for the company to register under ESIS. For employees earning less than INR 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 -
Down the Form No.1 (Employers Registration Form) in PDF and fill the necessary details.
Submit the same online with requested documents (as mentioned above).
In fact, the unawareness of the scheme leads to multiple queries in the minds of the buyers. Some frequently asked questions (FAQs) about this scheme are mentioned below.
The Employee State Insurance (ESI) Act covers the administrative duties of a statutory body called Employee State Insurance Corporation (ESIC).
The age limit for every benefit provided by the ESIC Scheme is different.
ESI Code number is a 17-digit number given to every employer. It is usually provided to an employee who owns business entities and is registered under this act.
Follow the steps given below to register: • Download Form No 1, which is an employer’s registration form. • Fill the required details • Submit the form along with the relevant documents online.
Every employer eligible under this act must compulsorily register for the ESIS scheme.
To sum up, the responsibilities of an employee increases with a rise in his workload. Moreover, our sedentary lifestyle demands special attention, which is possible only with ESIS Scheme. The guaranteed protection from ESIS Scheme makes multiple lives easier. Health insurance is a right and not just a need.
Also read about Ayushman Bharat Yojana (PMJAY Scheme) to know more about government health schemes.