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.
Moreover, the government has been taking various initiatives to enhance the coverage of the ESI Scheme. These Reforms have been a part of a series of “2nd Generation Reforms Agenda” known as ‘ESIC-2.0’. It was launched on 20 July 2015 and is going to be implemented within a stipulated time. Health Reforms Agenda of ESIC 2.0 include:
Online Health Record of the ESI Beneficiaries
Special cleanliness drive as part of Swachh Bharat Mission
New Medical Helpline for emergency and seeking guidance from casualty/emergency of ESIC Hospitals
Special OPD for Sr. Citizens and differently-abled persons in ESIC hospitals
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.
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 the Form 105 signed by your existing employer so as 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).
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.
It offers cash benefits, as follows:
Sickness benefits – wherein you receive 70% of the wage for 91 days.
Disablement benefit – For temporary disablement, you will receive 90% of the last wages as long as the disablement lasts. For permanent disablement, you will receive the wages on a pro-rata basis for the rest of your life.
Maternity benefit – wherein you receive 100% of the wage for 12 weeks.
RGSKY for unemployment – wherein you receive 50% of the wage for one year in case of unemployment.
Dependent benefit – wherein you receive 90% of the wages
Funeral expenses are covered (up to INR 10,000).
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 up 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.
To avail the benefits offered under the Employee State Insurance Scheme, you should meet certain criteria set by the committee. For 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.
Will have a wage limit of INR 21,000 per month, effective from January 01, 2017.
For companies that have more than 10 employees, it becomes mandatory to register with the Employee State Insurance Corporation (ESIC). Also, for employees earning less than INR 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 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.
Down the Form No.1 (Employers Registration Form) in PDF and fill the necessary details.
Submit the same online with requested documents. Documentation plays an essential role while enrolling for a policy. 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
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.
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 is a self-financed comprehensive social security initiative that is established to ensure financial protection to the employees eligible under it. It offers medical benefits to the insured individual and their family members in case of certain critical illnesses, death due to physical injuries at the workplace, and temporary/permanent disablements.
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 out-patient 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.
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
There has been a gradual improvement in the ESIC hospitals as they now provide –
Electronic health records
VIBGYOR – Operation Indradhanush
Medical helpline for those in need
Pathological and X-ray in the PPP model
Quality control of medicine and drugs
Inspections of Hon'ble Members of ESIC to ESIC/ESIS hospitals at regular intervals
Queue management, behavioural training of doctors and paramedical staff, Ayush, Yoga, Special Child and Mother Care hospitals, May I Help You service, etc.
ICU, CT, MRI, Dialysis, Cat-labs specialities
Despite all this, there is certain unawareness of the scheme that leads to multiple queries in the minds of the buyers. Some frequently asked questions (FAQs) about this scheme are mentioned below.
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