The ESIC Scheme

THE ESIC SCHEME

The ESIC refers as the employees’ state insurance scheme of India, is a contributory health insurance program for daily wage workers or laborers and their families designed to aid them with financial cover during hospitalization and related emergencies. The statutory body that administers the scheme is the Employees’ State Insurance Corporation, under the Ministry of Labor and Employment, which mandates employers to enroll eligible employees in the ESIC program.

Key Features

The government-backed social security scheme offers health insurance medical benefits to insured members or their dependents during times of sickness, disability, and maternity during the term of the employment. The scheme also covers benefits to the insured at their old-age requiring medical care, as well as to dependents of a deceased member due to employment injury or occupational hazards.

Here’s a walk through of the main features of ESIC.

Account for

  • It is the duty of employers of non-seasonal factories employing 10 (20 in some states) or more employees to enroll workers under the ESIC program. 
  • The program is eligible for daily wage workers at industries, factories, transport, construction sites while some states have also extended the program for shops, hotels, restaurants, newspaper establishments, as well as for employees in private and medical institutions.

Investment

  • Employers contribute 3.25% of the employee’s wage, and employees need to contribute 0.75% of their monthly earnings. 
  • The state governments contribute 1/8th of the expenditure of medical benefits within a per capita ceiling of ₹ 1,500 per insured person per annum.
  • The existing wage limit for coverage under the ESIC program is ₹ 21,000 per month, and ₹ 25,000 in the case of persons with disability.

Collection of contribution

  • Employers have to contribute their part as well as deduct eligible employees’ contribution from their wages.
  • These contributions will have to be deposited by employers to the corporation within 15 days of the last day of the calendar month.
  • These deposits can be paid online via the ESIC portal. Nevertheless, the corporation has authorized the State Bank of India (SBI) as well as some other public sector banks to receive the contribution.
Contribution Period Cash Benefit Period
Apr. 1 to Sept. 30                  Jan. 1 to Jun 30 of the following year
Oct. 1 to Mar. 31                  July 1 to Dec. 31of the same year

 

How To Open ESIC Account Online

An employer can register with the ESIC portal (www.esic.in) to set up an ESIC account. The ESIC has put in place an online mechanism for employers and insured members to access their ESIC account. Employees registered with the ESIC can view the financial statement, which are the contributions made by their employer as well as their contribution deducted from the monthly salary during the entirety of his/her employment years. The portal enables employers to file monthly contributions, generate temporary identity cards and create monthly contribution challans online.

An employer has to take up an initiative to open an ESIC account. Here’s the process to follow.

  • Sign-up: An employer can register with the ESIC by creating a new login by submitting their company’s name, employer’s name, state and regional office, email id, and mobile number. The login details and the link are sent to the registered email id.
  • Submit company’s details: The ESIC asks employers to fill up the form containing details of their type of unit (factory or shop/establishment), license number, proprietorship, date of establishment, etc.
  • Submit employees’ details: Name of all the employees should be included as well as their salary, bank details, contact details, etc. After the submission, an insurance number of each employee is created. 
  • Pay initial contribution: An employer can pay online at least six months of their contribution for all employees registered with the ESIC. 
  • Balance check online: A history of all contributions made to an employee’s account can be checked online.

 

Benefits Of ESIC Scheme

According to the ESIC website, these are the benefits that can be availed from the ESI scheme.

Medical Benefit

  • Full medical care to an Insured person and his family members.
  • No upper limit on expenditure on the treatment. 
  • It is extended to retired and permanently disabled insured members and their spouses on payment of ₹ 120 as an annual premium.

Sickness Benefit

  • 70% of wages as cash compensation during the sickness period for a maximum of 91 days per year. 
  • The Insured Person is required to contribute for 78 days in 6 months.
  • The benefit can be extended up to two years in case of 34 malignant and long-term diseases at 80% of wages.
  • Full wage is payable to the insured person undergoing sterilization for family planning from 7 to 14 days for vasectomy and tubectomy respectively.

Maternity Benefit 

  • Maternity benefit during confinement or pregnancy is payable for 26 weeks.
  • It can be extended by one month on medical advice at the rate of full wage. 
  • Insured has to contribute for 70 days in the preceding two contribution periods.

Disablement Benefit

  • Disability benefit at the rate of 90% of wage is payable till disability continues.

Dependents Benefit

  • 90% of the wage is paid monthly to dependents of a deceased insured person due to employment injury or occupational hazards.

Other Benefits

  • Vocational rehabilitation is provided to permanently disabled members undergoing VR training at VRS.
  • Physical rehabilitation is provided in case of physical disability due to employment injury.


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