Employees’ State Insurance (ESI) scheme or ESI is a contributory self-financed, healthcare insurance scheme wherein contributions are made by both the employer and employee. ESI schemes are regulated by the ESI Act and governed by the ESIC which is a govt social security, labour welfare organisation. 

ESI scheme protects the employees in case of a medical emergency, for example, ailment, maternity, demise or disablement because of work damage and work-related ailment. The ESI scheme provides the facility to gain access to medical treatment, medicinal amenities, monetary compensation and other support for guaranteed people.

In addition, the Employees State Insurance Scheme likewise offers multiple financial benefits as annuity prevalently known as a dependent benefit. This can also be claimed by the family members dependent on the person who is insured, in case of death due to mishaps caused at the working environment (enterprises) or if an employee had confronted risky circumstance on duty.

 Headquartered in New Delhi, Employee State Insurance Corporation has a broad network all over India. At present, there are 151 clinics and 42 hospitals for inpatient services. Primary and out-patient health check services are provided through a network of about 1450/188 ESI dispensaries, and 954 board clinics.

When is ESI registration required?

If an organization has at least 10 working personnel, it is compulsory for that organization or to be registered with the ESIC. A worker whose monthly salary is under Rs.21, 000 contributes 1.75% of his or her pay towards the ESI while the employer pays 4.75% towards the ESI making an aggregate of 6.5%. The organization or foundation can apply for an ESI registration within 15 days from the period the ESI Act is pertinent to that organization or foundation.

What is covered in Employees’ State Insurance Scheme?

The Employees’ State Insurance Scheme was enforced in two Indian cities, Delhi and Kanpur when it was first executed in 1952. From that point forward, the scheme has spread by a wide margin over the entire country. As of now, it is available in more than 843 centres in 33 States and Union Territories. The ESI Act has now been approved by more than 7.83 lakhs manufacturing plants and foundations and has a stretch of over 2.13 crore insured people and families. It holds a record of over 8.28 crore recipients.

Documents necessary for ESIC registration

•       Registration certificate under the Factories Act or Shops & Establishment act
•       Articles of a union of the company and letter of association
•       Certificate of registration for a company/joint venture legal document for a partnership institution
•       A comprehensive list of all employees working in an establishment
•       PAN Card of the corporation as well as that of the individuals working there
•       A complete list of the names of directors of the organisation
•       Information on a yearly income of all the workforce
•       A cancelled cheque of the bank account of the organisation
•       Record of all the shareholders
•       Full attendance of all the workforce
  
  

Benefits offered by ESI

As per Section 46 of the ESIC Act, the following are the social security benefits offered to employees who fall under the ESIC category:

Medical Benefits: ESI scheme offers full medical health care for the insured individual as soon as he enters into employment. This advantage reaches out up to a limit of 70% of the employees’ salary for a period of 91 days. So as to fit the bill for this advantage the insured employee is required to contribute for 78 days in a commitment time of a half year.

Maternity Benefit: Maternity benefits are payable for up to a period of 26 weeks and is extendible further by one month on a medical recommendation at the rate of full compensation. This is subject to contribution for 70 days in the first two contribution periods. Miscarriage or medical termination of pregnancy is payable for 26 weeks from the date of miscarriage. 

Sickness benefit: ESIS provides financial assistance at the time of medical leave up to 70% of the income. This advantage is given as long as 91 days. In order to qualify for sickness benefit, the employee is required to contribute for 78 days in a contribution period of 6 months. 

Benefit for dependents: In the event that an employee dies caused by injury during work or by occupation hazards, the dependents of the deceased are paid 90% of the wages in the form of monthly payment. 

Benefit for unemployment: In any case the insured employee becomes jobless in the wake of being guaranteed for at least three years, by virtue of conclusion of plant/company, reduction of expenditure or shortcoming, a regularly scheduled instalment equivalent to half of the compensation in cash is offered by ESI for a period of 2 years.

Benefit for disablement: If there should be an occurrence of transitory disablement, ESI scheme offers instalment every month at the rate of 90% of the payment for impermanent disablement till the time the damage is mended. If there should be an occurrence of changeless disablement, ESI scheme offers regularly scheduled instalments at the rate of 90% of compensation consistently for the whole life (entire life).

Also read: Everything an employer needs to know: PF, ESI, Bonus & Gratuity

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