The ESIC scheme is a social security program offering socio-economic protection to organised sector employees. The scheme is administered by the statutory business body Employees’ State Insurance Corporation (ESIC) and it is meant to cover death, disability, maternity, and sickness from work-related accidents for workers.
Who is Eligible for the ESIC Scheme?
Eligibility for the ESIC scheme depends mainly on the employee’s monthly wage ceiling. The monthly wage ceiling for coverage is Rs. 21,00,000. The employer is responsible for enrolling eligible workers into ESIC scheme.
The ESIC applicability criteria are simple: When a worker’s monthly salary is in or near the wage limit, the employer should register their establishment or factory under the ESI Act within fifteen days of its publication. Failing to do this might lead to legal consequences under Section 46 of the Act.
Contributions & Funding under ESI Act
The ESIC scheme is a self funded programme financed mainly by employer and worker contributions. The contributions are based on the workers’ earning capability as a proportion of the salary though they’re given social security benefits based on individual demand with no discrimination.
The contribution structure is the following:
– Employer contribution: 3.25% of the worker’s earnings (up to the salary ceiling)
– Contribution of employee: 0.75% of their wage (up to wage ceiling).
State governments also pay 1 / 8th of the expenses for medical benefits under the scheme.
Benefits Offered by the ESIC Scheme
The ESIC benefits provide medical and financial assistance for life events and contingencies.
1. Medical Benefit
When an insured individual starts insurable employment, they and their family get complete ESIC medical benefits. The amount spent on treatment has no limit. Also covered are retired and permanently disabled covered persons and their spouses who pay a premium of Rs. 120.
2. Sickness Benefit
In the event of certified Sickness, insured workers get sickness benefits in the form of cash compensation equal to 70% of wages up to 91 days each year. For sickness – related ESI benefits the insured worker must have contributed for a minimum of 78 days during a six-month period.
3. Maternity Benefit (MB)
Maternity Benefit is paid for 26 weeks with one month extension on health-related advice at full salary rate. For this benefit to apply, the insured worker must have contributed for more than seventy days in the two last contribution periods.
4. Disablement Benefit
The ESIC scheme offers two forms of disablement benefit:
- Temporary Disablement Benefit (TDB): From the first day of insurable employment and with no regard to any contribution if the employment injury occurs, Temporary Disablement Benefit is payable at 90% of wages during the disability period.
- Permanent Disablement Benefit (PDB): This particular benefit is paid out monthly at a rate of 90% of earnings, dependent on the degree of earning capacity loss accredited by a Medical Board.
5. Dependents’ Benefit
In the event an insured individual dies because of a work related injury or occupational danger, their dependents get a payment amount the same as 90% of the wage of the deceased. It is called a Dependents’ Benefit.
6. Other Benefits
The ESIC scheme also offers the following benefits supplementary to the above mentioned:
- Funeral Expenses: From the first day of insurable work, Rs. 15,000 goes to dependents or the individual who does the last rites.
- Confinement Expenses: An insured female or insured person in respect of their wife is entitled to confinement expenses in case of confinement in an area where appropriate health services aren’t available under the ESIC scheme.
ESI Benefits Eligibility
One feature of the ESIC scheme is that a worker keeps their insurance number so long as they stay within the ESIC wage limit. An employee’s insurance status and insurance number won’t change due to changing jobs. This provides coverage and access to ESI benefits for life while they are employed.
Conclusion
The Employees’ State Insurance Scheme of India is a social security program for employees in the organised sector. The ESIC scheme aims at socio-economic protection of workers and their families. The scheme with its self-funding model and inclusive eligibility criteria shows that India is dedicated to its workforce well-being.
FAQs
1. What is the ESIC Scheme & how does it work?
The ESI scheme is a social security scheme that focuses on socio-economic protection of employees in the organised sector of India. These contributions generally cover the benefits to insured employees and their families, which includes medical expenses, maternity benefits, sickness benefits, disability benefits and dependants’ benefits.
2. Who is entitled to ESIC Scheme benefits?
For those sets of employees whose monthly income is within Rs. 21,000 (as of 1 January 2024) , they are eligible for coverage through the ESIC Scheme. It’s the employer’s duty to register the factory/establishment under the ESI Act and enlist qualified personnel in the scheme.
3. What benefits does the ESIC Scheme give to eligible employees?
ESIC Scheme benefits eligible employees and their families:
- Medical Benefit: Complete medical care for the insured person & family starting on the day of insurable employment.
- Sickness Benefit: Cash compensation as much as 91 days per year during certified sickness periods (70% of wages).
- Funeral Expenses: One lump sum of Rs. 15,000 to funeral costs.
- Confinement Expenses: Costs of confinement in locations where ESIC medical services are unavailable, etc. among other expenses.
4. How can employers register ESIC Scheme employees?
It’s the employer’s sole responsibility under Section 2A of the ESI Act & Regulation 10 B to register the factory or establishment under the ESI Act within fifteen days of its introduction to them. Failing to do this can have legal consequences.
5. Can employees keep ESIC benefits when jobs or locations change?
Yes, an employee’s insurance number is still the same as long as they stay in the ESIC salary limit. They won’t lose their insurance status by switching jobs or locations, and their insurance number will stay unchanged. This offers continuity of coverage and ESIC benefits throughout their employment journey.
