Understanding the ESIC Scheme and its Benefits

Ashish M. Shaji

10 May, 2021

The employee state insurance scheme is a social security scheme under the aegis of Employees’ State Insurance Corporation, a division of the Labour and Employment Ministry, Government of India. This scheme provides sickness benefits primarily and also some other benefits to close to 130 million Indians that include insured employees as well as their dependents. In this article, we shall discuss everything about the ESIC scheme and its benefits.

Introduction- ESIC Scheme

This scheme was started in the year 1952. It was a historical decision of the parliament as industrialization in India was in its early stages, and only a few of the manufacturing industries required human capital. The legislation came at a point when the economic situation of the country was at a decline. Therefore developing a multi-dimensional social security system to protect the interests of the working class with statutory provisions was marked as an unprecedented move.

Applicability and Coverage of the ESIC Scheme

This scheme extends to the entire India and covers places of business registered under Factories Act or under Shops and Establishment Act, where 10 or more employees work.

An employee should be mandatorily covered by his employer as long as such employee is within the threshold limit of wages that means all employees whose monthly wages is up to or equal to 21 thousand rupees per month. The employer should get eligible employees covered under this scheme.

The monthly salary limit for coverage under this scheme for employees with disability is 25 thousand rupees per month. The subscriber base has been increasing rapidly as every month large number of new employees joins the labour market and become a member of this scheme.

Benefits of the ESIC scheme

When an employee is registered under this scheme, several benefits are available to the insured employee for the employee as well as for his family members or dependents. 

In order to make sure that all eligible people get benefits, ESIC issues 2 insurance card known as the Pehchaan Card. One for the employee and the other for the family members so that both can enjoy benefits. 

Now let’s discuss its benefits-

• One of the most significant benefits of ESIC scheme is that no upper limit of expenses is capped and if ESIC hospital lack required medicines, equipment, facilities etc. then the ESIC refers such a patient/employee or affected family member to a private hospital having such facilities and reimburse bills directly to the service provider hospital.
• The scheme provides and protects the insured persons and their spouse for maternity benefits, surgery, hospitalization, disablement, unemployment benefits, injuries caused during the course of employment. Even in case of death of the insured employee, up to 15 thousand rupees is paid to the relative of the deceased employee.
• Medical care is extended to retired as well as to permanently disabled insured persons and their spouses on payment of premium amount of only 120 rupees.
• This scheme seeks to protect the basic right of dignity during unforeseen scenarios to negate physical and financial distress under such contingencies.
• It may be noted that all these benefits are brought to an insured employee and their family members by paying 1% of his monthly wages per month to this scheme.
• Another essential feature of this scheme is that insurance number, once allotted to an employee, is the same as long as the employee is within the wage of limit. It means changing to a new job won’t have any impact on his insurance status, and the insurance number will be the same. 
• In case an insured employee travels and needs medical assistance at any other place apart from his place of work or residence, then he may approach the nearest ESIC hospital.

What are some of the Dos and Don’ts of this scheme?

Some of the things to keep in mind are:

• Pehchaan card is like an employee’s visa to their social security therefore take care of that card;
• In case of loss of such card, report it to the branch office immediately;
• Referral procedures must be taken seriously;
•  Carefully follow the instructions of the doctor;
• The employee or worker should never ever fake injury or sickness to claim benefits. It will have legal consequences;
• The employee or worker should add or remove a family member in their declaration in case of a birth or death, respectively.

What are the future prospects of the ESIC Scheme?

This scheme has been extended to cover shops, restaurants, hotels, newspaper establishments, insurance business, NBFCs, educational institutions, private medical institutions and casual and contract employees of Municipal Corporation under the ESIC Act^[1].

This scheme is now expanding across India, covering more than 500 districts in 34 states and UTs, with a target to reach more than 700 districts by 2021.

The beneficiaries would also be entitled to get facilities from hospitals, health centres and dispensaries empanelled under Ayushman Bharat Scheme of Central Government.

Conclusion

The remarkable features and the data indicate the fact that the ESIC scheme is the best social security scheme not just in India but globally also. It is providing its health safety umbrella to millions of new members since its inception.

Read our article: ESIC – Step By Step ESI Registration Procedure Online in India