(Government Healthcare Scheme)
Universal healthcare access, one of the key agendas of Sustainable Development Goals (SDGs), is aimed at enabling people to live healthy and fulfilling lives. The overall global healthcare scenario is no good and at least 50% of the world’s population doesn’t have access to essential healthcare services according to a study. There is an alarming increase in the number of people being pushed into poverty because of high out-of-pocket healthcare expenses worldwide. This is where a government healthcare scheme like ESI (Employees’ State Insurance) becomes significant and important in the context of better healthcare. They protect individuals from falling into the traps of poverty and economic turmoil owing to health problems.
The Employees’ State Insurance (ESI) Scheme is a comprehensive, self-funded, contribution-based Social Insurance initiative, designed for the protection of employees all over the country. It is specifically designed to benefit the employees with monthly wages up to Rs. 21000 (Rs. 25000 in case of employees with disabilities). The scheme with many well-thought-out features provide proper medical care to employees and their families and financial protection against sickness, maternity, disablement, occupational disease, and death due to work injury, among others.
The innovative social insurance scheme is governed by the Employees’ State Insurance Act, 1948. The ESI Scheme is mandatory for all factories, hotels, restaurants, cinemas, newspapers, educational and medical institutions, and other establishments with 10 or more employees.
In some cases, the threshold for coverage is 20 employees or more. The ESI Act, 1948 covered only employees who earned up to Rs. 15000 initially but with the amendment to the Act in 2017, the cap has been increased to Rs. 21000 and Rs. 25000 in case of employees with disabilities.
ESIC or the Employees’ State Insurance Corporation is a social government entity created to ensure social security reaches workers all over the country. It is through this corporation that the ESI Act delivers its social security objectives. The Act was notified by the Parliament in view of the growing concerns of social security and it was the first major legislation extending social security to the workforce in the country. The major objectives of the Act are to protect and uphold human dignity during crisis situations, protecting insured persons and their dependents from social degradation, deprivation, and destitution.
The recent statistics state that over 15.94 lac employers come under the ambit of the ESI Act, 1948 and it covers over 2.78 crore employees and 12.04 beneficiaries.
An insured person under the ESI Act is an employee, present or former, towards whom contributions are payable to ESI. The insured person is the one who is entitled to the benefits provided by the Act. The scheme extends various benefits to the dependents/family of the insured person. All these dependants must also be registered and their Aadhar cards must be linked accordingly.
The ESI scheme, though initially implemented only in the industrial hubs of Kanpur and Delhi till 1952, now has a larger geographic and demographic coverage. The corporation has 843 centres across 33 states and Union Territories with 15.94 employers under its ambit benefiting over 2.78 employees and their families.
The 2017 Amendment provided maternity benefits and the new demographic scheme extended greater benefits and protection to adoptive mothers, surrogate mothers, medical termination of pregnancy, miscarriages, and so on.
The ESI Scheme is self-funded with contributions both from the employers and employees as well. The rate of contribution is fixed and revised from time to time by the government. The employees should contribute 0.75% of the monthly wages and the employer should contribute 3.25% of the gross salary payable to the employee.
The employees registered with ESI and their families will have access to a full range of medical care from day one of the insurable employment. The dependants of deceased insured employees (widows/widowers and dependent children) can avail of these medical benefits. The spouses of insured employees who are retired or not in employment due to permanent disablement too can avail the full range of medical care. Those retired from the service have to pay a sum of Rs. 120 per year to avail these benefits even after retirement.
The insured employees and their families or dependents are covered comprehensively by ESI with a whole range of cash-free healthcare benefits. There is no cap or upper limit on medical expenses, provided they visit an ESI hospital or dispensary. The medical benefits include preventive and curative treatments, hospitalization, imaging, tests, medications, outpatient care, and much more.
ESI provides paid medical leave for employees who have contributed for 78 days. The insured person is eligible for 70% of the average daily wage for a maximum medical leave period of 91 days. The insured person can avail this for two consecutive periods.
ESI provides enhanced sickness benefits to employees who undergo special medical procedures. ESI provides 100% wages for 14 days for those undergoing tubectomy and 7 full-day wages for vasectomy, and these benefits can be extended on medical advice.
Extended sickness benefits are offered for a period of 124 days, extendable up to 2 years, for insured persons suffering from 34 listed long-term diseases. They receive 80% of their daily wage as benefits.
Under the ESI scheme, women are entitled to 26 weeks of fully paid maternity leave for their first 2 children. The provisions are also extended to women adopting children, undergoing medical termination of pregnancy, requiring confinement, who had a miscarriage or other complications owing to pregnancy. The provisions for each of these differ.
The ESI scheme offers disability benefits to employees for both temporary and permanent disablement. In case of temporary disablement, the worker is eligible for 90% of their monthly wages as compensation until recovery. In case of permanent disablement, the worker is entitled to compensation depending upon the extent of loss of earning capacity as certified by the medical board.
In case of involuntary loss of employment owing to factory closure, retrenchment, or permanent invalidity due to injury in the workplace, the insured person is offered 50% of the average monthly wages for a period of up to 24 months.
The dependants of the insured person receive financial assistance and pension in case of illness or injuries in the workplace. The dependents (children/ spouses/ widows/ parents) will get 90% of the average daily wages, shared in a fixed proportion among them. The spouses of deceased employees will get benefits up to remarriage while children till the age of 25 years. In the case of dependant parents, the benefits are provided subject to certain conditions.
ESI provides a range of other benefits to the insured persons and their families:
The major benefit of the ESI scheme to employees is that they can minimize their out-of-pocket expenses for healthcare. As per a study by the WHO and World Bank, at least 800 million people spend a minimum of 10% of their household budgets on healthcare expenses for themselves or dependents. The out-of-pocket expenses are so high that it pushes more than 100 million people into extreme poverty. In the case of India, roughly 65.06% of people spend out-of-pocket for medical expenses and fall into a debt trap.
The ESI scheme ensures that employees, especially those with meagre means, get timely access to proper healthcare and that they don’t fall deeper into poverty. Employees can save much more and use it for other important expenses like children’s education, house repairs, skill training, etc.
ESI provides employees a safety cushion in case of medical emergencies, involuntary loss of employment, or other socio-economic eventualities.
When employees have access to proper, timely healthcare, they will be more productive and it will also bring down absenteeism and attrition, etc. Employers will not have to pay for the medical expenses of employees in case of any workplace injury or occupational disease.
The ESI scheme is specifically crafted for employees with monthly wages up to Rs. 21000 and Rs. 25000 in case of employees with disabilities.
The individuals employed within the premises including precincts of the establishments or factories are covered by the scheme. This is irrespective of their wages and the scheme also covers trainees, casual laborers and contract employees, etc. Directors, proprietors, partners, contractors, and consultants are not included under the ambit of the Scheme.
The employers can extend the benefits of the ESI scheme to other workers including domestic workers, gig workers, temporary workers, and so on through Salarywala.
By definition, yes. Though employers can voluntarily contribute to the scheme even when they are not mandated, informal employees still don’t have access to the ESI benefits. This is where Salarywala comes into play.
The employees of the unorganized sector can access comprehensive healthcare through SalaryWala. They will get dependant benefits, disability benefits, and everything else provided by ESI. Employers, including households and those employing temporary and gig workers, can make comprehensive healthcare benefits accessible to the most vulnerable sections of the workforce through SalaryWala.
When an organization employs 10 or more workers (20 or more in the case of Maharashtra and Chandigarh), ESI registration is mandatory. The employer must register with the ESIC. The registration must be completed within 15 days after the organization becomes eligible.
The registration and compliance processes are complex and challenging in many ways. If you have a small office or simply run a household enterprise, all these registration and other processes can be daunting and difficult too. If you are a household looking to help your household staff get access to healthcare benefits, you cannot register. But you don’t have to worry about these complex processes when this task is entrusted to Salarywala.
The Pehchan card or the ESI card is the health card given to employees registered under the ESI scheme. This card enables ESI-registered employees to continue to access the benefits of the scheme even when they switch jobs or face involuntary loss of employment. The insured persons and their dependents must carry this card to ESI dispensaries/ hospitals to obtain cash-free, timely medical care.
The ESIC is tied up with several hospitals and dispensaries all over the country to ensure insured persons and their families get access to timely, cash-free healthcare. Employees and their families can avail medical care only at their designated ESI dispensary or hospital. In case of emergencies, the insured person can visit any ESI hospital or dispensary with their Pehchan card.
Visit the ESIC Portal for the complete list of ESI hospitals and dispensaries
The ESI scheme is an important step towards universal access to healthcare. Whether an employer is in the formal or informal sector, it will be beneficial to ensure comprehensive healthcare benefits to the employees voluntarily through the ESI scheme. Salarywala makes it especially simple and straightforward for employers to offer healthcare benefits to all employees including domestic workers and other informal employees.