A Closer Look at Employees State Insurance (ESI)

Today let’s talk about employee well-being with the Employee State Insurance Scheme (ESIS)- a program designed to protect workers from the uncertainties of sickness, disability, and work-related incidents leading to mortality. Going beyond a standard social security setup, ESIS is a comprehensive plan that ensures the welfare of workers and their families.

On 24 February 1952, Prime Minister Pandit Jawahar Lal Nehru inaugurated the scheme in Kanpur. It is now commemorated as ESIC Day. Simultaneously launched in Delhi, the scheme initially covered 1,20,000 employees, with Nehru himself becoming the first honorary insured person.

Now, let's delve into the intricacies of ESIS- from its expansive coverage to the invaluable benefits and the straightforward registration process. Let's jump in!

Understanding the Employees State Insurance Act, 1948

The Employees State Insurance Act 1948, commonly known as the ESI Act, was enacted by the Parliament of India to establish a robust social security system for workers. The primary goal was to protect workers from physical and financial distress during such situations.

It was enacted when the country's industries were still developing, and there was heavy dependence on imported goods. The focus of the law was on industries like jute, textiles, and chemicals, which were limited in number during that time.

This act provides medical coverage and essential benefits to employees working in various sectors, including factories, businesses, hotels, cinema theatres, educational institutions, and more.

The ESI scheme is applicable to establishments employing ten or more employees, with the threshold being twenty employees in Maharashtra and Chandigarh. 

Workers earning wages up to ₹21,000 per month are eligible for coverage under this scheme. (₹25,000/- per month in the case of Persons with Disabilities).

Coverage and Infrastructure of the ESI Scheme

The ESI scheme has witnessed remarkable growth since its inception. As of August 2023, the ESI Scheme is now notified in 656 districts in 36 states and Union Territories, which include 535 fully notified districts and 108 partially notified districts. This scheme benefits over 3.42 crore workers and their families.

Employees State Insurance Corporation (ESIC) ensures effective implementation through a robust infrastructure network. Includes 161 hospitals, 42 annexes, 1,574 ESI dispensaries, 387 Ayush units, and 887 panel clinics.

• Spread across the country for widespread accessibility.
• Provides comprehensive medical care and attention to insured individuals and their dependents.
• Ensures healthcare support through hospitals, dispensaries, and medical facilities.

Features and Benefits of the ESI Scheme

The ESI scheme offers a wide range of benefits to insured workers and their dependents. 

Let's explore the key features and benefits provided by the scheme:

1. Medical Benefits

Under the ESI scheme, insured individuals receive comprehensive medical care at affordable rates. The scheme covers medical expenses from the day of employment, ensuring that workers have access to necessary healthcare facilities.

2. Maternity Benefits

Female workers covered under the ESI scheme are entitled to maternity benefits. They can avail 100% of their daily wages for up to 26 weeks, which can be extended based on medical advice. In the case of miscarriage or adoption, the benefits are provided for a specific duration.

3. Disability Benefits

The ESI scheme provides financial assistance to workers in case of temporary or permanent disabilities. Workers with temporary disabilities are eligible for a monthly wage of 90% until they recover. In the case of permanent disabilities, they can receive 90% of their monthly wage for the rest of their lives.

4. Sickness Benefits

During periods of medical leave, the ESI scheme offers cash benefits to workers to compensate for the loss of wages. Workers can avail 70% of their daily wage for a maximum of 91 days, which can be divided into two consecutive periods.

5. Funeral Expenses

The ESIC provides an amount of ₹15,000 towards funeral expenses, which is paid to the dependents or the individual responsible for performing the last rites of the insured worker.

6. Dependent Benefits

In the unfortunate event of illness or injury resulting in the loss of life of the insured worker, the dependents receive financial assistance. The scheme ensures that monthly payments are distributed equally among the surviving dependents.

These are just a few of the many benefits offered by the ESI scheme. The scheme also covers vocational and physical rehabilitation, unemployment benefits, and old-age medical care.

ESI Registration: A Step Towards Social Security

To avail of the benefits of the ESI scheme, both employers and employees need to complete the registration process.

As I mentioned above, if an establishment employs ten or more employees (or twenty or more in Maharashtra and Chandigarh), it is mandatory to register with the ESIC. Employees with wages up to ₹21,000 per month (₹25,000 for persons with disabilities) are eligible for coverage under the scheme.

The registration process is straightforward and can be done online. Employers need to create an account on the ESIC portal and provide necessary details about their establishment, employees, and other relevant information.

Once registered, the employer contributes 4.75% of the employee's wages, while the employee contributes 1.75% towards the ESI scheme.

Applying for an ESI Card: Pehchan Card

The ESI Card, also known as the Pehchan Card, is an identification card that enables beneficiaries to avail of services at empanelled hospitals and dispensaries. Employers can download the ESI Pehchan Card from the ESIC portal and distribute it to their employees. The card contains essential details, including the beneficiary's name, father's name, address, and unique ESI insurance number.

The Bottom Line

The Employee State Insurance Scheme plays an important role by offering comprehensive medical care, maternity benefits, disability coverage, and other financial assistance; the scheme ensures that employees and their dependents are protected during times of need. 

The ESI Act, along with the infrastructure and facilities established by the ESIC, ensures the smooth implementation and delivery of these benefits. Employers and employees alike can benefit from the ESI scheme by completing the registration process and availing of the services and support it provides.

Remember, the ESI scheme is a crucial component of India's social security system, and by promoting awareness and understanding of its benefits, we can contribute to a more secure and inclusive workforce. 

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