ESI is the abbreviated form of Employees’ State Insurance.
Introduction
ESI Scheme is a type of social security scheme which benefits the Indian workers by providing them with self-financing health insurance.
The scheme is administered by an apex corporate body known as the Employees’ State Insurance Corporation (ESIC). It comprises members including employees, employers, the Central and State Government, representatives of Parliament, and the medical profession. This autonomous corporate body comes under the Ministry of Labor and Employment of the Indian Government. Currently, ESI is headed by the Union Minister of Labour, Shri Santosh Kumar Gangwar, as its Chairman.
The corporation has its headquarters located in New Delhi. There are 36 ESI hospitals in various states, developed as ESIC Model Hospitals that come under the administration of the Corporation.
ESI History
B.N. Adarkar, an economist and former Governor of the Reserve Bank of India, was appointed by the Government of India to create a health insurance scheme for industrial workers. He submitted his report which became the basis of the Employment State Insurance Act of 1948. Later in the year 1952, ESIC was established in Delhi and Kanpur.
Objective of the ESI Act, 1948
The Act aims to provide benefits for medical treatment and sickness including maternity and disablement to the employees of factories and establishments and their dependents.
Benefits of ESI
The Act is meant to provide the following six social security benefits:
(a) Medical Benefit: Full medical care is provided to an insured person and his family members from the day he enters insurable employment, even after retirement, on payment of a token annual premium of Rs. 120/-.
(b) Sickness Benefit (SB): Sickness benefit is provided in the form of cash compensation at the rate of 70% of wages payable to insured workers for a maximum of 91 days in a year during the period of certified sickness.
(c) Maternity Benefit (MB): Maternity Benefit for pregnancy/ confinement is payable for 26 weeks, extendable up to one month on medical advice at the rate of full wage.
(d) Disablement Benefit: It includes both temporary and permanent disablement benefits at the rate of 90% of the wage. The benefit is payable as long as the disability continues.
(e) Dependent Benefit (DB): DB paid to the dependents of an insured person in cases where death occurs due to occupational injury or hazards, at the rate of 90% of wage in the form of the monthly payment.
(f) Other Benefits:
- Funeral expense up to an amount of Rs. 15,000/-
- Vocational Rehabilitation
- Physical Rehabilitation
- Age Medical Care
- Rajiv Gandhi Shramik Kalyan Yojana
- Atal Beemit Vyakti Kalyan Yojana
ESI Applicability
- The Act is applied to non-seasonal factories, private medical, and educational institutions, and other establishments employing 10 or more persons in certain States/UTs.
- Wage limit for coverage under the Act- Rs. 21,000/- per month [Rs. 25,000/- per month for persons with a disability].
ESI Contribution
- Employee’s contribution rate – 0.75% of the wages
- Employer’s contribution rate – 3.25% of the wages payable in respect of the employees in every wage period
- Employees earning a daily average wage up to Rs. 176/- are exempted from payment of contribution
Areas Covered by ESI
The Employees’ State Insurance (full form of ESI) Scheme is applicable in 540 districts in 34 states and Union Territories. The scheme is yet to be implemented in Arunachal Pradesh and Lakshadweep.
Conclusion
So this was all about the Employees’ State Insurance (ESI) Scheme, the objective behind its formation, a brief history of ESI, benefits of ESI for workers, its applicability, the contribution of workers to ESI, and the states and UTs that have implemented this benefit to its citizens. If you have any queries or doubts related to ESI, feel free to write to us in the comments section below.