ESI – Employee State Insurance

October 14, 2014

Employee’s State Insurance Corporation:

Employees’ state Insurance Scheme of India is a multidimensional social system tailored to provide socio-economic protection to worker population and their dependents covered under the scheme. Besides full medical care for self and dependents, which is admissible from day one of insurable employment, insured persons are also entitled to a variety of case benefits in times of physical distress due to sickness, temporary or permanent disablement etc. resulting in loss of earning capacity, the confinement in respect of insured women, dependents of insured persons who die in industrial accidents or because of employment injury or occupational hazard are entitled to a monthly pension called the dependents benefit.

At an average the ESI Corporation makes 40 lakh individual payments each year amounting to about Rs.300 crores through its wide spread network of branch Offices in the implemented areas. For availing cash benefit in different contingencies insured persons or their dependants have to complete some minimal formalities and follow certain set procedures.

Applicability

ESI Act applies to all non seasonal factories (including Government factories) which employ 10 or more employees and carry on a manufacturing process with the aid of power. It also is extended to establishments, shops employing more than 20 employees.

Coverage

All the employees like casual, temporary or contract whose drawing wages are less than Rs.15,000/- pm are covered under the act.

CONTRIBUTION

Contribution is the amount payable to the Corporation by the principal employer in respect of an employee and comprises the amount payable by the employee and the employer. The scheme is primarily funded by contribution raised from insured employees and their employers in the implemented areas as a small but specified percentage of wages payable to such employees.

The rates of contribution as of now are:-

Employees’ contribution-1.75 percent of the wages

Employers’ contribution-4.75 percent of the wages

Total-6.50 percent of the wages It is obligatory on the part of the employer to calculate and remit ESI Contribution comprising of employers’ share 4.75% plus employees’ share of 1.75% which is payable on or before 21st of the following month, to the month to which the salary relates. If the employee is drawing up to Rs.200/- as daily average wage, he is exempt from the payment of his share of contribution. The employer is however to pay employer’s share of 4.75% of the salary received/receivable by the employee.

 

RECOVERY OF CONTRIBUTION

In the first instance the Principal Employer is to pay employers’ share of contribution in respect of every employee whether employed directly or through immediate employer. The employees’ share may thereafter, be recovered by making deduction from their wages for the wage period for which contribution is, however is payable. No such deduction may be made from any wages other than those relating to the period in respect in which contribution is payable.

Benefits

Under this scheme benefits provided for the employees can be broadly classified in to following types, which includes primary medical care, specialists and diagnostic services, in-patient care, maternity needs, super specialty treatments  etc.,

  • Medical benefits
  • Sickness benefits
  • Maternity benefits
  • Disablement benefits
  • Dependant benefits
  • Miscellaneous benefits like, Funeral expenses, Rehabilitation allowance, Old age medical care etc.

 

Employer’s Obligations

  • Get your Factory/establishment registered within 15 days after the Act becomes applicable. Submit Form01 to the Regional Office for this purpose. Obtain Employers code No. for use in all ESI Forms/documents and correspondence with the offices of the ESI Corporation.
  • Fill up Declaration Forms in respect of all coverable employees and submit the same to the Regional Office/Local Office of the Corporation well before the Appointed day and obtain Insurance Number from the concerned Local Office/Regional Office. In respect of newly appointed employees, fill up the Declaration Form soon after appointment of such employees and submit the same to the local office concerned.
  • Pending receipt of identity cards/identity certificates you may issue Certificate of employment in Form 86 to the covered employees enabling them to avail cash/medical benefits.
  • Pay ESI contributions (Employers share @ 4.75% of the wages and the employee’s share @1.75% of the wages) within 21 days of the month following, in which the wages fall due.
  • Maintain an Accident Book as prescribed under the factory Act/ESI Act.
  • Submit an Accident Report to the Local Office/ESI dispensary concerned immediately in respect of accidents that could result in death or disablement and within 24 hours of its Occurrence otherwise. Minor accidents which do not cause absence from work need not be reported.
  • Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESI doctor.
  • Grant leave to insured employees on the basis of sickness certificates issued by any authorized ESI doctor.
  • Submit return of contribution within 42 days of the expiry of contribution period.
  • Furnish any requisite information promptly as and when asked for by the Regional Office/Local Office/any other office of the Corporation/Scheme.
  • Facilitate proper inspection of factory/establishment by any authorized officer of the Corporation and produce before him all relevant records on demand.
  • Intimate the date of closure or shifting (temporary or permanent) of the factory/establishment to the Regional Office/Local Office within seven days of its closure or shifting.
  • Promptly report any change in the business activity, ownership of the concern or its management.
  • Ascertain the liability towards ESI dues, while taking over the ownership of any factory/establishment by purchase, gift, lease or license or in any other manner whatsoever as new owner is liable to discharge the past liabilities if any.
  • Maintain proper sanitation for a hygienic and healthy environment within the workplace and in residential quarters if allotted to the insured persons. 

 

Role of ESIC in delivery of benefits

  • The quality and quantity of benefits is as per norms and standards laid down by the corporation for the purpose.
  • The benefits are made available within the given time frame to insured persons and beneficiaries.
  • No harassment is caused to the beneficiaries across the counter at the grass root level by way of word or deed.
  • All requisite information, procedural guidance etc. is made available to the beneficiaries for claiming benefits.
  • All types of Forms etc. are made available to the beneficiaries free of costs as may be required by them for filing claims etc.
  • No beneficiary is exploited at any level in any way in the process of delivery of benefits.
  • Office hours as notified for ESIC/ESIS establishments are strictly adhered to by the staff and displayed prominently so as to avoid any inconvenience being caused to the beneficiaries in smooth flow of benefits.
  • Drugs, dressings, injections etc. as prescribed by the authorized doctors are made available timely.
  • A complaint box is fixed within the office premises for posting written complaints.

 

Forms
For Employers –

 

For Employees  –

Facts:

  • ESIC is the country’s first multi-dimensional social security system for workers in the organized sector.
  • ESIC covers a total beneficiary population of more than 355 lakh today. ESIC has the country’s largest medical infrastructural facility under one umbrella.
  • ESIC is the most affordable social security system with the lowest contribution rate for multiple health insurance benefits.
  • ESIC is the only health insurance scheme that offers full medical care to workers and their dependants without any ceiling on individual expenditure.
  • ESIC offers a special package of full medical care to retired/disabled insured persons for self and spouse for a nominal contribution of Rs.120/- per annum.
  • ESIC offers a special package of full medical care to retired/disabled
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