What Is The ESIC Scheme?

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The ESIC, which refers to the employees’ state insurance scheme of India, is a contributory health insurance program for daily wage workers or laborers and their families designed to aid them with financial cover during hospitalization and related emergencies. The statutory body that administers the scheme, the Employees’ State Insurance Corporation, under the Ministry of Labor and Employment, mandates employers to enroll eligible employees in the ESIC program.

Key Features Of ESIC

The government-backed social security scheme, ESIC, offers health insurance medical benefits to insured members or their dependents during times of sickness, disability, and maternity during the term of the employment. The scheme also covers benefits to the insured at their old-age requiring medical care, as well as to dependents of a deceased member due to employment injury or occupational hazards.

Here’s a guide to walk you through the features of ESIC.

Account for

• It is the duty of employers of non-seasonal factories employing 10 (20 in some states) or more employees to enroll workers under the ESIC program.
• The program is eligible for daily wage workers at industries, factories, transport, construction sites while some states have also extended the program for shops, hotels, restaurants, newspaper establishments, as well as for employees in private and medical institutions.

Investment

• Employers contribute 3.25% of the employee’s wage, and employees need to contribute 0.75% of their monthly earnings.
• The state governments contribute 1/8th of the expenditure of medical benefits within a per capita ceiling of INR 1,500 per insured person per annum.
• The existing wage limit for coverage under the ESIC program is INR 21,000 per month, and INR 25,000 in the case of persons with disability.

Collection of contribution

• Employers have to contribute their part as well as deduct eligible employees’ contribution from their wages.
• These contributions will have to be deposited by employers to the corporation within 15 days of the last day of the calendar month.
• These deposits can be paid online via the ESIC portal. Nevertheless, the corporation has authorized the State Bank of India (SBI) as well as some other public sector banks to receive the contribution.

Steps To Open ESIC Account Online

An employer can register with the ESIC portal (www.esic.in) to set up an ESIC account. The ESIC has put in place an online mechanism for employers and insured members to access their ESIC account. Employees registered with the ESIC can view the financial statement, which are the contributions made by their employer as well as their contribution deducted from the monthly salary during the entirety of his/her employment years. The portal enables employers to file monthly contributions, generate temporary identity cards and create monthly contribution challans online.

An employer has to take up an initiative to open an ESIC account. Here’s the process to follow.

• Sign-up: An employer can register with the ESIC by creating a new login by submitting their company’s name, employer’s name, state and regional office, email id, and mobile number. The login details and the link are sent to the registered email id.
• Submit company’s details: The ESIC asks employers to fill up the form containing details of their type of unit (factory or shop/establishment), license number, proprietorship, date of establishment, etc.
• Submit employees’ details: Name of all the employees should be included as well as their salary, bank details, contact details, etc. After the submission, an insurance number of each employee is created.
• Pay initial contribution: An employer can pay online at least six months of their contribution for all employees registered with the ESIC.
• Balance check online: A history of all contributions made to an employee’s account can be checked online.

Benefits Of ESIC Scheme

According to the ESIC website, these are the benefits that can be availed from the ESI scheme.

Medical Benefit

• Full medical care to an Insured person and his family members.
• No upper limit on expenditure on the treatment.
• It is extended to retired and permanently disabled insured members and their spouses on payment of INR 120 as an annual premium.

Sickness Benefit

• 70% of wages as cash compensation during the sickness period for a maximum of 91 days per year.
• The Insured Person is required to contribute for 78 days in 6 months.
• The benefit can be extended up to two years in case of 34 malignant and long-term diseases at 80% of wages.
• Full wage is payable to the insured person undergoing sterilization for family planning from 7 to 14 days for vasectomy and tubectomy respectively.

Maternity Benefit

• Maternity benefit during confinement or pregnancy is payable for 26 weeks.
• It can be extended by one month on medical advice at the rate of full wage.
• Insured has to contribute for 70 days in the preceding two contribution periods.

Disablement Benefit

• Disability benefit at the rate of 90% of wage is payable till disability continues.

Dependents Benefit

• 90% of the wage is paid monthly to dependents of a deceased insured person due to employment injury or occupational hazards.

Other Benefits

• Vocational rehabilitation is provided to permanently disabled members undergoing VR training at VRS.
• Physical rehabilitation is provided in case of physical disability due to employment injury.

Frequently Asked Questions (FAQs)

Is overtime allowance, or bonus considered for the purpose of the coverage of the employee under the Scheme?

The overtime allowance, bonus, and such incentives are not considered for the purpose of contribution. However, since certain payments are paid in case of layoff, contribution is payable on such payments.

Does changing jobs affect an employee's insurance status?

No—changing jobs does not affect the insured person’s status, and his or her insurance number will remain the same. However, depending upon the new employer registration with the ESIC, the member can continue to contribute to the health insurance scheme.

How do I locate the nearest ESIC branch?

The ESIC has listed the name and address of field offices or branches in every state and UT, which can be located on the online portal.

How can I avail the ESIC benefits at times of need?

The ESIC has put in place a 24×7 helpline 1800 11 3839 for attending calls of insured persons and their family members who wish to seek advice and guidance from casualty or emergency. Nevertheless, the first point of contact for employees at such a time can be their employer to know about the available funds, etc.

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Dipen Pradhan is a Staff Reporter for Forbes Advisor India. He has more than 10 years of experience in journalism. He covers the personal finance beat. When he is not writing, he enjoys documenting the community's ethnic knowledge, and travels to explore rural hotspots.