Employees’ State Insurance Scheme: Here’s All About Its Benefits And Eligibility

The Employees’ State Insurance Scheme is a social security scheme that provides coverage to employees for medical needs, disability, and death benefits, among others. It applies to workers in factories, hotels, restaurants, road transport, newspapers, educational and medical institutions, and shops where the employer has 10 or more such workers/employees. The scheme offers social security benefits to employees earning up to Rs 21,000. The earning limit was earlier Rs 15,000, which was enhanced to the current level, effective from January 1, 2017. The wage limit is Rs 25,000 if the employee is having a disability. The Employee State Insurance Corporation (ESIC), under the purview of the Ministry of Labour and Employment, manages the scheme according to the Employees’ State Insurance Act, of 1948. It covers the employees for their medical needs, any injury during work, disability, or death due to injury, maternity benefits, and medical benefits to the family. It also covers rehabilitation benefits to employees in certain cases. Like other contributory social security schemes, the ESI scheme also runs with the contribution of both the employee and employer. The employer’s contribution is 3.25 percent of the salary/wage payable to the employee, and the employee’s contribution is 0.75 percent. So, in total, four percent of the salary is contributed to the scheme. Also Read: 3 Health Insurance Mistakes That Every Retiree Should Try To Avoid

Benefits Of ESI

The ESI scheme offers benefits to the registered employees until they recover and return to work. It provides medical care to the insured person (the employee) and the family members as well without a ceiling on the expenditure on the medical treatment. The benefits apply even to retired and permanently disabled insured persons and spouses on making a token premium of Rs 120 annually. Here are the benefits it offers. Medical Benefits: It offers medical benefits to the employees and their families from the day they are employed. Maternity Benefit: Maternity benefit is payable to the employee for 26 weeks and can be extended by one month. Sickness Benefits: This is a cash benefit payable to the employees, which is 70 percent of the wages payable for a maximum of 91 days in one year. Disability Benefits: The disability benefit is payable to the employee from the day of joining the work. The employee is eligible to receive 90 percent of the wage as a monthly payment. Dependents: The scheme offers financial benefits to the dependents in case the employee is injured at work or death occurs. Confinement Costs: This benefit applies in case of confinement at a place with no medical facility. Funeral Costs: In case of death, a sum of Rs 15,000 is payable to the family as the funeral cost to pay for the last rites of the employee. In certain cases, such as a permanently-disabled employee under vocational rehabilitation treatment, or an employee with physical disability due to injury, the scheme provides rehabilitation benefits.

Who Is Eligible?

The scheme covers an employee with a monthly income under Rs 21,000. It is the responsibility of the employer to enroll the employee for benefits under the scheme. The contribution is a fixed percentage of the salary and thus may differ from one employee to another. However, the social security benefits are not related to the contribution and are offered to all irrespective of the contribution made. The scheme applies even if one changes jobs and when the salary remains within the specified ceiling.