Employee State Insurance

Employees' State Insurance Scheme

The Government of India established the Employees' State Insurance Scheme (ESIC) in 1948 to provide social security to the workers of newly independent India. The Employees' State Insurance Corporation (ESIC) created the scheme to protect employees from the effects of sickness, maternity, accidents, or deaths caused by work-related injuries, as well as to cover medical expenses for the insured individual and their family. The financial assistance offered by the ESIC may replace the employee's income loss due to any injury, sickness, or disablement.

Main Benefits Provided Under the ESI Scheme

• Sickness Benefit
• Disablement Benefit
• Dependant’s Benefit
• Maternity Benefit
• Medical Benefit

Overview and Reach of the ESI Scheme

Initially, the Employees' State Insurance Scheme was implemented in two industrial centers in the country: Kanpur and Delhi. However, over time, the plan has grown to include over 830 centers across 31 states and Union Territories. Furthermore, the scheme covers 7.23 lakh factories and establishments across the country, aiding about 2.03 crore people. Currently, the total number of beneficiaries exceeds 7.89 crore. The Employees' State Insurance Corporation has provided robust infrastructure that serves insured individuals and helps them lead a secure life by setting up 151 hospitals and 42 hospital annexes for inpatient services. Outpatient medical services are provided through a network of approximately 1418 ESI dispensaries and 1017 panel clinics. Additionally, the corporation has established five occupational disease centers in states like Maharashtra, West Bengal, and Madhya Pradesh. These centers are established to detect and treat occupational diseases prevalent among workers employed in hazardous industries.

Eligibility Criteria for the Employees' State Insurance Scheme

To avail the benefits of the ESI scheme, individuals must meet the following eligibility criteria:

• Must be employed in a non-seasonal factory with more than 10 employees (as per Section 2(12) of the Employees' State Insurance Scheme).
• The individual's monthly wage must be INR 21,000 or less.

Key Benefits of the Employees' State Insurance Scheme

The Employees' State Insurance Scheme is applicable to businesses with 10 or more employees, though the minimum employee count may vary by state. The scheme is applicable only to individuals with a monthly wage of less than INR 21,000 and offers numerous benefits to employees.

• Unemployment Cover: This benefit supports workers who lose their job due to circumstances like termination or resignation, helping bridge the income gap while an individual seeks new employment.
• Death Benefit: The ESI Scheme offers protection to the insured family in case of the insured's death. The widow is covered for life or until remarriage, and dependent children are covered until age 25.
• Long-Term Sickness Benefit: If an employee contracts one of the 34 listed long-term ailments under ESI, they receive 80% of their average daily wages to support their family.
• Value-Added Benefits: In addition to basic benefits, the Employees' State Insurance Scheme also offers vocational training, physical rehabilitation, funeral expense cover, skill up-gradation, and more.
• Disablement Benefit: The ESI scheme offers 90% of the average daily wages to employees suffering from temporary disablement for its entire duration. For permanently disabled employees, the benefit is provided for their entire life.

Coverage Offered by the ESI Scheme

The Employees' State Insurance Scheme offers various coverage benefits which are mentioned below.

Latest Developments in the Employees' State Insurance Scheme

The contribution rates are 3.25% of the total wage paid by employers and 0.75% of the total wage contributed by employees. Recent expansions and revisions to the Employees' State Insurance Scheme include expanded coverage for employees in theaters, restaurants, hotels, stores, and motor transport, among others. The scheme also applies to employees in private educational and medical institutions, though only in selected states and Union Territories. According to the latest reports, the ESI scheme is now accessible to over 3.49 crore families in India as of March 2021.

IT Project "Panchdeep" for Enhanced Efficiency

To enhance the ESI scheme's efficiency and effectiveness, the government has initiated its IT Project "Panchdeep" to digitize internal and external processes, ensuring efficient operations, especially for services to employers and insured persons. The Employer Portal allows various online transactions without visiting any ESIC office, saving time and avoiding routine paperwork.

Other Benefits Offered Under the Employees' State Insurance Scheme

Additional benefits offered under the ESI scheme include funeral expenses, confinement expenses, and vocational training. Refer to the detailed table below for benefit limits.

What is Not Covered Under the ESI Scheme?

The Employees' State Insurance Scheme has certain limitations. It cannot be availed by individuals earning over ₹21,000 per month, or ₹25,000 for disabled individuals. Additionally, in states like Chandigarh and Maharashtra, the minimum employee count for an organization to apply for this scheme is 20.

ESIC Portal Registration Process

The ESIC portal offers an easy online registration process. Follow these steps:

1. Log in to the ESIC portal.
2. Register on the ESIC portal by clicking the "Employer Login" option on the home screen.
3. Fill in the required details and click "Sign Up".
4. Once the sign-up process is complete, the employer receives a confirmation email at their registered email address.
5. The employer is then asked to fill in Employer Registration Form-1, which includes details related to the employer unit, factory/company, and more.
6. After completing Employer Registration Form-1, the employer is required to pay the advance contribution for 6 months.
7. Upon successful completion of the 6-month contribution payment, the ESIC portal provides the employer with a registration letter containing a 17-digit registration number, which serves as proof of employer registration.

Documents Required for the ESI Scheme

To avail the Employees' State Insurance Scheme, entities need to submit the following documents:

• Registration certificate obtained through the Factories Act or Shops and Establishments Act.
• Certificate of Incorporation (e.g., company registration certificate, partnership deed, or GST certificate).
• Articles of Association
• Address Proof
• Utility Bills
• Business PAN Card
• List of employees working in the company
• Cancelled Cheque
• List of Shareholders of the company

Employees' State Insurance Scheme Claim Status

Beneficiaries of the Employees' State Insurance Scheme can claim both medical and cash benefits. To check your claim status, follow these simple steps:

1. Download the ESIC App on your mobile (available for Android and iOS platforms).
2. Fill in your insurance number and click "Get OTP".
3. The insured individual will receive the OTP on their registered mobile.
4. Once you enter the OTP, go to the services menu and click "Claim Status".