FAQs - ESI

This scheme is introduced to provide certain benefits for the employees in times of physical and economic distress consequent up on sickness, disablement etc., Along with the necessities like food, clothing, housing etc., people need security from any unforeseen incidents such as sickness, disablement etc.,.

The Employees' State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees' State Insurance Act and is designed to accomplish the task of protecting 'employees' as defined in the Employees' State Insurance Act against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families.

The Scheme covers employees of non-seasonal power-using factories employing 10 or more persons. There is, however, a built-in provision for its extension to other establishments or classes of establishments, industrial, commercial, agricultural or otherwise. The Scheme has been progressively extended to cover employees in non-power using factories employing 20 or more persons and to commercial establishment.
 

An interruption of money even for a small period is a hardship in a modern economy. For example, an employee met with an accident and had hospitalized for 6 months. Employee won’t get salary at the time of hospitalization indeed dependants has to pay the medical bills too.

This sort of inconvenience and interruption are inevitable in every body’s life. By coming forward to provide health protection and income maintenance in a series of often experienced contingencies like sickness, maternity, disablement and death due to employment injury, the Employees' State Insurance Scheme tends to ameliorate your economic anxiety and to be a friend in need and distress.
 

The Employees' State Insurance Scheme performs a dual role; by providing assistance in kind (medical care) it tries to restore your health and working capacity and by assistance in cash (cash benefit) it tries to sustain you when your income is interrupted. With a better and facile health protection, greater vitality, and assurance of income-maintenance in times of need, it makes you every inch a better, a healthier, secure worker and therefore, a happier man. The assistance comes to you not as an act of benevolence but in virtue of an acquired right.
 

 The Employees' State Insurance Scheme is administered by a corporate body called the Employees' State Insurance Corporation (ESIC), which has members representing Employees, Employers, the Central Government, State Governments, Medical Profession and the parliament. The Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation. The other bodies at the national level are the Standing Committee (a representative body of the Corporation) and the Medical Benefit Council, a specialized body which advises the Corporation on administration of Medical Benefit. At the Regional and Local levels, the Regional Boards and Local Committees have been constituted. There is, thus, an association of interests and interest groups at all levels. ESIC is the trustee of the interests of the insured persons. It discharges its obligations and duties through a net-work of Regional Offices and Branch Offices, Hospitals and Dispensaries spread over the entire country.

The Scheme protects all "employees" engaged on a monthly remuneration not exceeding Rs. 6500/- in a factory/establishment to which the Act applies. Persons employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch There of or purchase of raw materials, or distribution or sale of the product of a factory or establishment are also covered. Mines, Railway Running Sheds, Naval, Military and Air Force Workshops and specified seasonal factories are excluded. The scheme also provides full medical cover to the dependants of insured persons. In the event of death of an insured person due to employment injury dependants become eligible to cash benefit.
 

The Employees' State Insurance Funds are primarily built out of employer’s as well as employee’s contribution payable monthly as a fixed percentage of wages.
 

Simultaneously with his/her entry into employment in a covered factory or establishment, an employee is required to fill in a Declaration Form. The employee is then allotted a Registration Number, which distinguishes and identifies the person for the purposes of the Scheme. A person is registered once and once only upon his entry in insurable employment.
 

Simultaneously with his/her entry into employment in a covered factory or establishment, an employee is required to fill in a Declaration Form. The employee is then allotted a Registration Number, which distinguishes and identifies the person for the purposes of the Scheme. A person is registered once and once only upon his entry in insurable employment.
 

Contributions payable in respect of an employee comprise of employer's contribution and employee's contribution prescribed in Schedule I of the Act. An employee covered under the scheme has to contribute 1.75% of the wages where as, an employer contributes 4.75% of the wages payable to an employee. The total contribution in respect of an employee thus works out to 6.50% of the wages payable.
 

Employees earning less than Rs 70/- a day are exempted from payment of contribution. The employers share of contribution is, however, payable.
 

The Contribution is deposited by the Employer in cash or by cheque at the designated branches of some nationalized banks. The responsibility for payment of all contributions is that of the employer with a right to deduct the Employees' share of contributions from employees' wages relating to the period in respect of which the Contribution is payable.
 

Workers, covered under the ESI Act, are required to pay contribution towards' the scheme on a monthly basis. A contribution period means a six-month time span from 1st April to 30th September and 1st October to 31st March. Thus, in a financial year there are two contribution periods of six months duration.
Cash benefits under the scheme are generally linked with contributions paid. The benefit period starts three months after the closure of a contribution period. The two types of periods are elucidated below:-
Contribution Period
Benefit period
1st April to 30th September Corresponding
1st October to 31st March
1st January to 30th June of the following year
1st October to 31st March 18th July to 31st December
 

A net-work of Branch Offices has been established by the Corporation in all implemented areas to disburse all claims for sickness, maternity, disablement and dependents' benefit. The Branch Office also answers all doubts and enquiries and assists otherwise infilling in claim forms and completing other action necessary in connection with the settlement of claims. These offices also interact with the employers of the area. The Branch Offices are managed by a Manager and work under the direction and control of the Regional Offices.
 

Sickness signifies a state of health necessitating medical treatment and attendance and abstention from work on medical grounds. Financial support extended-by the Corporation is such a contingency is called Sickness Benefit.
 

Enhanced Sickness Benefit is cash benefit for the insured persons undergoing sterilization operation of vasectomy/ tubectomy for family planning.
 

Disablement is a condition resulting from employment Injury which may be :-
(a) Temporary i.e. rendering an insured person incapable of work temporarily and necessitating medical treatment;
(b) Permanent partial i.e. reducing the earning capacity of the insured person generally for every employment;
(c) Permanent total i.e. totally depriving the insured person of the power to do all work.

 

Employment injury means a personal injury caused to an employee by an accident or occupational disease arising out of and in course of his employment in a factory or establishment covered under the Employees' State Insurance Act. The law relating to Employment injury has been liberalized. Now, an accident arising in the course of employment is presumed also to have arisen out of his employment if there is no evidence to the contrary. Further, an accident brought about by willful disobedience, negligence or breach of regulations etc. or an accident happening while traveling in a transport provided by the employer or while meeting an emergency is accepted subject to certain conditions, to have arisen in the course of and out of employment. Injuries suffered while under the influence of drink sand drugs take away the right to the employee to this benefit.

Roadside accident caused while commuting between place of residence and workplace is also treated as notional extension of employment for purpose of death or disablement benefit.
 

Occupational Diseases are such diseases as are susceptible of being traced back to their occupational origin. There are specified under Schedule III of the Employees' State Insurance Act, which enumerates the compensable Occupational Diseases and the corresponding industrial processes involving exposure to the diseases are thus recognized without any further evidence.
 

Temporary Disablement Benefit is paid periodically in arrears as the evidence of incapacity (medical certificate) is produced. Permanent total disablement and permanent partial disablement benefits are paid in the form of pensions. Current employment for wages or engagement in any gainful activities is no bar to payment of permanent disablement benefits. An insured person suffering from an occupation disease is also entitled to full medical care.
 

There is indeed no way of adequately compensating a permanently disabled employee and yet some method of determining whether an employment injury has resulted in permanent disablement and of assessing the extent of permanent damage caused by that employment injury has to be adopted for the purpose of determining the scale of compensation for the loss of earnings. This is done by evaluating loss of earning capacity with reference to general disability for all work. The evaluation is done by a Medical Board whose decision can be appealed against to a Medical Appeal Tribunal presided over by a judicial officer, with a further right of appeal to Employees' Insurance Court or directly to Employees' Insurance Court. Pending an appeal, payment for permanent loss of earning capacity as recommended by the Medical Board is made, subject to adjustment later. Loss of wages and expenditure on conveyance occasioned by attendance before the Medical Board are compensated by the Corporation in accordance with rates framed for the purpose.
Where the assessment of loss of earning capacity by the Medical Board is not of a final character, the beneficiary is required to appear again before the Medical Board for a review of the assessment.

 

Yes. If the Medial Board or the Medical Appeal Tribunal is satisfied by fresh evidence that a. decision was given because of non-disclosure or mis-representation of a material fact, it can review its earlier decision at any time. A Medical Board can also review its earlier assessment of extent of disablement, if it is satisfied that there has been substantial and unforeseen aggravation of the results of the relevant injury and substantial injustice would be done by not reviewing it. Such review, however, cannot be made earlier than 5 years or in the case of the provisional assessment, earlier than 6 months of the date of assessment to be reviewed.
 

Yes. At the option of the beneficiary, permanent disablement pension, where the daily rate payable is not significant, can be commuted for a lumpsum payment subject to the fulfillment of the following two conditions :-

• That the permanent disablement has been assessed as final, and
• The daily rate of permanent disablement does not exceed Rs 5/- and the total commuted value does not exceed Rs 30,000/- (effective from April-D3).

 

The Corporation at its cost arranges for the vocational rehabilitation of disabled insured persons provided the disability has been assessed at above 40 percent and the beneficiary is not over 45 years of age. The training is provided at vocational rehabilitation centers run by the Govt. of India etc. The fee, traveling expenses etc are borne by the Corporation.
 

Dependents Benefit is a monthly pension payable to the eligible dependents of an insured person who dies as a result of an Employment Injury or occupational disease.
 

Dependants entitled to the benefit could be

1. Widow/Widows during life or until remarriage:
2. Legitimate or adopted son until age 18 or if legitimate son is infirm, till infirmity lasts;
3. Legitimate or adopted unmarried daughter until age 18 or until marriage, whichever is earlier, or if infirm, till infirmity lasts and she continues to be unmarried.

In the absence of any widow or legitimate child, the benefit is payable to a parent or grandparent for life, to any other male dependant until age 18 or to an unmarried or widowed female dependant until age 18.

 

Yes. Dependant's Benefit once awarded can be reviewed by the Corporation at any time if it is satisfied on fresh evidence that the earlier decision was due to non-disclosure or misrepresentation of material facts. It can also be reviewed on birth, death, marriage, re-marriage and attainment of age 18, by a claimant. The benefit can be continued, increased, reduced or discontinued.
 

Where an insured woman wishes to claim Maternity Benefit after confinement or for miscarriage, she should obtain from the Insurance Medical Officer/insurance Medical Practitioner, a certificate of confinement or miscarriage and submit it to her Branch Office personally or by post along with a claim for Maternity Benefit. The claim form also contains a declaration of abstention from work.

If Benefit is desired before confinement, a Notice and Certificate of Pregnancy and a Certificate of Expected Confinement obtained from the Insurance medical Officer/ Insurance Medical Practitioner are also required to be submitted.

For claiming Benefit in the event of death of an insured woman leaving behind a child, her nominee and if there is no such nominee, her legal representative should submit personally or by post to the Branch Office of the deceased insured woman, claim for the Benefit together with a certificate of death of the insured woman.

An insured woman claiming Maternity Benefit for Sickness arising out of pregnancy, confinement, premature birth of child or miscarriage should submit her claim in the manner as for sickness benefit.

Where a claim to Maternity Benefit is not submitted Along with prescribed certificates referred to above, the Corporation has the discretion to accept other evidence in lieu thereof.

 

Medical Bonus is lump sum payment made to an insured woman or the wife of an insured person in case she does not avail medical facility from an ESI hospital at the time of delivery of a child. This bonus of Rs. 250/- has been increased to Rs. 1000/- from 1st April 2003.
What does Medical Benefit consist of? Medical Benefit means medical care of insured persons and their families, wherever covered for medical benefit.
 

Out-door medical care is provided at State Insurance Dispensaries or Mobile Dispensaries manned by full-time doctors ('Service' system) or at the private clinics of Insurance Medical Practitioners ('Panel" system). The scope of medical services also includes simple ante-natal and post-natal care for women, family welfare planning services and immunization against the common infectious diseases. The Scheme provides at the sole cost of the Corporation, artificial limbs to insured persons who lose their limbs due to employment injury or in certain circumstances otherwise also, dentures, spectacles arid hearing-aids where the loss of teeth, impairment of eye-sight or hearing respectively is due to employment injury.
 

ESIC has a network of 141 hospitals country wide. Majority of these hospitals are administered by the State Govts. In - patient and diagnostic services in basic specialties are available at these hospitals. State schemes have also tie-up arrangements with a number of Medical colleges. major state hospitals, as well as, private hospitals for advanced treatment for malignant diseases and complicated surgical interventions.
 

ESI Scheme provides preventive health care services through the network of its dispensaries and hospitals. These include immunization against some killer diseases, pulse polio vaccination and family welfare services etc. The scheme also participates in all major national preventive health service campaigns.
 

This component consists of a lump sum payment toward the expenditure on the funeral of the deceased insured person. The expenses are payable to the eldest surviving member of the family of the deceased insured person. The benefit is payable to the person who actually incurs the expenditure on the funeral of the deceased insured person in case the insured person had had no family.