The Employees’ State Insurance Act, 1948


What does the ESI Scheme entail?

The Employees’ State Insurance Scheme in India is a comprehensive Social Security Scheme designed to offer socio-economic protection to employees in the organized sector. It aims to provide coverage against events such as sickness, maternity, disablement, and death resulting from employment injury. Additionally, the scheme ensures medical care for insured employees and their families.


How does the scheme benefit the employees?

The scheme offers comprehensive medical care to employees registered under the ESI Act, 1948, ensuring their well-being and the restoration of their health and working capacity during periods of incapacity. Additionally, it provides financial assistance to compensate for the loss of wages during abstention from work due to sickness, maternity, and employment injury. Furthermore, the scheme extends medical care to the family members of the registered employee.


What is the funding mechanism for the Scheme?

The ESI scheme operates as a self-financing system, with funds primarily derived from contributions made by employers and employees on a monthly basis. These contributions are calculated as a fixed percentage of the wages paid. Additionally, State Governments contribute 1/8th of the cost of Medical Benefit.


Area of Implementation

The ESI Scheme is rolled out in phases across various parts of the country through Gazette notifications. This process occurs after establishing the necessary infrastructure for the dispensation of medical and other benefits outlined in the provisions of the Act, ensuring accessibility to prospective beneficiaries.


Which establishments fall under the coverage of ESI in an area notified under Section 1(3) by the Central Government?

In areas notified under Section 1(3) by the Central Government, all factories where 10 or more persons are employed come under the coverage of Section 2(12) of the ESI Act. Additionally, establishments employing 10 or more persons in the following categories attract ESI coverage based on the notification issued by the appropriate Government (Central/State) under Section 1(5) of the Act:

(i) Shops

(ii) Hotels or restaurants not involved in manufacturing but engaged solely in ‘sales’.

(iii) Cinemas, including preview theatres;

(iv) Road Motor Transport Establishments;

(v) Newspaper establishments (not covered as a factory under Sec.2(12));

(vi) Private Educational Institutions (operated by individuals, trustees, societies, or other organizations) and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes, diagnostic centre’s, pathological labs).

It’s worth noting that in some states, coverage extends to establishments with 20 or more persons employed under Section 1(5). Additionally, a few State Governments may not have included Medical and Educational Institutions within the scope of the scheme.


Which categories of personnel are mandatorily included in the ESIC deduction guidelines?

ESI fund managed by using ESIC, it’s miles mandatory for employees getting the income of Rs. 21,000 or much less in line with month to serve the cash advantage and medical blessings to the employee and their households.


What is the source of contribution and the share of ESIC deduction guidelines?

The ESIC vide notification has reduced the share of deduction, the contribution will be from corporation and employee as in step with the latest probabilities. An employee has to pay zero. Seventy five percent and the company has to pay 3.25 percent of the wages towards ESIC contribution.


What to do upon getting the ESIC registration?

After getting the registration the status quo has to file the month-to-month returns with the department. The last date to report the ESIC go back is the fifteenth day of every following month.


If there is no worker and the registration has been taken, then some other specific compliance?

If the organization has taken the registration and at any point in time there’s no employee in the business enterprise whose ESIC is deducted, then additionally the organization has to report NIL return.


What if go back now not stuffed or put off filling?

A company who does not pay the contribution quantity in the time limit shall be vulnerable to pay simple hobby at the charge of 12% in step with annum for each day till the default persists.




What benefits are provided to the family members under the ESI Scheme?

(i) Family members are eligible for comprehensive medical care whenever required.

(ii) Family members are entitled to artificial limbs and appliances as part of their medical treatment.

(iii) Medical benefits are extended to the family during the period the insured person is receiving unemployment allowance. If the insured person passes away during this period, the family continues to receive medical benefits until the receipt of unemployment allowance.

(iv) In the event of the insured employee’s death due to employment injury, the widow, widowed mother, and children are entitled to Dependents’ benefit.

(v) Funeral expenses up to Rs. 10,000 are covered and will be reimbursed to any family member or person who actually incurs the expenditure on the funeral.


What benefits are provided to an Insured Person who ceases to be in insurable employment due to permanent disablement?

An Insured Person who is no longer in insurable employment due to permanent disablement caused by employment injury is eligible to receive medical benefits for themselves and their spouse. This benefit is provided upon payment of Rs. 120 for one year until the date on which the individual would have retired at the age of superannuation, had they not experienced such permanent disablement.

Vocational Rehabilitation programs, as per Rule 60, are also conducted for insured persons below the age of 45 with a disability of not less than 40% due to employment injury. These programs involve training provided in government or government-accredited institutions, following the norms of the Vocational Rehabilitation center. The Insured Person is entitled to reimbursement of expenses at the rate of the center or Rs. 123 per day, whichever is higher. Additionally, conveyance charges at normal rates or second-class railway/bus fare, as applicable, are reimbursed to attend such training programs.


 What benefits are provided to an employee after retirement?

An Insured Person who retires due to superannuation or opts for voluntary retirement or premature retirement, having been covered for a minimum of 5 years, is entitled to receive medical benefits for themselves and their spouse. To avail of this benefit, proof of retirement must be provided, and a nominal contribution of Rs. 120 for one year is required. In the unfortunate event of the insured person’s demise, their spouse continues to receive medical benefits under Rule 61 by paying the specified contribution mentioned above.


What is Medical Benefit?

Medical benefit refers to the provision of medical attendance and treatment to individuals covered under the Act, namely the insured persons and their families, whenever required. This benefit is provided in kind through the State Governments, including Model Hospitals operated by the ESI Corporation (excluding Delhi). It is uniformly extended to all, irrespective of their wages and contributions, based on their individual needs.


How long is medical benefit available?

The insured person and their family have access to Medical Benefits from the very first day of joining insurable employment. A person newly covered under the scheme is eligible for primary and secondary medical care for themselves and their family for an initial three-month period. If the individual remains in insurable employment for three months or more, the benefit continues until the start of the corresponding benefit period.

Additionally, if the insured person has been under ESI coverage for at least 2 years from the date of Online Registration, contributed for not less than 156 days, and is eligible for Sickness Benefit for any one contribution period while suffering from one of the 34 specified long-term diseases, medical benefits are provided until the incapacity lasts or up to 730 days within a 3-year period for self and family.

Furthermore, if the insured person has been in ESI coverage for at least 2 years from the date of Online Registration, contributed for not less than 156 days before the date of diagnosis, and is eligible for Sickness Benefit in at least two contribution periods, they, along with their family members, are eligible for super specialty treatment. This contributory condition does not apply in case of an accident involving the insured person or their family member for SST treatment.