Employees State Insurance Act 1948 Overview

Employees State Insurance Act 1948

• The ESI Act of 1948, amended through the years (1975, 1984, 1989, 2010, 2019, and 2022), is a crucial social security and health insurance measure in India.
• It provides cash and medical benefits for industrial employees facing sickness, maternity, or work-related injuries.
• The Act's scope covers the entire nation.
• Initially, the Act covered power-using factories employing 10 or more people, excluding mines, railways, and defense establishments.
• Later amendments broadened coverage to include smaller factories, shops, hotels, restaurants, cinemas, theaters, road transport establishments, newspapers, and private medical/educational institutions employing 20 or more people in some states.
• Effective May 1, 2010, the Act now covers all employees, including manual, clerical, supervisory, and technical staff earning up to 15,000 rupees per month (revised to 21,000 rupees/month as of September 6, 2016).
• The ESI Act can be extended to other agricultural or commercial enterprises.

ESI Act Administration

• The ESI scheme's governance is administered by an autonomous body called the ESI Corporation.
• The Union Minister of Labour is the chairman, with the Secretary to the Government of India's Ministry of Labour as vice-chairman.
• The corporation includes members representing: central and state governments, employers, employee organizations, medical professionals, and parliament.
• A Standing Committee, a part of the Corporation, oversees the scheme's implementation.
• The chief executive of the Corporation is the Director General, supported by four Principal Officers: insurance, medical, finance, and actuary commissioners.
• The Medical Benefit Council, headed by the Director General of Health Services, coordinates medical assistance. The council gets support from the Medical Commissioner.
• The corporation has 24 regional offices, 39 sub-regional offices, one divisional office, 2 camp offices, and 592 branch offices.

ESI Act Finance

• The ESI scheme operates through employee and employer contributions, along with government grants.
• Employers contribute 3.25% of the total wage bill.
• Employees contribute 0.75% of their wages.
• Employees earning less than 176 rupees daily are exempt from employee contributions.
• The state government contributes 1/8th of the total medical care cost.
• The ESI corporation's share is 7/8th of the total medical care cost.

Benefits to Employees

• The act covers benefits to insured workers and their dependents.
• These benefits encompass various aspects, including: medical, sickness, maternity, disability, dependent, funeral, and rehabilitation.

I. Medical Benefit

• This benefit provides comprehensive medical care for insured individuals in case of sickness, injuries, and pregnancy-related needs.
• Services include: outpatient care, drug and dressing provisions, radiological investigations, antenatal, natal, and postnatal care, family planning services, ambulance services, in-patient treatment, and institutional treatment and services.
• Insured individuals with complex needs may receive treatment outside their state at ESI's expense.
• Medical care can be received directly from ESI hospitals or dispensaries, or through registered medical practitioners via the insurance panel or through established dispensaries.

2. Sickness Benefit

• This involves periodic cash payments for sickness.
• Eligibility is determined by a medical officer's assessment.
• The duration for sickness benefits is 91 days, with about 70% of the average daily wages payable during a 365-day period. Contributory requirement: 78 days in a 6-month period qualify for pay. Long-term illness benefits may be extended for up to two years.
• Additionally, the Act provides extended sickness benefits for specific diseases, including various infectious diseases, neoplasms/malignant diseases, endocrine/metabolic disorders, and nervous system disorders.

3. Maternity Benefit

• Insured women can get cash benefits during confinement; miscarriage, sickness during pregnancy, childbirth, or miscarriage.
• The confinement period is for 26 weeks, with a 6-week extension for miscarriages and additional, related sickness of 30 days.
• All benefits are paid at the employee's usual wage rate.
• Confinement expenses have increased to Rs 5000 to Rs 7500 per confinement.

4. Disablement Benefit

• Temporary or permanent disablement due to injury or illness, including occupational disease, triggers cash payments.
• Temporary disablement benefit is 90% of the wage, continuing until recovery.
• Permanent disablement is covered by a lifetime pension calculated based on earning capacity assessments by a medical board.

5. Dependent's Benefit

• In case of death or employment injury, the dependents of insured individuals are eligible for regular payments.
• Payments are split among dependents according to a fixed ratio.
• An eligible son or daughter can receive benefits until the age of 18 (or if the daughter marries earlier).

6. Funeral Expenses

• Funeral expenses are covered up to a maximum of Rs 15,000 in cash.

7. Rehabilitation

• Monthly payments of Rs. 10 are offered to insured persons and their families for continued medical treatment after permanent disablement or retirement.
• The ESI scheme is operational throughout 35 states and union territories.

Benefits to Employers

• Employers receive various benefits, including exemption from workmen's compensation law, maternity benefit, medical allowance, rebates on income tax for contributions, and a healthier workforce.

Rajiv Gandhi Shramik Kalyan Yojana

• The Rajiv Gandhi Shramik Kalyan Yojana was launched on April 1, 2005, and is a part of the ESI.
• It offers unemployment allowances to employees rendered jobless due to retrenchment.
• Employees meet eligibility requirements (e.g., two years of contribution). Unemployment allowances are equal to 50% of a worker's wage and maximum payout is up to two years per person.
• Medical care is also available during unemployment from the same ESI scheme clinics and hospitals.