- Employees’ State Insurance (ESI) Scheme
Employees’ State Insurance (ESI) Scheme
Focus: Government policies and interventions
Why in News?
16.03 lakh new employees have been added in Employees’ State Insurance Scheme (ESI Scheme) in the month of February, 2023, as per provisional payroll data released by Employees’ State Insurance Corporation (ESIC).
Employees’ State Insurance (ESI) Scheme
- The ESI scheme is a self-financed comprehensive social security scheme devised to protect the employees covered under the scheme against financial distress arising out of events of sickness, disablement or death due to employment injuries.
- The ESI Scheme is financed by contributions from employers and employees.
- The Employees’ State Insurance Scheme is an integrated measure of Social Insurance embodied in the Employees’ State Insurance (ESI) Act, 1948.
- The ESI Scheme applies to factories and other establishment’s viz. Road Transport, Hotels, Restaurants, Cinemas, Newspaper, Shops, and Educational/Medical Institutions wherein 10 or more persons are employed. (However, in some States threshold limit for coverage of establishments is still 20.)
- Employees of the aforesaid categories of factories and establishments, drawing wages upto Rs.15,000/- a month, are entitled to social security cover under the ESI Act.
- ESI Corporation has also decided to enhance wage ceiling for coverage of employees under the ESI Act from Rs.15,000/- to Rs.21,000/-.
Features and Benefits of the ESI scheme
Broadly, the benefits under this scheme are categorized under two categories:
- Cash benefits (which includes sickness, maternity, disablement (temporary and permanent), funeral expenses, rehabilitation allowance, vocational rehabilitation and medical bonus) and,
- Non-cash benefits through medical care.
Complete medical care and attention are provided by the scheme to the employee registered under the ESI Act, 1948 at the time of his incapacity, restoration of his health and working capacity.
- During absenteeism from work due to illness, maternity or factories accidents which result in loss of wages complete financial assistance is provided to the employees to compensate for the wage loss.
- The scheme provides medical care to family members also.
Benefits under ESI Act
- Medical benefit
- Sickness benefit
- Maternity benefit
- Disablement benefit
- Dependants benefit
- Funeral expenses
- Rehabilitation allowance
Employee’s State Insurance Corporation (ESIC)
- Employee’s State Insurance Corporation (ESIC) is a Statutory Body set up under the Employees’ State Insurance (ESI) Act, 1948, which is responsible for the administration of ESI Scheme.
- As it is a legal entity, the corporation can raise loans and take measures for discharging such loans with the prior sanction of the central government and it can acquire both movable and immovable property and all incomes from the property shall vest with the corporation.
- The corporation can set up hospitals either independently or in collaboration with state government or other private entities, but most of the dispensaries and hospitals are run by concerned state governments.
Challenges with Implementation of the ESI Scheme
- If ESI coverage has to be extended all over India, at least one ESI dispensary per district is required and several model ESIC hospitals in every state. In the entire Northeast India, there are only ten ESIC dispensaries and only one ESIC Model Hospital in Guwahati, Assam.
- There is a need for ESIC to strengthen the tie-ups with private hospitals for super-speciality services by ensuring that the private hospital bills are settled promptly so that the ESI beneficiaries can continue to get hassle-free service.
ESIC has massive surplus in its reserve funds which can be used to:
- Establish new medical infrastructure
- Upgrade the current medical infrastructure
- Improve the services provided to the increasing number of beneficiaries.