Employees’ State Insurance Scheme of India,is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependants covered under the scheme.

The scheme was inaugurated in Kanpur on 24th February 1952. The comprehensive and multi-pronged social security programme is administered by an apex corporate body called the Employees' State Insurance Corporation.

Employees' State Insurance Act, 1948

The promulgation of Employees' State Insurance Act, 1948 (ESI Act), by the Parliament was the first major legislation on social Security for workers in independent India.

The ESI Act 1948, encompasses certain health related eventualities that the workers are generally exposed to; such as sickness, maternity, temporary or permanent disablement, Occupational disease or death due to employment injury, resulting in loss of wages or earning capacity-total or partial. Social security provision made in the Act to counterbalance or negate the resulting physical or financial distress in such contingencies, are thus, aimed at upholding human dignity in times of crises through protection from deprivation, destitution and social degradation while enabling the society the retention and continuity of a socially useful and productive manpower.

Coverage

Applicability

Areas covered
The ESI Scheme is now notified in 611 Districts in 36 States and Union Territories (except Lakshadweep Island), which include 503 complete District, 108 partially notified districts where scheme is notified in Districts Headquarters Area & in Prominent Industrial Centers Under Section 1(3) of ESI Act, 1948.

To view the list of notified districts, click here.

ESIC beneficiaries to get medical care from nearby ESIC empanelled Hospitals

Keeping in view the sizeable increase in the number of ESI beneficiaries subsequent to expansion of ESI Scheme in newer geographical areas, efforts are constantly being made to strengthen the ESI medical care infrastructure to provide better medical services in the vicinity of beneficiaries' residence.

To ease the hardship being faced by ESI Beneficiaries in availing medical services in case of non-availability of ESIC's Health Care infrastructure i.e. Hospital or Dispensary or Insured Medical Practitioner (IMP) within a radius of 10 KM of their residences, such ESI beneficiaries can now avail medical care services from nearby ESIC empanelled hospitals (pan-India) without the need for any referral from an ESI dispensary or hospital.

To avail medical services in such areas, the ESI beneficiaries of such areas may visit the ESI empanelled hospital with ESI e-pehchan Card/Health Passbook along with Aadhar/Govt. issued Identity Card and avail cashless medical consultation for OPD services directly from such hospital. Such beneficiaries may seek reimbursement of purchased medicines prescribed during OPD consultation through nearest Dispensary cum Branch Office (DCBO) or Regional Office of ESIC where DCBO is not available.

In cases where investigation or admission for indoor treatment is required, the empanelled hospital will obtain the permission from the ESI approving authority through an online system within 24 hours and provide cashless treatment to the beneficiary.

To view the copy of the guidelines issued by the ESIC Hqrs. click here.

To view the list of empanelled hospitals, click here.

Finance

ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages.

As of now, covered employees contribute 0.75% of the wages, whereas, the employers contribute 3.25% of the wages, payable to their employees. Employees earning upto Rs.176/- a day are exempted from payment of their share of contribution.
The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per capita ceiling of Rs. 1500/- per Insured Person per annum. Any additional expenditure incurred by the State Governments, over and above the ceiling and not falling within the shareable pool, is borne by the State Governments concerned.

Contribution

E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in respect of an employee shall comprise of employer's contribution and employee's contribution at a specified rate. The rates are revised from time to time.

Currently, the employee's contribution rate (w.e.f. 01.07.2019) is 0.75% of the wages and that of employer's is 3.25% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage upto Rs.176/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.

Collection of Contribution

An employer is liable to pay his contribution in respect of every employee and deduct employees contribution from wages bill and shall pay these contributions at the above specified rates to the Corporation within 15 days of the last day of the Calendar month in which the contributions fall due. The Corporation has authorized designated branches of the State Bank of India and some other banks to receive the payments on its behalf.

Contribution Period and Benefit Period

There are two contribution periods each of six months duration and two corresponding benefit periods also of six months duration as under.

Contribution period Corresponding Cash Benefit period

Contribution Period	Cash Benefit Period
1st April to 30th Sept.	1st Jan of the following year to 30th June
1st Oct to 31st March of the year following.	1st July to 31st December.

Benefits

Salient Features of Benefits of ESI Scheme

All types of employees covered-regular, contractual, casual, temporary
Admissible from day one of the employment.
No medical examination necessary for registration.
No upper age limit for coverage.
Can avail primary, secondary and super-specialty treatment in respect of self/family.
No ceiling on medical expenses. •Medical Benefit to retired I.P. and Spouse for Rs.10/- per month.
Commuting accidents treated as employment injury.

The section 46 of the Act envisages following six social security benefits :-

Medical Benefit : Full medical care is provided to an Insured person and his family members from the day he enters insurable employment. There is no ceiling on expenditure on the treatment of an Insured Person or his family member. Medical care is also provided to retired and permanently disabled insured persons and their spouses on payment of a token annual premium of Rs.120/- .
Sickness Benefit (SB) : Sickness Benefit in the form of cash compensation at the rate of 70 per cent of wages is payable to insured workers during the periods of certified sickness for a maximum of 91 days in a year. In order to qualify for sickness benefit the insured worker is required to contribute for 78 days in a contribution period of 6 months.

Extended Sickness Benefit (ESB): SB extendable upto two years in the case of 34 malignant and long-term diseases at an enhanced rate of 80 per cent of wages.
Enhanced Sickness Benefit : Enhanced Sickness Benefit equal to full wage is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively.

Maternity Benefit (MB) : Maternity Benefit for confinement/pregnancy is payable for Twenty Six (26) weeks, which is extendable by further one month on medical advice at the rate of full wage subject to contribution for 70 days in the preceding Two Contribution Periods.
Disablement Benefit
- Temporary disablement benefit (TDB) : From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues.
- Permanent disablement benefit (PDB): The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board
Dependants Benefit (DB) : DB paid at the rate of 90% of wage in the form of monthly payment to the dependants of a deceased Insured person in cases where death occurs due to employment injury or occupational hazards.
Other Benefits :
- Funeral Expenses : An amount of Rs.15,000/- is payable to the dependents or to the person who performs last rites from day one of entering insurable employment.
- Confinement Expenses : An Insured Women or an I.P. in respect of his wife in case confinement occurs at a place where necessary medical facilities under ESI Scheme are not available.

In addition, the scheme also provides some other need based benefits to insured workers.

Vocational Rehabilitation :To permanently disabled Insured Person for undergoing VR Training at VRS.
Physical Rehabilitation : In case of physical disablement due to employment injury.
Rajiv Gandhi Shramik Kalyan Yojana : This scheme of Unemployment allowance was introduced w.e.f. 01-04-2005. An Insured Person who become unemployed after being insured three or more years, due to closure of factory/establishment, retrenchment or permanent invalidity are entitled to :-
- Unemployment Allowance equal to 50% of wage for a maximum period of upto Two Years.
- Medical care for self and family from ESI Hospitals/Dispensaries during the period IP receives unemployment allowance.
- Vocational Training provided for upgrading skills - Expenditure on fee/travelling allowance borne by ESIC.
Atal Beemit Vyakti Kalyan Yojana (ABVKY) :
- This scheme is a welfare measure for employees covered under Section 2(9) of ESI Act, 1948, in the form of relief payment upto 90 days, once in a lifetime.
- The Scheme was introduced w.e.f. 01-07-2018 on pilot basis for a period of two years initially. The scheme has now been extended upto 30 June 2022.
- It has also been decided to enhance the rate of unemployment relief under the scheme to 50% of wages from earlier rate of 25% along with relaxation in eligibility conditions, provided the Insured Person should have been in insurable employment for a minimum period of one year immediately before her/his unemployment and should have contributed for not less than 78 days in the completed contribution period in 12 months immediately prior to unemployment.
- In a significant relaxation, relief shall become due for payment after 30 days from date of unemployment and claim can be submitted directly to the designated ESIC Branch Office by the worker.
- Claims to get the relief can be made online at https://www.esic.gov.in/ along with submission of the physical claim with an affidavit, photocopy of Aadhaar Card and Bank Account details to the designated ESIC Branch Office by post or in person.
Incentive to employers in the Private Sector for providing regular employment to the persons with disability :
- Minimum wage limit for Physically Disabled Persons for availing ESIC Benefits is Rs 25,000/-.
- Employerss' contribution is paid by the Central Government for 3 years.

Convergence between ESIC and AB PM-JAY

The Employees’ State Insurance Corporation (ESIC) has entered into a partnership with National Health Authority (NHA). This convergence between Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) and Employees’ State Insurance Scheme (ESIS) will create an ecosystem wherein ESI beneficiaries will be able to access services at ABPM-JAY empanelled Hospitals and vice versa.

In the initial phase, a pilot was conducted in Ahmednagar, Maharashtra and Bidar, Karnataka wherein ESI beneficiaries of these districts got access to medical care services in PM-JAY empanelled hospitals.

On successful completion of this pilot project, the convergence of ESI Scheme with PM-JAY has been extended to 113 designated districts of 04 States i.e. Chhattisgarh, Karnataka, Madhya Pradesh and Maharashtra. ESI beneficiaries of these 113 designated districts will be able to access medical care services in PM-JAY empaneled hospitals. They can avail secondary and tertiary care from the PM-JAY empanelled hospitals without any ceiling.

To know the designated districts and PM-JAY empaneled hospitals, click here.

Source : Employees’ State Insurance Scheme of India

Related resources

FAQs on ESI scheme