What is ESIC?
ESIC (Employees’ State Insurance Corporation) is an autonomous organization under Ministry of Labor and Employment, India, that is responsible for managing the Employees’ State Insurance (ESI) scheme. ESIC is a statutory body that administers the ESIC scheme. It is a social security scheme offered by the government of India to provide socio-economic protection to employees.
It aims to protect them by providing medical care and health benefits for injury, sickness, maternity, and death. As it is a self-financing scheme, employees who make regular contributions to the scheme from their wages can avail themselves of these benefits. The fixed contribution rate for ESIC is 0.75% of an employee’s wages and the employers’ contribution is 3.25%. Medical care is provided to insured employees and their families.
All factories and organizations covered under the Employees’ State Insurance Act, that employ more than 10 employees and pay wages of Rs.21,000 must enroll with the ESIC and contribute regularly. Employees earning less than Rs.137 per day as daily wages are exempt from this scheme.
What is Employees State Insurance Act, 1948?
The Employee State Insurance Act, 1948 is a law that provides social security. In 1943, Professor B.P. Adarkar was appointed by the government to create a report on industrial workers’ health insurance scheme. This report became the foundation for the ESI Act.
This Act visualized a social insurance scheme that would protect workers in the eventuality of sickness, maternity, disablement, injury, and death which can take away the earning capacity of workers. It also covered insurance to the workers’ immediate family members. Following the declaration of the ESI Act, the Central Government established the ESIC, and it became applicable to not only factory workers but all establishments covered by the Act.
What are the benefits of ESI?
Employees’ State Insurance offers 6 main benefits to employees who enrolled with the ESIC and make monthly contributions. Under section 46 of the ESI Act, the 6 benefits of ESI are:
1. Sickness benefit
Sickness benefit is 70% of a worker’s wages. Insured employees can draw this compensation benefit if they fall sick, and it covers 91 days (about 3 months) in a year. To use this benefit, a worker must have worked for 78 days during the contributing period.
Extended sickness benefit: Sickness benefits can be extended up to 2 years at an increased contribution rate of 80% which is applicable for 38 long-term diseases.
Enhanced sickness benefit: The above rate is enhanced to 100% if the insured employee is undergoing sterilization for family planning up to 7 days for Vasectomy and 14 days for Tubectomy.
2. Disablement benefit
Disablement benefit can be divided into:
Temporary disablement: For temporary disablement, ESIC provides monthly compensation until the injury lasts. The contribution rate is 90% of a person’s wages. Employees can claim this benefit even if they haven’t made their contribution.
Permanent disablement: For permanent disablement, the Medical Board determines the compensation amount depending on the extent of the injury/disability.
3. Maternity benefit
Maternity benefit is payable for 26 weeks of pregnancy. This period can be extended by a month at the rate of full wages, considering that the person has contributed for 70 days.
4. Medical benefit
There is no limit on expenditure on the medical treatment of the insured employee. This benefit is extended to the insured’s immediate family members. Medical care is also provided to retired employees or those who are permanently disabled on an annual premium of Rs.120.
5. Dependents’ benefit
This compensation is made to the deceased employees’ dependents in cases where the death occurs due to employment injury or work hazards.
6. Other benefits
Other benefits include the following:
i) Funeral expenses
This compensation is made to the deceased’s dependents or the person who is responsible for performing the last rites. The amount of compensation payable is Rs.15,000.
ii) Confinement expenses
If the confinement occurs in a place where the necessary medical facilities listed under the ESI scheme are not available, then an amount is payable to the insured woman or person.
iii) Vocational and physical rehabilitation
Vocational rehabilitation benefits are provided to those insured employees who are permanently disabled and are undergoing rehabilitation training. Physical rehabilitation refers to the case of physical disablement due to injury at the workplace.
iv) Old age medical care
Employees who are retiring due to old age/infirmity, under Voluntary Retirement Scheme, and unemployment due to permanent injury, can claim this benefit. The compensation amount in this benefit is Rs.120 per month.
When is ESI Registration Required?
Factories or any other establishments in Indian states and UTs that are listed under the ESIC Act, 1948 and employ more than 10 workers must enroll themselves for the ESI scheme. Also, those in Maharashtra, Chandigarh, and other states covered by the ESIC, employing 20 employees must register for ESI scheme.
This scheme does not apply to those who earn more than Rs.21,000 and is applicable to workers earning below Rs.21,000 per month and must compulsorily register itself with ESIC. In the case of workers with temporary or permanent disability, the maximum wage limit is Rs.25,000.
This scheme is also not applicable to workers whose daily wages are under Rs.137. However, an employer’s contribution backs up such wages. The revised employee’s contribution is 0.75% of their wages and for employer’s it is 3.25%
How to apply for ESI registration?
Entities must register themselves within 15 days from the date of applicability. For eligible entities, it is mandatory to apply. There are two modes of registration: manual and online. The registration for ESIC has completely shifted online. It does not require any submission of physical documents before or after registration.
Following are the steps to register any establishment with the ESIC:
Step 1: Go to the ESIC official website click on the sign-up option
Step 2: Enter the following details:
- Company name
- Employer name
- State and region
- Email address (will be the username)
- Contact details
Step 3: Click on the checkbox and tap on submit
Step 4: Check the email from ESIC enclosing the username and password
Step 5: Visit the ESIC website and enter the username and password details
Step 6: Click on ‘New Employer Registration,’ and select the type of unit
Step 7: On the new page, enter the name of the unit along with the necessary postal addresses
Step 8: Enter if the building is owned/hired, nature of business, PAN, and other details before clicking on ‘Next’
Step 9: On the next page, enter information related to commencement of factory, license, constitution, owners and their designations, and click on ‘Next’
Step 10: Enter the total number of employees working and those earning less than Rs.21,000 and date of joining of the first 10 or 20 employees. Click on ‘Employee Declaration Form’
Step 11: Select employees who are and are not registered, then click on ‘Continue’
Step 12: Enter the information of IP and click on submit.
Step 13: Confirm that all details have been entered and click on ‘Close’
Step 14: On the new page, select the ESI branch office and inspection division and click on the checkbox to confirm that all information entered is correct
Step 15: Click on ‘Pay Initial Contribution’ before clicking on ‘Submit.’ Save the challan number for future reference and click on ‘Continue’ to complete the payment process
Once the payment has been completed, the system generated ESI Registration Letter, or C-11, will act as proof of registration of the company with the ESIC.
What are the documents required for ESIC Registration?
To register an account with the ESIC, establishments will have to provide 11 basic documents which are mentioned below:
- Articles of Association and Memorandum of Association of the company
- Certificate of Registration issued under Factories Act or Shops and Establishment Act
- Registration certification in case of a company, partnership deed, or LLP
- List of all employees working under the employment contract of the company/factory along with their details
- Compensation and attendance details of the employees
- Company’s and employees’ PAN details
- Copy of GST registration license
- Cancelled cheque of the company
- List of existing shareholders and directors of the company
- Digital signatures and contact details of directors, partners, or proprietors as required
- Employer’s Registration Form to be filled and uploaded on the ESIC website
Who is eligible for ESI?
Entities that employ 10 workers (or 20 in some states) and come under the ESIC Act are eligible for ESI. Employees who earn more than Rs.21,000 are not eligible for ESI. For workers with disabilities, the earning limit is Rs.25,000.
Who is not eligible for the scheme?
Factories, companies, and other establishments that employ less than 10 or 20 workers are not eligible for the ESIC scheme. Also, employees who earn more than Rs.21,000 are also not eligible. Workers with disabilities and earnings above Rs.25,000 are not eligible for this scheme as well.
ESIC Contribution Rates
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What is ESI Card (Pehchan Card)?
The ESI or Pehchan card is a health card given to the insured person enrolled under the ESI scheme. The insured person can claim benefits covered under the scheme at ESI network hospitals by presenting this card. He is given two cards, one for himself and another for his dependents. A physical copy of the ESI card is necessary to claim the medical facilities at the hospitals. This card is secured by biometric authentication, removing any need for worry.
This card contains the details provided by the employer at the time of registration. It includes the name, photograph, address, and other relevant information. To obtain an ESI card, employers must generate an Employee Insurance Number which is a 10-digit code, with the first two digits being the region code and the last 8 digits being Insurance/employee code, which is provided after registration.
How to apply for ESI Card?
Entities can apply for the ESI card online after registering with the ESI scheme. The steps are:
Step 1: Log into the ESIC portal
Step 2: Click the ‘Employee’ tab option and under it click on the ‘E-Pehchan Card’
Step 3: Enter the ‘Employee Insurance Number’ and click on ‘View’
Step 4: View the IP’s (Insured Person) details and click on ‘View Counter Foil’ under ‘Registration Employees Details’
Step 5: Take a printout of the counterfoil of the E-Pehchaan card
How to check ESIC balance?
Users can check their ESIC balance by visiting the official website and logging in. An employee doesn’t have to register again when changing companies but can have his contribution details changed as per the new company. This balance can be viewed under the contribution details on the page.
What is the eligibility for claiming ESI Benefits?
To claim ESI benefits, an employee must have been registered with the ESIC scheme. The employee must be earning not more than Rs.21,000
When to claim it?
ESI benefits can be claimed on the event of sickness, injury, maternity, disablement, or death. They cannot be claimed before the incident.
How to claim it?
ESI benefits, whether medical or compensation, can be claimed by visiting any of the ESI network hospitals. Compensation or cash benefits can be claimed in the case of sickness, injury, etc. A Pehchan card can be used to avail the benefits. The procedure to claim medical benefits requires the submission of claim bills, claim statement forms, and other documents.
What are the important ESI Benefit Claim Forms?
ESI benefit forms are used to claim medical or cash benefits. Some of the important ESI benefit claim forms are:
- ESIC Form-9 for claim for sickness, temporary disablement, and maternity
- Form-14 for permanent disablement
- Form-15 for dependent benefit by ESIC
- Form-16 for periodical payment of dependent benefits
- ESIC form-19 for maternity benefit and work notice
- ESIC form-20 for maternity benefit after the death of an insured woman and leaving a child behind
- Form-22 to claim funeral expenses of the insured
- Form-23 for life certificate for permanent disablement
- ESIC form-142 to claim for compensation for loss of wages or conveyance allowance
ESI Head Office and Contact Details
Address: Panchdeep Bhawan, Comrade Indrajeet Gupta Marg, New Delhi
Email: firstname.lastname@example.org (for suggestions/issues) or email@example.com (for IT issues)
Phone Numbers: 011-23234092, 23234093, 23235496, 23234098, 23236051, 23236998, 23235187
Toll Free Numbers: 1800-11-3839
Frequently Asked Questions (FAQs)
Is ESIC compulsory for all employees?
If the establishment has more than 10 or 20 employees who are earning less than Rs.21,000 it is compulsory to enroll with the ESIC.
Who fixes the rate of contribution for the ESI scheme?
The Government of India fixes the rate of contribution for the ESI scheme. These rates are periodically revised.
What Hospital are covered under Employees State Insurance Scheme?
Hospitals that have a tie-up with ESI scheme vary according to the State, city, and locality of the establishment.
What are the other Government Schemes Working in Conjunction with ESI Scheme?
The other Government schemes working in conjunction with the ESIC scheme are – Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) and Atal Beemit Vyakti Kalyan Yojana (ABVKY).
Should employers register under the ESI scheme?
Employers who are covered under the ESI Act have to register under the ESI scheme compulsorily. The employer should opt for the ESIC registration and then register every eligible employee.
What types of establishments can avail the ESI scheme?
The establishments that can avail the ESI scheme are:
- Hotels/restaurants (only engaged in sales)
- Cinemas and preview theatres
- Road motor transport
- Newspaper establishments that are not covered as a factory
- Private educational institutions and medical institutions
Which allowance is exempt from ESIC?
Conveyance allowance is exempt from ESIC. It is offered to employees to compensate for the travel from their residence to and from the workplace. The government of India held that conveyance allowance does not fall under the definition of wages and should not be taken into consideration for ESI.