Employees’ State Insurance is the full form of ESI. ESI Scheme is a type of social security scheme which benefits the Indian worker by providing them with self-financing health insurance.
The scheme is administered by an apex corporate body known as the Employees’ State Insurance Corporation (ESIC). It comprises members including employees, employers, the Central and State Government, representatives of Parliament and the medical profession. The Corporation is headed by the Union Minister of Labour, as its Chairman, Shri Santosh Kumar Gangwar.
ESI Full Form
The Corporation has it’s Central Headquarters located at New Delhi. 36 ESI Hospitals in various States, developed as ESIC Model Hospitals, falls under the administration of the Corporation.
B.N. Adarkar, an economist and former Governor of Reserve Bank of India, was appointed by the Government of India to create a health insurance scheme for industrial workers. His submitted report became the basis of Employment State Insurance Act of 1948 and in the year 1952, it was first established in Delhi and Kanpur.
The objective of ESI Act, 1948
The Act aims to provide benefit for medical treatment and sickness including maternity and disablement to the employees of factories and establishments and their dependents.
Benefits of ESI
The Act is meant to provide the 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, even after retirement, on payment of a token annual premium of Rs.120/-.
- Sickness Benefit (SB): Sickness Benefit is provided in the form of cash compensation at the rate of 70 per cent of wages payable to insured workers for a maximum of 91 days in a year during the periods of certified sickness.
- Maternity Benefit (MB): Maternity Benefit for pregnancy/ confinement is payable for 26 weeks, extendable up to one month on medical advice at the rate of full wage.
- Disablement Benefit: It includes both Temporary and permanent disablement benefits at the rate of 90% of the wage is payable as long as the disability continues.
- Dependants Benefit (DB): DB paid to the dependants of an Insured person in cases where death occurs due to occupational injury or hazards, at the rate of 90% of wage in the form of the monthly payment.
- Other Benefits:
- Funeral Expenses up to an amount of Rs.15,000/-
- Vocational Rehabilitation
- Physical Rehabilitation
- Age Medical Care
- Rajiv Gandhi Shramik Kalyan Yojana
- Atal Beemit Vyakti Kalyan Yojana
- The Act is applied to non-seasonal factories, Private Medical and Educational institutions, and other establishments employing 10 or more persons in certain States/UTs.
- Wage limit for coverage under the Act- Rs.21,000/- per month [Rs. 25,000/- per month for persons with a disability].
- Employee’s contribution rate – 0.75% of the wages
- Employer’s contribution rate – 3.25% of the wages payable in respect of the employees in every wage period.
- Employees earning a daily average wage up to Rs.176/- are exempted from payment of contribution.
The Employees’ State Insurance (full form of ESI) Scheme is applicable in 540 Districts in 34 States and Union Territories. The scheme is yet to be implemented in Arunachal Pradesh and Lakshadweep.