The Power of ESI Ensuring Financial Security During Sickness, Maternity, and Disability

The Employees' State Insurance (ESI) scheme is a comprehensive social security and health insurance program designed to protect Indian workers from financial burdens arising from sickness, maternity, disability, and employment-related injuries. Established under the Employees' State Insurance Act of 1948, the scheme is managed by the Employees' State Insurance Corporation (ESIC) under the Ministry of Labour and Employment.

The Employees' State Insurance (ESI) scheme covers employees earning up to Rs 21000 per month in various sectors, including factories, shops, hotels, and educational institutions, where ten or more people are employed. It provides medical care, sickness benefits, maternity benefits, disability benefits, and funeral expenses. Employees contribute 0.75% of their wages, while employers contribute 3.25%. It was initially launched in Kanpur and Delhi in 1952; the scheme is now applicable across all states and union territories in India.

Sickness Benefits Under Employees' State Insurance (ESI) –

1. A sickness benefit is a monthly payment of cash to an Insure Person (IP) during a certified time of illness that occurs within a benefit period when the IP needs medical attention and must be absent from work due to medical reasons.
2. Certificates on Forms 7 and 8 are required for this ESI scheme.
3. The sickness benefit is paid for 91 days over the course of two consecutive benefit periods and is equivalent to 70% of the average daily earnings.

1. An IP must have made contributions for at least 78 days during the relevant contribution period in order to be eligible for Sickness Benefit.
2. A person must wait nine months after starting insurable employment for the first time before they are eligible for sickness benefits because their corresponding benefit term doesn't begin until after that time.
3. The first two days of a sick spell are not covered by sickness benefit unless the spell starts within 15 days of the end of the last spell for which sick benefit was last paid. The term "waiting period" refers to this two-day period.

Maternity Benefits Under Employees' State Insurance (ESI) –

Maternity benefit is payable to an Insured Woman in the following cases, subject to contributory conditions

1. When forms 17, 18, 19, 20, and 21 are produced, maternity benefits are paid for a maximum of 26 weeks up to two surviving children in the event of confinement, with no more than 8 weeks prior to the anticipated date of confinement.
2. Maternity payments are due to the insured woman who has two or more surviving children within twelve weeks, which must be no more than six weeks before the anticipated date of childbirth.
3. From the day the child is turned over, the commissioning mother or adopting mother is entitled to twelve weeks of maternity benefits under this ESI scheme.
4. Medical Termination of Pregnancy (MTP) or miscarriage: payable for six weeks (42 days) from the date of the miscarriage.
5. Pregnancy-related illnesses, confinement, and premature births are covered by Forms 7, 8, 9, and 10 for a maximum of one month.
6. If the insured woman passes away while in confinement and leaves a child behind, her nominee on production of Form 21.
7. Maternity benefit rate is 100% of average daily wages.

The ESI scheme provides comprehensive disability benefits to insured employees who suffer from disabilities due to employment injuries or occupational diseases. These benefits are designed to ensure financial stability for workers who are unable to work due to temporary or permanent disabilities.

1. When an employee is certified to be temporarily unable to work due to an occupational disease or employment injury (EI), they are eligible to receive TDB.
2. According to Section 2(8) of the Act, "Employment Injury" is defined as a personal injury to an employee resulting from an accident or occupational disease that occurs during the course of his employment while he is in an insurable position, regardless of whether the accident or occupational disease occurs inside or outside of India's borders.
3. Certificates Required for TDB Accident Report in Form 12, Form 7 & 8, and ESIC Med. 13.
4. TDB Rate is 90% of average daily wages under this ESI scheme.
5. For the duration of TDB, there is no set restriction. The reimbursement is due as long as there is a chance for a substantial improvement through therapy and the temporary disability persists. If otherwise qualified, IP will get sickness benefits if their temporary disability lasts less than three days (not including the day of the accident).

There are no contributing conditions attached to the benefit. As soon as an IP begins working at an insurable company, he qualifies.

1. An IP who experiences a loss of earning ability due to EI (including occupational diseases) and permanent residual disablement is eligible for PDB.
2. The Medical Board and the Special Medical Board for Occupational Diseases are the appropriate bodies to determine loss of earning ability in cases of injury.
3. PDB can last for the entire life if the evaluation is definitive, or for the time frame specified by the Medical Board if the assessment is provisional.
4. In respect to TDB, the PDB rate is determined as a percentage of the loss of earning capacity as determined by the Medical Board, MAT, and EI Court.
5. The 2nd Schedule to the ESIC Act of 1948 provides a preview of the list of injuries that are considered to cause permanent total disablement and a percentage loss of earning ability. As a result, PDB's maximum rate may match TDB's rate.
6. The ESIC periodically updates the PDB amount to account for inflation. The most recent improvement will take effect on September 13, 2019.
7. IP may request that their periodic PDB payments be converted into a lump sum if their PDB has been determined to be final and they have been awarded it at a rate of no more than Rs. 10 per day.
8. Age of an IP will have to be proved to the satisfaction of the Corporation in all cases.

Other Benefits Employees' State Insurance (ESI)

1. Vocational Rehabilitation Provides training to permanently disabled workers to enhance their employability in alternative roles..
2. Physical Rehabilitation Offers specialized care to support physical recovery and rehabilitation for injured workers..
3. Dependents’ Benefit Provides monthly financial assistance to dependents of an insured person who dies due to employment injury..
4. Funeral Expenses Covers funeral costs up to Rs 15000 to support families during difficult times..
5. Old Age Medical Care Offers annual financial assistance of ₹120 to insured workers and their spouses after retirement or permanent disability to meet medical expenses..

The ESI scheme is contributory in nature, meaning both employers and employees contribute to it. Here are the key aspects of the contribution requirements –

1. Currently, the employee's contribution rate is 0.75% of their wages, effective from July 1, 2019.
2. The employer's contribution rate is 3.25% of the wages payable to employees.
3. Employees earning a daily average wage up to ₹176 are exempt from paying their share of the contribution. However, employers must still contribute their share for these employees.
4. Employers are responsible for deducting employee contributions from wages and paying both employer and employee contributions to the ESIC within 15 days of the last day of the calendar month in which the contributions fall due.
5. There are two contribution periods each year, each lasting six months. These periods determine the eligibility for cash benefits.

The Employees' State Insurance (ESI) scheme plays a pivotal role in ensuring financial security for workers in India. By providing comprehensive health insurance and cash benefits during sickness, maternity, disability, and employment-related injuries, ESI helps protect workers from financial distress. The scheme's contributions from both employers and employees make it a self-financing model, allowing it to sustainably offer benefits without placing additional burdens on workers' savings or earnings. Need help with ESI registration? Contact our experts for hassle-free assistance!

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