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  • Writer's pictureDhruv Parikh

ESIC – Government scheme for unemployment and other medical benefits

Updated: Jul 25, 2022

In tough times like the ongoing COVID-19 pandemic, social security schemes of the government are of a great help to the ones impacted. In continuation of our previous article on EDLI – insurance for the deceased person’s family, this article highlights the benefits of Employees’ State Insurance Corporation (ESIC) which can be claimed by the Insured Persons (IPs) of the covered organization.

ESIC is currently applicable in certain districts of India. The government plans to roll out the benefits to the entire country very soon. Under this scheme, 4% of the Gross salary of the employee is paid to the ESIC authority every month. Of this, 0.75% is contributed by the employee and 3.25% is contributed by the employer. It is applicable to employees with up to Rs. 21,000 of Gross salary. It is mandatory for all organizations with 10 or more employees to contribute to ESIC in the covered areas. By paying this amount, the employee (a.k.a. Insured Person) is eligible for a host of social security benefits.

COVID-19 benefits of the ESIC scheme are:

  • ESIC subscribers who lost their job due to the COVID-19 situation can claim unemployment relief of 50% of wawges under the Atal Beemit Kalyan Yojana.

  • The IP and the family members can avail free medical care at any of the COVID-19 dedicated ESIC/ESIS hospital if they are infected.

  • 20% of the beds in these hospitals have been reserved for ESIC covered IPs

  • Emergency Medical treatment can also be availed from tie-up hospitals by IP in accordance to the entitlement.

  • If the IP or their family members take COVID-19 treatment in a private hospital, reimbursement can be claimed up to the allowed limit.

The general benefits of ESIC scheme are:

  • Medical expenses: Reasonable cover for medical expenses at the ESI medical centres and other permitted centres for the IP and family members from the date of employment.

  • Sickness Benefit (SB): At the time of taking medical leaves, 70% of the average daily wages of an employee are paid for a maximum period of 91 days in two successive benefit periods.

  • Extended Sickness Benefit (ESB): SB is extendable up to 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 wages is payable to insured persons undergoing sterilization for 7 days/14 days for male and female workers respectively.

  • Maternity benefit: 100% of the average daily wages for a period of to 26 weeks from the time of going into labor and 6 weeks in case of a miscarriage. 12 weeks of pay is provided in the case of an adoption.

  • Confinement Expenses: A sum of Rs. 5,000/ is payable to an Insured Women or an respect of his wife in case confinement occurs at a place where necessary medical facilities under ESI Scheme are not available, however restricted to 2 confinements only.

  • Temporary disablement benefit (TDB): Temporary Disablement Benefit at the rate of 90% of wages is payable so long as disability continues. It is admissible from day one of entering insurable employment and irrespective of having paid any contribution in case of employment injury.

  • Permanent disablement benefit (PDB): The benefit is paid at the rate of 90% of wages in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board.

  • Dependents' Benefit (DB): DB is paid at the rate of 90% of wages in the form of monthly payment to the dependents of a deceased Insured person in cases where death occurs due to employment injury or occupational hazards.

  • Unemployment Allowance: ESI provides a monthly cash allowance for a maximum period of 24 months in case of permanent invalidity due to a non-employment injury or due to involuntary loss of employment.

  • Demise expenses: in the event of an unfortunate demise of the IP, the eldest surviving member of the family will be paid Rs. 15,000 for funeral expenses.

Employees' State Insurance Scheme is a unique and unparalleled Social Security Scheme. Unique and unparalleled because no Social Security Scheme in the world provides as many benefits as ESI Scheme in India. Hence, ESIC registration of the employees is recommended to all business owners, if not already taken.


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