Employees’ State Insurance Scheme

Employees' State Insurance (ESI) is a multidimensional social security scheme offered by the Government of India as per the Employees' State Insurance Act, 1948. The Employees' State Insurance Corporation (ESIC) is a government organisation that manages this scheme. It provides medical and financial assistance to employees and their families. The assistance is provided when an employee is unable to execute their duties due to sickness, employment injury, or maternity. ESIS is a self-financing scheme wherein the employers and the employees make regular monthly contributions to the scheme at a particular percentage of their wages.

The Employees' State Insurance Scheme (ESIS) is a self-financing scheme where the employees and the employers make regular monthly contributions to the scheme at a certain percentage of their wages. This scheme enables employees to negate the financial burden due to any unfortunate event. 

If you are curious to get down to the nitty-gritty of this government-sponsored insurance scheme, here are some significant features and benefits of the same:

• ESIS provides maternity cover for 26 weeks. Moreover, the cover can be expanded up to one month if wages are subjected to a contribution of 70 days.
• Beneficiaries are offered payment in instalments during unfortunate events.
• It offers three years of coverage to an unemployed member. However, it is possible only when the member discloses critical details like permanent invalidity and previous workplace.
• It supplies 90% of the employee's wage when an individual becomes temporarily or permanently disabled.
• Complete medical care and attention are provided to an employee registered under the Employees' State Insurance Act, 1948, at the time of their incapacity and restoration of health.
• The Employee State Insurance Scheme aims to provide coverage to all workers with a monthly payment of less than or equal to Rs. 21,000. 
• The insurer and their dependent members can avail of healthcare benefits against specific illnesses. 
• The current contribution rate for employers is 3.25%, and for employees, it is 0.75% of the payable wages. The government reduced the total contribution from 6.5% to 4% in 2019. Note that workers with daily wages worth less than Rs. 137 are exempted from paying their share.

With effect from 1st January 2017, the monthly wage limit for employees' coverage is Rs. 21,000 per month. It is the employer's obligation to enrol eligible employees in the ESIC program. The contributions are based on the employees' earning ability as a fixed proportion of their salary, yet they are granted social security benefits based on individual requirements without discrimination.

The procedure for ESI registration by employers is done entirely online and does not require submitting a physical application in the registration process. Below are the steps to register your organisation or establishment with the ESIC:

• From the official ESIC portal, download Form No.1 (Employers Registration Form) in PDF and fill in the necessary details.
• You will receive a confirmation mail on your registered e-mail ID containing username and password details.
• Log in to the ESIC portal using your username and password and click on 'New Employer Registration.' From the drop-down menu, choose a 'Type of Unit', then Submit it.
• Fill in the 'Employer Registration Form No. 1' with all mandatory documents.
• After being redirected to a page titled 'Payment of Advance Contribution,' enter the amount for six months' advance contribution and choose the preferred payment mode.
• Post-completion of payment, you will be given a Registration Letter (C-11) containing a 17-digit ESIC registration number.

Before proceeding with online registration under ESIC, keep the following documents handy:

• Registration certificate or licence under the Shops and Establishment Act or Factory Act.
• Certificate of Registration for Private Limited Companies and Partnership deeds for partnership firms.
• Memorandum of Association and Articles of Association of the company.
• List of all workers along with details of their monthly compensation.
• Address proof and PAN card of all employees and the business entity. 

After successful enrolment, each worker receives an ESI card or Pehchan card, which they need to produce every time they want to avail of this scheme's benefits against medical treatments.

The ESI card or Pehchan card is a health card given to the insured person enrolled under the ESI scheme. The employees covered under the scheme can claim sickness and medical benefits at the ESI network hospitals or dispensaries by showing the ESI card or E-Pehchan card. The benefits provided under the ESI scheme are in the form of coverage for the medical expenses of the insured person or beneficiaries and their dependents.

The process to obtain the ESI card (Pehchan card) from the ESIC when a worker is enrolled under the ESI scheme is as follows:

The card includes details like the beneficiaries name, father's name, address and a unique ESI insurance number. It also includes the insured's photograph and their dependent's information.

To download the ESI card (Pehchan card), the employer must log into their account on the ESIC portal and fill in the respective employee details. On completion, the ESIC will issue a magnetic smart card to either the employee's address, or they may need to visit the ESIC branch to collect it.

As a beneficiary of ESIS, you should be aware of the following essential dos and don'ts:

• While switching from one organisation to another, ensure that your new employer is informed about your ESI Registration Number. That way, you can continue to enjoy its benefits.
• Ensure that you don't damage or lose the Pehchan Card, as it serves the purpose of social security.
• If the card is lost, you or any dependents must immediately report the loss at the nearest Branch Office or Dispensary.
• ESI Card/Pehchan Card or e-Pehchan Card is required to avail of services at ESI hospitals and dispensaries.
• Follow the doctor's instructions strictly.