For a country like India that has an enormous working population, provision of social security and health related benefits through a public insurance scheme is both necessary and cost-effective. The Employee State Insurance Act, 1948 (ESI) was enacted to establish a framework for a self-financing social security scheme that provided workers with numerous benefits. The Act established a statutory body in the form of the Employee State Insurance Corporation (ESIC) that is responsible for the administration of the scheme. The ESIC is a body corporate that enjoys the status of an artificial juridical person under the Ministry of Labour and Employment. It is empowered to hold immovable/movable property, invest money, raise and discharge loans. Its primary function is to ensure that the monies remitted into the ESI fund by employers and employees alike is spent appropriately towards the purposes listed under Section-28 of the Act.
The Act is applicable to all factories whether private or state-owned but does not apply to seasonal factories. All employees in factories or establishments covered by the enactment shall be insured. Currently, contributions payable under the act on behalf of employees is at the rate of 0.75% of gross wages and 3.25% of gross wages on behalf of the employer. These contributions are towards the ESI fund and are used to provide insured employees with medical, sickness, maternity, disablement, dependants benefits as well as funds for funeral expenses and rehabilitation allowances. The Act also imposes an obligation on employers to pay contributions in a timely manner, furnish returns and maintain registers that contain details relating to the same.
Sickness benefit is provided for under Section-49 of the Act and vests the power in the Central Government to describe the conditions subject to which such benefit may be given as well as the rate and period thereof. It is provided in the form of periodical cash payments to an insured person during the period of certified illness occurring in a benefit period. This can be described as a period during which an insured person requires medical treatment and attendance with abstention from work on medical grounds. Sickness benefit is given at the rate of 70% of average daily wages and is payable for 91 days during 2 consecutive benefit periods.
To become eligible for sickness benefit, an insured person should have paid contribution for not less than 78 days during the corresponding contribution period. Any individual who has entered into insurable employment for the first time has to wait for nearly 9 months before becoming eligible for sickness benefit because the corresponding benefit period only begins after the interval. The benefit is not payable for the first two days of a spell of sickness, which is known as the ‘waiting period’.
Sickness Benefit and Leave Under ESI Scheme
While there were central notifications providing for extension with respect to period for filing returns, mandating continued remittance of contributions and reduction in rate thereof, several state governments released directives providing for paid leave for employees infected by coronavirus. For example, the Karnataka government released a notification that instructed the labour department to ensure that any infected employees covered under ESI received twenty-eight days of paid sick leave with full wages. This is subject to the employee obtaining a declaration from an ESI hospital and submitting the same to the employer. Similar notifications were enacted by other State governments as well.
The ESI also released a directive allowing migrant workers who are insured under the scheme to avail medical benefits while they are away from their workplace town/city. They are allowed to seek medical care services from ESI hospital nearest to their hometown.
The ESIC have extended the sickness benefit to employees who are quarantined due to COVID-19 and are absent from work. ESIC has stated that coronavirus infection is to be treated as a sickness for which an employee or an insured person can claim benefits allowed to him/her, provided that he/she meets the eligibility criteria attached to it. An Insured Person (IP) under the ESIC scheme needs to follow the procedures that are mentioned in the Employees’ State Insurance (General) Regulations, 1950 and can approach the ESIC directly to avail sickness benefit for COVID-treatment.
How to Avail Treatment Under ESI Scheme During COVID-19 Period?
Due to the nature of the COVID-19 outbreak, several hospitals across the countries have been converted to function as dedicated COVID-19 hospitals catering exclusively to patients afflicted by the virus. ESI beneficiaries referred to such hospitals may thus face difficulties if they want to avail non-COVID medical services. To this end the ESIC has given approval for a beneficiary to be referred to tie-up hospitals for consultation/admission/investigation during the period where hospitals are catering to exclusively COVID-19 patients. During the same period, ESIC beneficiary may also seek emergency/non-emergency medical treatment from a tie-up hospital without a referral letter in accordance with his/her respective entitlement. Similarly, ESIC beneficiaries may be provided the required treatments by tie-up hospital if available, even if there is no specific ESIC tie-up for the particular treatment. These provisions are temporary in nature and will operate until the ESIC COVID hospital is reversed back to an ESIC hospital catering to non-COVID medical services.
The ESI scheme’s relevance as a widespread social security net for India’s workers was clearly visible in the midst of the COVID-19 crisis. Its proactive directions helped address the difficulties faced by India’s most vulnerable populace and ensured that they received due assistance in coping with the cash crunch imposed by the nationwide lockdowns.
Have you faced any difficulties in claiming ESI benefit? Do you feel like the ESIC has addressed the pandemic and related difficulties adequately?
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