Subbu28101968
Savings Thru Mutual Funds
Abbasiti
Assistant Engineer, Indian Telephone Industries,

The corporates are compulsorily made to deduct ESI from the employees who are drawing less than Rs.15000/- per month. Corporates also pay their contributions.
Some corporates also reimburse Medical expenses apart from ESI contribution.
According to ESI act, a company which is paying payment for contract like Security and other labour hire charges has to ensure for the contribution of ESI by their contactors.
So according to me, when a corporate is paying Medical reimbursements, is it neccessary to contribute ESI ?
Moreover is it necessary to supervise the contributions to ESI by contractors?
Why should not we make a choice by an employee for the contribution of ESI by employees and employers when a medical reimbursement is available?

From United Kingdom, Oxford
Dear Subbu,
Paying Medical reimbursement means you have an alternate medical scheme. If you provide equal or better benefits than ESIC, there is provision to get exempted. Accordingly contact an ESI office and as per their advice, write to the Ministry of Labour, Government of India for exemption.
Abbas.P.S

From India, Bangalore
Dear Subbu,
I know a leading cement industry that even owns a hospital on its own that renders the best medical treatment available to the employee. But that industry was unable to obtain exemption from ESI because ESI not only talks of Medical treatment and reimbursement but extends a host of other benefits as well.
So in my opinion it will be too difficult for you to obtain an exemption when you are reimbursing medical expenses alone.
Though the employees employed by contractor are his employees, you are the principal employer and hence you are responsible for ensuring contributions made by the contractor. If the contractor fails to remit the contributions, you can call the contractor and instruct him to remit the contributions. If he continues it is advisable to go in for a contractor who remits contributions regularly.
M.V.KANNAN

From India, Madras
Dear Kannan,
ESI provide better treatments clubbing with multi speciality hospitals. So with an own hospital, equal or better benfits cannot be provided. Hence it is the prime condition to provide better treatment and convince the Ministry of labour in this regard.
It is our experience that the units of ITI Ltd in Bangalore and Palakkad are exempted from from ESIC for a long time. They provide exemption for two years (at a time) from Oct 1 to Sept 30. Means we have to write the ministry in every two years. But there is a time span to write. After the amendment in 2010, application should be reached by three months before the expiry.
Abbas.P.S

From India, Bangalore
My opinion is that all persons do not have interest in going to ESI hospital or ESI dispensary, so we should give options to employees for taking ESI benefits.
From United Kingdom, Oxford
Dear Abbas,
Thanks for the update. Do you have information on any exemptions given to other units in Tamilnadu. I shall be thankful if you can forward the amendment 2010 cited by you. If so please give me inputs.
Regards
M.V.KANNAN

From India, Madras
Dear Subbu & Kannan,

I shall quote the sections 87 to 91 of the ESI Act. Accordingly some persons, class of persons, a factory or class of factories etc. may be exempted from ESIC under certain conditions.

87. Exemption of a factory or establishment or class of factories orestablishments.

87. Exemption of a factory or establishment or class of factories or establishments.-The appropriate Government, may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time.

88. Exemption of persons or class of persons.

88. Exemption of persons or class of persons.- The appropriate Government may, by notification in the Official Gazette and subject to such conditions as it may deem fit to impose, exempt any persons or class of persons employed in any factory or establishment or class of factories or establishments to which this Act applies from the operation of the Act.

89. Corporation to make representation.

89. Corporation to make representation.- No exemption shall be granted or renewed under section 87 or section 88, unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in regard to the proposal and such representation has been considered by the appropriate Government.

90. Exemption of factories or establishments belonging to Government orany local authority.

90. Exemption of factories or establishments belonging to Government or any local authority.- The appropriate Government may 7*[after consultation with the Corporation,] by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment belonging to 8*** any local authority 7*[from --------------------------------------------------------------------- 1. Subs. by Act 29 of 1989, s. 36 (w.e.f. 20-10-1989). 2. Ins. by Act 53 of 1951, s. 22. 3. Subs. by Act 44 of 1966, s. 35, for "Central Government" (w.e.f. 17-6-1967). 4. Subs. by Act 29 of 1989, s. 37 (w.e.f. 20-10-1989). 5. Omitted by s. 37, ibid. (w.e.f. 20-10-1989). 6. Ins. by s. 38, ibid. (w.e.f. 20-10-1989). 7. Ins. by Act 44 of 1966, s. 36 (w.e.f. 17-6-1967). 8. Omitted by Act 29 of 1989, s. 39 (w.e.f. 20-10-1989). 265 the operation of this Act], if the employees in any such factory or establishment are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

91. Exemption from one or more provisions of the Act. 91. Exemption from one or more provisions of the Act.- The appropriate Government may, with the consent of the Corporation, by notification in the Official Gazette, exempt any employees or class of employees in any factory or establishment or class of factories or establishments from one or more of the provisions relating to the benefits provided under this Act.

91A. Exemptions to be either prospective or retrospective.

1*[91A. Exemptions to be either prospective or retrospective.- Any notification granting exemption under section 87, section 88, section 90 or section 91 may be issued so as to take effect either prospectively or retrospectively on such date as may be specified therein.

Abbas.P.S

From India, Bangalore
Dear Kannan,

Ishall quote TAXGURU dated 3.9.2010 regarding the ESI amendment 2010. Note that point number 9 deals with exemption.

ESIC Amendment Act, 2010- Key Highlights

September 3, 2010 in Corporate Law by admin

The Government of India has notified ESIC Amendment) Act 2010 vide official gazette dated 25 May 2010. The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948. The Government of India through notification in Official Gazette dated 25 May 2010 has enacted The Employees’ State Insurance (Amendment) Act, 2010 to amend the earlier ESIC Act, 1948.

These amendments will substantially improvise the medical and other benefits under the Scheme. Emphasis has been given for development and expansion of infrastructure for augmenting the benefits under the Scheme.

Benefits under the scheme have also been extended to apprentices and trainees employed under Apprentice Act and Standing Order Act. Amendments also aim to improvise the administration of the scheme and to overcome practical difficulties experienced in past during inspection and assessment.

The ESI Act of 2010 replaces the old Act of 1948. The rationale is to expand the infrastructure for augmenting the benefits available under the scheme. The scope of existing benefits is also being extended by adding/ modifying the existing provisions.

Introduction

The Government of India through notification in Official Gazette dated 25 May 2010 has enacted The Employees’ State Insurance (Amendment) Act, 2010 to amend the ESIC Act, 1948. Except section 18, provisions as contained in Amendment Act will be applicable with effect from 1 June, 2010. Provisions of section 18 shall be deemed to have come into force with effect from 3 July, 2008.

Objectiv

These amendments will substantially improvise the medical and other benefits under the Scheme. Emphasis has been given for development and expansion of infrastructure for augment*ing the benefits under the Scheme. Benefits under the scheme have also been extended to apprentices and train*ees employed under Apprentice Act and Standing Order Act. Amendments also aim to improvise the administration of the scheme and to overcome practi*cal difficulties experienced in past dur*ing inspection and assessment.

Salient features of some of the imnortant amendments

1. Vide amendment in sub-section 5 to section 1 of the ESIC Act, 1948 (hereinafter referred as Act), the ap*propriate Government is empowered to extend the provisions of ESIC Act 1948 to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise after giving one month notice of its intention of doing so by notification in Official Gazette instead of notice period of six months.

2. Definition of “dependents” as contained in clause 6A of section 2 of the Act, has been extended to enlarge the number of beneficiaries under the act such as;

— A widow, a legitimate or adopted son below the age of 25 years and an unmarried legitimate or adopted daughter.

— The age limit of the dependants has been enhanced from 18 to 25 [sub-clause (i) and (ii)]

— Exclusion granted to apprentice engaged under the Apprentices Act, 1961 or under the Standing Orders of the establishment for coverage under scheme has been withdrawn vide amendment in clause 9 of the Act. Hence, apprentices engaged under the Apprentices Act, 1961 or under Standing Orders of the establish*ment will also be covered under the purview of the ESIC Scheme with effect from 1 June, 2010.

— A dependent parent as per definition of “family” has been substituted so as to include “A minor brother or sister wholly dependent upon the earnings of the insured person in case the insured person is unmarried and his or her parents are not alive”. It has been also clarified that de*pendent parents to include “Dependent parents, whose income from all sources does not exceed such income as pre*scribed by the Central Govern*ment”.

3. The definition of Factory under Section 2(12) has been amended to expand coverage of smaller factories. The amended Act covers all factories which employ 10 or more persons irrespective of the fact whether the manufacturing process is being carried out with the aid of the power or without the aid of the power.

4. I Deputy General – ESIC is being made Chairman of the Medical Benefit Council to improve quality of medical benefits. (Section 10 of the Act)

5. I The ESIC Corporation can now appoint consultants and specialists on contract basis for better delivery of super-specialty services. (new proviso added to clause (a) sub? section (2) of section 17)

6. The designation of Inspector has been re-designated as “Social Security Officer to enroll them as facilitator of the Scheme rather than to act as mere inspectors. (amendment to section 45)

7. The ESIC Corporation may nominate any officer duly authorized to carry out re-inspection or test inspection of the records and returns already inspected by Social Security Officer. (A new sub-section 4 added to section 45 of the Act).

Medical benefits to the insured person and his spouse have been extended under circumstances where insured person retires under Voluntary Retirement Scheme or takes premature retirement. In earlier Act the benefit was applicable only on attaining the age of superannuation.

1. The procedure for determination of contribution has been streamlined to avoid undue hardship as the Inspec*tors shall not inspect the books of accounts of the establishment beyond the period of five years. It will resolve all difficulties pertaining to production of records beyond the period of five years for the purpose of inspection and verification. (new pro*viso added to section 45A of the Act)

2. After section 45A, a new section 45AA has been inserted. It provides that, if an employer is not satisfied with the order of the ESIC Corpora*tion, he may prefer an appeal to an appellate authority within sixty days of the date of order, after depositing 25% of the contribution so ordered OR the contribution as per his own calculation whichever is higher. It also provides that, if the employer finally succeeds in the appeal, the excess amount deposited shall be refunded together with interest thereon as may be specified in regu*lation.

3. Accident occurring to an insured person while commuting from his residence to the place of employment and vice-a-versa shall be deemed to have arisen out of and in the course of employment for the purpose of benefit under the Act. A new section 51 E has been added for this purpose.

4. Medical benefits to the insured per*son and his spouse have been extended under circumstances where insured person retires under Volun*tary Retirement Scheme or takes premature retirement. Proviso to sub*section 3 of section 56 has been substituted to provide the same.

5. State Governments are allowed to set up autonomous organizations to provide certain benefits to employees in case of sickness, maternity and employment injury under the Scheme. (sub-section 5 has been inserted to section 58 of the Act)

6. The ESIC Corporation can enter into agreement with any local authority, private body or individual for commissioning and running the ESI hospitals through third party participa*tion for providing medical treatment and attendance to insured persons. (sub-section 3 has been inserted to section 59 of the Act).

7. ESIC Corporation may establish medical colleges, nursing colleges and training institutes for its para*medical staff and other employees with a view to improve the quality of the services. A new section 59B has been included in Act.

8. A new Chapter VA has been added to enable provision for extending medical care to non insured persons against payment of user-charges to facilitate providing medical care to the below poverty line (BPL) families and other un-organized sector workers covered under the Rashtriya Swasthya Bima Yojana (RSBY).

"9. Exemption of a factory or establishment or class of factories or establishments from the operation of this Act will be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. It has also been provided that application for renewal of exemption shall be made three months before the date of expiry of the exemption period and a decision on the same will be taken by the ap*propriate Government within a period of two months of receipt of such application. (new proviso added to section 87 of the Act)"

10. Exemption granted to factory or establishment from the operation of this Act shall be prospectively and not retrospectively as per section 91 of the Act.

Directives for Reimbursement of Expenditure

Introduction

In view of complaints received from various employers regarding delay/ non-reimbursement of expenditure incurred by them for emergency treatment of their employees, ESIC Corporation has issued guidelines to all the concerned authorities vide letter dated 21 May 2010 covering terms, conditions and procedures to be followed for timely reimbursement of expenditure incurred by employer on treatment of its employees covered under ESIC Scheme for providing medical care in emergencies.

Salient features of the guidelines

— Like super specialty care, re-imbursement will be made by Senior State Medical Commissioner (SSMC) / State Medical Commissioner (SMC) of the State concerned in respect of emergency treatment and the total expenditure will be borne by ESIC

— Employers will have to submit treatment papers and original bills to SSMC / SMC of the State.

— SSMC / SMC shall check the entitlement of the Insured Person.

— SSMC / SMC / Medical Referee shall verify the emergency nature of the case. The reimbursement shall be limited to approved rates of the empanelled hospitals/ Central Government Health Scheme (CGHS) rates.

— To avail cash less facilities, employers, may take the Insured Persons in case of emergency to empanelled hospitals of ESIC, if available nearby.

Abbas.P.S

From India, Bangalore
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