geethanirmalkar
1

Hi Everyone, Can anyone suggest me whether ESI is the best option or Mediclaim is the best option to the employees in a software company.
From India, Visakhapatnam
Harsh Kumar Mehta
923

Sir,
1. Coverage under ESI Act, 1948 is compulsory and statutory and non-compliance of the same is punishable offence. The coverage is based on certain conditions as laid down in the said Act.
2. Therefore, your comparison of coverage under ESI Act with mediclaim policies appears to be not proper.
3. Software companies do not enjoy special privileges so far as applicability of labour laws is concerned.

From India, Noida
kanika kapoor
35

ESI is a mandate for employees having salary less than 15 thousand per month. However the company can give mediclaim facility to all employees. Hope it helps!
From India, Delhi
vanajaram
47

Hai members,
esi is a govt agency and mediclaimer is private agency. We cannot ask the private agency to treat the patients as we required. Esi is a part of social security to the industrial worker extended by the government.

From India, Visakhapatnam
Sovik Bhattachaerjee
48

Hi

My views are a bit different. ESI is no doubt a statuary compliance, and I don't wish to provide a lecture on ESI. But according to my view both should be implemented, for software company.

See, I know very well life in IT/ITES sector & I wish to join this sector as HR Manager with priority. Though as per ESI, 1.75% of Basic+ DA should be paid by employee & 4.75% by employer. Though ceiling may change from INR 6500 to INR 15000, means for a larger section of employees now ESIC will become mandate.

But, again if you consider senior profile, means whose (Basic + DA>15000), they generally don't prefer to use ESIC facilities. In most of the software companies this remuneration structure is much different as compared to many other domain. Its a status quo. This is also a fact that, medical facilities in ESIC hospitals are also substandard. Maximum govt hospitals in India are not of AIMS standard!

Under this situation, its better to have a mixed bucket, which can cater the requirements of Employees & employers:

1. Basic +DA < =15000/6500 (Still Ceiling of INR 15000 is not approved but may be approved)- Use ESIC option.

2. Basic +DA > 15000, I believe Mediclaim would be better option.

By this statuary compliance is met too.

Employees facilities:

1. They can select Hospitals as per there requirement(s) / status quo.

2. Scope of facilities is wide.

3. If policy is Insurance cum mediclaim nature, approved by IRDA, then still deduction can be obtained under 80C of Income Tax act, 1961- right away. Moreover, good news is due to linearization policy of this current central government, it is expected that Insurance bucket , facilities & tax structure MAY be revised.

Tax Saver for employees. additionally premium may be contributed by employee & employer jointly.

Employers benefit :

1. Under certain circumstances, it can act a tax saver- please consult with your Chartered Accountant or Company Secretary , as many factors are there which cant be discussed via this blog.

2. Retention of employees can be more, atleast attraction of employees can be achieved, as this scheme is more attractive as compared to ESI.

3. Certain, group employees policies are there which can be effectively used to cater the immediate medical relief not only in India but also abroad. and here FEMA, 1999 will not be applicable to employer directly & if expenditure is under prescribed ceilings. Good news is employer don't need to bear the heavy cost.

4. Statuary compliance is also met, since my bucket have more option to cater the requirements.

Thanks & Regards

Sovik B

9051547598

From India, Mumbai
Apex Management
157

Dear Geethanirmalkar,
I can not understand the purpose of comparison between ESIC and Mediclaim policy. In fact the ESIC is a mandatory law to be implemented if the conditions are fulfilled, and can not be replaced with Mediclaim.
The present ceilings are Rs.15000/- pm and not Rs.6500/- as referred by someone in the thread.
P K Sharma

From India, Delhi
deepika kokku
1

1. Coverage under ESI Act, 1948 is compulsory and statutory and non-compliance of the same is punishable offence. The coverage is based on certain conditions as laid down in the said Act.
2. Therefore, your comparison of coverage under ESI Act with mediclaim policies appears to be not proper.
3. Software companies do not enjoy special privileges so far as applicability of labour laws is concerned.
Appreciate And Validate
attribution https://www.citehr.com/498102-what-a...#ixzz35tpkoKS3. By comparing both I hope ESI is best

From India, Hyderabad
Subhajit Dasgupta
2

ESI is a statute which needs to be followed.Mediclaim is a special benefit which a Company provides to the employees for tax exemption and welfare of the employees.Apart from salary limit, ESI does not have any limitations on the medical expenses to be incurred.But mediclaim has certain coverage amount. Everyone within the salary cap of 15 k can get the benefit if he/she or the company is registered under ESI policy.Everyone can, under ESIC coverage can avail treatments in the best of hospitals in the country if referred by the concerned ESIC hospital and be treated under the best doctors of the country. This is not true that so called blue chip hospitals are only meant for Mediclaim policy holders.
From India, Kolkata
Sovik Bhattachaerjee
48

Hi,

Apex Management,

I believe, my views were not clear. You are correct that current that current 'salary' ceiling for ESI mandate is INR 15000 because you have used the word 'SALARY'. I believe you have not noticed I have used the term 'Basic +DA' & not ' SALARY'..

FYI, wage under Sec2 (22) of ESI ACT,1948 means all remuneration paid or payable, in cash to an employee, if the term of contract of employment , express or implied, were fulfilled. It also includes any payment made by employer in regards to during lock out strike which is not illegal or layoff or period of authorized leave and other additional remuneration, if any , paid at the interval not exceeding two months.............

Then my friend, does salary means only 'Basic+ DA'? No right, then am I fool to write all scrap in the thread..... People fail to understand the meaning what I wish to imply because in India we follow 'Mug Up Policy of knowledge'...That's why in India still there is a policy, if you are not getting a job by your skills, use bribe or short cuts or reference of someone influential or only via B school compassing...... Do hell with such students, Such HR's & do hell with such colleges / B schools( corporate houses- only for profit) or HR's. Funny right....but this is true, without any disrespect or hard feelings, I just wish to say this is practical picture of Market.

I have used concept of 'Basic + DA' instead of using the word 'remuneration/salary /wage' for comparing ESI with Mediclaim keeping in mind laws of taxation..........Please don't expect that I will teach interpretation of statues, deeds & documents, along with Taxation details, Cash flow statement readings....bla....bla....bla If people here don't understand the difference between penalty & fine here, then you tell me how can I continue this discussion forward, so that all can understand?

My friend, as per ESI ACT,1948 -The coverage of this act is at present restricted to employees drawing wages not exceeding INR 15000 per month. Please refer bare act with rules, if required. NO WHERE IS WRITTEN THAT BASIC + DA SHOULD BE UP TO INR 15000 or WAGE/REMUNERATION/SALARY MEANS ONLY - BASIC + DA.

Now question to you is can there be any punishment if any company don't provide ESI coverage to employees whose remuneration /wage/ salary/ commission is above INR 15000 or provide better facilities using different option with equivalent features, if yes then who is the adjudicating authority?

I have never seen any such types of rules, nor ACT specifying details or CASE LAWS........If you have any such information please share, with details, I would love to learn.

Employer(s) liabilities are limited to provide ESI Coverage to only those employees whose salary, remuneration, wage is <= 15000, iff employer is liable to follow ESI ACT,1948 under the prescribed criteria of the ACT.

FYI, if someone's BASIC + DA is >15000 then generally in a software company that's too in Vishakhapatnam remuneration would be around 30,000 - 50,000 per month- MINIMUM. That is around 3.6-6 lakhs per annum- MINIMUM, now do you understood why I used concept of TAX, and why its important to compare Mediclaim. HOW STATUARY COMPLIENCE ARE MEETING?

FYI, many Trade Union are asking CG to introduce concept of ' BASIC + DA' in the ACT, instead of work 'Wage' reason being in Mumbai, Chennai , Kerala remuneration standard is quite high, so is cost of living, thus more employee will be covered.

Please don't hesitate to ask question, we can have a long discussion..........on labor laws, Income tax act, 1961, etc.....But please don't advise anyone to mug up without understanding.

Thanks & Regards

Sovik B

MBA, Perusing CA/CS

B.Sc- Mathematics Hons

Under Universtity of Calcutta.

From India, Mumbai
Apex Management
157

Dear Sovik Bhattachaerjee

I would like to convey that the definitions of wages / salary as given in various labour statute is also known to me but I always stressed the needs to comment on the provisions of the laws first in these threads which is more important and what is being opted by the industries is a additional guidelines.

For instance, if the EL provisions is for 1 day after every 20 working days, then it should be known first and then further comments of prevailing situations / practices / positions in similar industries be given. One can go over and above to the provisions made in the act according to his needs but as far as coverage / compliance under ESIC is concerned, one can not opt voluntarily.

In this particular case, one Geethanirmalkar asked the advantages and disadvantages in comparison with ESIC and mediclaim for a software company and I gave my view as under:-

"I can not understand the purpose of comparison between ESIC and Mediclaim policy. In fact the ESIC is a mandatory law to be implemented if the conditions are fulfilled, and can not be replaced with Mediclaim. The present ceilings are Rs.15000/- pm and not Rs.6500/- as referred by someone in the thread."

So what wrong suggestion or comment has been passed on by me which is taken so hard by you and now for your reference I am putting some extract of your quoting as under:-

"See, I know very well life in IT/ITES sector & I wish to join this sector as HR Manager with priority. Though as per ESI, 1.75% of Basic+ DA should be paid by employee & 4.75% by employer. Though ceiling may change from INR 6500 to INR 15000, means for a larger section of employees now ESIC will become mandate.

But, again if you consider senior profile, means whose (Basic + DA>15000), they generally don't prefer to use ESIC facilities. In most of the software companies this remuneration structure is much different as compared to many other domain. Its a status quo. This is also a fact that, medical facilities in ESIC hospitals are also substandard. Maximum govt hospitals in India are not of AIMS standard!"

Now in the above para, you are mentioning "ceiling may change from 6500 to 15000" whereas the ceiling is already Rs.15000/- and secondly you quoted that senior profile whose remunerations are greater then 15000/- generally don't prefer to use ESIC facilities whereas a person getting above 15000/- is a excluded employee and how he will get benefit from ESIC.

The site is providing a platform where we can share and discuss our views and lot of new HR peoples are getting benefited daily. It is more important that we should quote the relevant provisions of the applicable laws on the queries first and then own suggestions should be added which may be more helpful.

P K Sharma

From India, Delhi
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