ESI Act, 1948 - Implications, Benefits, and Procedure
Application of the Act
The Act applies to non-seasonal power-using factories employing 10 or more persons and non-power using factories employing 20 or more persons. The Scheme has been extended to shops, hotels, restaurants, cinemas, including preview theatres, road motor transport undertakings, and newspaper establishments employing 20 or more persons. The existing wage limit for coverage under the Act is Rs.7500/- per month (effective from 1.4.2004).
Contribution
The employee's contribution rate (w.e.f. 1.1.97) is 1.75% of the wages, and the employer's is 4.75% of the wages paid/payable in respect of the employees in every wage period.
Contribution Period and Benefit Period
There are two contribution periods, each of six months duration, and two corresponding benefit periods, also of six months duration, as follows:
Contribution period:
1st April to 30th September
1st October to 31st March
Corresponding Cash Benefit period:
1st January of the following year to 30th June
1st July to 31st December of the year following
Benefits Under ESI Scheme
Medical Benefits
The Employees' State Insurance Scheme provides full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation, and hospitalization to insured persons and also to members of their families where the facility for specialist consultation and hospitalization has been extended to the families.
For the families, this benefit has been divided into two categories as follows:
- Full Medical Care
- Expanded Medical Care
Medical Benefits (Explanation)
Full Medical Care
This consists of hospitalization facilities and includes specialist services, drugs, dressings, and diets as required for in-patients.
Expanded Medical Care
This consists of consultation with specialists and the supply of special medicines and drugs as may be prescribed by them, in addition to outpatient care. This also includes facilities for special laboratory tests and X-ray examinations.
System of Treatment
Generally, the allopathic system of medicine is used for providing medical benefits. However, where a substantial number of workers demand treatment by the Indian system of medicine and Homoeopathy (ISM & H) other than Allopathy, the various ISM & H systems of treatment in vogue are Ayurvedic, Unani, Sidha, Yoga therapy, and Homeopathy.
Medical Benefits - Scale of Medical Benefit
To Insured Persons: IPs are entitled to avail treatment in ESI dispensaries/hospitals/diagnostic centers and recognized institutions, to which they are attached, such as:
- Outpatient treatment
- Domiciliary treatment by visits at their residences
- Specialists consultation
- In-patient treatment (hospitalization)
- Free supply of drugs, dressings, and artificial limbs, aids, and appliances
- Imaging and laboratory services
- Integrated family welfare, immunization, and MCH Programme and other national health programs, etc.
- Ambulance service or reimbursement of conveyance charges for going to hospitals, diagnostic centers, etc.
- Medical certification and special provisions
To Family Members of Insured Persons: While in all implemented areas, IPs are entitled to medical care as detailed above, members of a family of an IP are entitled to one or other of the following scales of medical benefits:
i. "Full" Medical Care i.e., all facilities as for IPs including hospitalization.
ii. "Expanded" Medical Care i.e., all facilities as for IPs except hospitalization. A small number of IPs in the States of Gujarat and Bihar fall under this category.
Sickness Benefits
Sickness Benefits Explained
Sickness Benefit represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when the IP requires medical treatment and attendance with abstention from work on medical grounds.
Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during two consecutive benefit periods.
Types of Sickness Benefits
- Extended Sickness Benefits (ESB)
- Enhanced Sickness Benefit
Extended Sickness Benefits
An IP suffering from certain long-term diseases is entitled to ESB, only after exhausting the Sickness Benefit to which they may be eligible. A common list of these long-term diseases for which ESB is payable is as follows:
- Infectious Diseases
- Neoplasms
- Endocrine, Nutritional, and Metabolic Disorders
- Disorders of the Nervous System
- Diseases of the Eye
- Diseases of the Cardiovascular System
- Chest Diseases
- Diseases of the Digestive System
- Orthopaedic Diseases
- Psychoses
- Others (More than 20% burns with infection/complication, Chronic Renal Failure, and Reynaud’s disease/Burger’s disease)
Enhanced Sickness Benefits (w.e.f 1.8.1976)
Insured Persons eligible for ordinary sickness benefit are paid enhanced sickness benefit at double the rate of sickness benefit, i.e., about full average daily wage for undergoing sterilization operations for family welfare. The duration of enhanced Sickness Benefits is:
- Up to 7 days in the case of Vasectomy
- Up to 14 days in the case of Tubectomy
from the date of operation or from the date of admission in the hospital as the case may be. The period is extendable in case of post-operative complications.
Maternity Benefit (MB)
Maternity Benefit Explained
Maternity Benefit is payable to an Insured Woman in the following cases subject to contributory conditions:
- Confinement-payable for a period of 12 weeks (84 days)
- Miscarriage or Medical Termination of Pregnancy (MTP)-payable for 6 weeks (42 days) from the date following miscarriage-on the basis of Form 20 and 23.
- Sickness arising out of Pregnancy, Confinement, Premature birth-payable for a period not exceeding one month-on the basis of Forms 8, 10, and 9.
- In the event of the death of the Insured Woman during confinement leaving behind a child, Maternity Benefit is payable to her nominee.
Maternity benefit rate is double the Standard Benefit Rate, or roughly equal to the average daily wage.
Disability Benefits
Disability Benefits Explained
Temporary Disability Benefit
There is no prescribed limit for the duration of TDB. This is payable as long as temporary disablement lasts and significant improvement by treatment is possible. If a Temporary Disablement spell lasts for less than 3 days (excluding the day of the accident), the IP will be paid sickness benefit, if otherwise eligible. A special point for IMOs/IMPs is that some IPs may resist taking a Final Certificate especially before 3 days for fear of loss of TDB.
Permanent Disability Benefit
PDB is payable to an IP who suffers permanent residual disablement and results in loss of earning capacity.
The duration of PDB may be for the period given by the Medical Board if the assessment is provisional or for the entire life if the assessment is final. PDB Rate: The PDB rate is calculated as a percentage of loss of earning capacity as assessed by the Medical Board/MAT/EI Court in relation to TDB. The maximum rate of PDB can be equal to the rate of TDB.
Dependant’s Benefit
Dependant’s Benefit Explained
The dependant’s benefit is payable to the dependants in cases where an IP dies as a result of EI.
The minimum rate of DB is Rs.14/- per day and these rates of the DB are increased from time to time. (The latest enhancement is with effect from 01.08.2002)
Funeral Benefit
Funeral expenses not exceeding Rs. 2500/- are payable towards expenditure on the funeral of a deceased IP.
ESI Related Forms
- FORM 0 - EMPLOYERS’ REGISTRATION FORM
- FORM 1 - DECLARATION FORM
- FORM 1 A - FAMILY DECLARATION FORM
- FORM 1 B - CHANGES IN FAMILY DECLARATION FORM
- FORM 3 - RETURN OF DECLARATION FORMS
- FORM 6 - RETURN OF CONTRIBUTIONS
- FORM 12 - SICKNESS OF TEMPORARY BENEFITS
- FORM 12 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 13 - SICKNESS OR TEMPORARY DISABLEMENT OR MATERNITY BENEFIT FOR SICKNESS
- FORM 13 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 14 - SICKNESS OR TEMPORARY DISABLEMENT OR MATERNITY BENEFIT FOR SICKNESS
- FORM 14 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 16 - ACCIDENT REPORT FROM EMPLOYER
- FORM 17 - DEPENDANT’S OR FUNERAL BENEFIT (DEATH CERTIFICATE)
- FORM 18 - DEPENDANT’S BENEFIT (CLAIM FORM)
- FORM 18 A - DEPENDANT’S BENEFIT (CLAIM FOR PERIODICAL PAYMENTS)
- FORM 19 - MATERNITY BENEFIT (NOTICE OF PREGNANCY)
- FORM 20 - MATERNITY BENEFIT (CERTIFICATE OF PREGNANCY)
- FORM 21 - MATERNITY BENEFIT (CERTIFICATE OF EXPECTED CONFINEMENT)
- FORM 22 - CLAIM FOR MATERNITY BENEFIT
- FORM 23 - MATERNITY BENEFIT (CERTIFICATE OF CONFINEMENT OR MISCARRIAGE)
- FORM 24 - MATERNITY BENEFIT (NOTICE OF WORK)
- FORM 25 - CLAIM FOR PERMANENT DISABLEMENT BENEFIT
- FORM 26 - CERTIFICATE FOR PERMANENT DISABLEMENT BENEFIT
- FORM 27 - DECLARATION AND CERTIFICATE FOR DEPENDANT’S BENEFIT
Application of the Act
The Act applies to non-seasonal power-using factories employing 10 or more persons and non-power using factories employing 20 or more persons. The Scheme has been extended to shops, hotels, restaurants, cinemas, including preview theatres, road motor transport undertakings, and newspaper establishments employing 20 or more persons. The existing wage limit for coverage under the Act is Rs.7500/- per month (effective from 1.4.2004).
Contribution
The employee's contribution rate (w.e.f. 1.1.97) is 1.75% of the wages, and the employer's is 4.75% of the wages paid/payable in respect of the employees in every wage period.
Contribution Period and Benefit Period
There are two contribution periods, each of six months duration, and two corresponding benefit periods, also of six months duration, as follows:
Contribution period:
1st April to 30th September
1st October to 31st March
Corresponding Cash Benefit period:
1st January of the following year to 30th June
1st July to 31st December of the year following
Benefits Under ESI Scheme
Medical Benefits
The Employees' State Insurance Scheme provides full medical care in the form of medical attendance, treatment, drugs and injections, specialist consultation, and hospitalization to insured persons and also to members of their families where the facility for specialist consultation and hospitalization has been extended to the families.
For the families, this benefit has been divided into two categories as follows:
- Full Medical Care
- Expanded Medical Care
Medical Benefits (Explanation)
Full Medical Care
This consists of hospitalization facilities and includes specialist services, drugs, dressings, and diets as required for in-patients.
Expanded Medical Care
This consists of consultation with specialists and the supply of special medicines and drugs as may be prescribed by them, in addition to outpatient care. This also includes facilities for special laboratory tests and X-ray examinations.
System of Treatment
Generally, the allopathic system of medicine is used for providing medical benefits. However, where a substantial number of workers demand treatment by the Indian system of medicine and Homoeopathy (ISM & H) other than Allopathy, the various ISM & H systems of treatment in vogue are Ayurvedic, Unani, Sidha, Yoga therapy, and Homeopathy.
Medical Benefits - Scale of Medical Benefit
To Insured Persons: IPs are entitled to avail treatment in ESI dispensaries/hospitals/diagnostic centers and recognized institutions, to which they are attached, such as:
- Outpatient treatment
- Domiciliary treatment by visits at their residences
- Specialists consultation
- In-patient treatment (hospitalization)
- Free supply of drugs, dressings, and artificial limbs, aids, and appliances
- Imaging and laboratory services
- Integrated family welfare, immunization, and MCH Programme and other national health programs, etc.
- Ambulance service or reimbursement of conveyance charges for going to hospitals, diagnostic centers, etc.
- Medical certification and special provisions
To Family Members of Insured Persons: While in all implemented areas, IPs are entitled to medical care as detailed above, members of a family of an IP are entitled to one or other of the following scales of medical benefits:
i. "Full" Medical Care i.e., all facilities as for IPs including hospitalization.
ii. "Expanded" Medical Care i.e., all facilities as for IPs except hospitalization. A small number of IPs in the States of Gujarat and Bihar fall under this category.
Sickness Benefits
Sickness Benefits Explained
Sickness Benefit represents periodical cash payments made to an IP during the period of certified sickness occurring in a benefit period when the IP requires medical treatment and attendance with abstention from work on medical grounds.
Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during two consecutive benefit periods.
Types of Sickness Benefits
- Extended Sickness Benefits (ESB)
- Enhanced Sickness Benefit
Extended Sickness Benefits
An IP suffering from certain long-term diseases is entitled to ESB, only after exhausting the Sickness Benefit to which they may be eligible. A common list of these long-term diseases for which ESB is payable is as follows:
- Infectious Diseases
- Neoplasms
- Endocrine, Nutritional, and Metabolic Disorders
- Disorders of the Nervous System
- Diseases of the Eye
- Diseases of the Cardiovascular System
- Chest Diseases
- Diseases of the Digestive System
- Orthopaedic Diseases
- Psychoses
- Others (More than 20% burns with infection/complication, Chronic Renal Failure, and Reynaud’s disease/Burger’s disease)
Enhanced Sickness Benefits (w.e.f 1.8.1976)
Insured Persons eligible for ordinary sickness benefit are paid enhanced sickness benefit at double the rate of sickness benefit, i.e., about full average daily wage for undergoing sterilization operations for family welfare. The duration of enhanced Sickness Benefits is:
- Up to 7 days in the case of Vasectomy
- Up to 14 days in the case of Tubectomy
from the date of operation or from the date of admission in the hospital as the case may be. The period is extendable in case of post-operative complications.
Maternity Benefit (MB)
Maternity Benefit Explained
Maternity Benefit is payable to an Insured Woman in the following cases subject to contributory conditions:
- Confinement-payable for a period of 12 weeks (84 days)
- Miscarriage or Medical Termination of Pregnancy (MTP)-payable for 6 weeks (42 days) from the date following miscarriage-on the basis of Form 20 and 23.
- Sickness arising out of Pregnancy, Confinement, Premature birth-payable for a period not exceeding one month-on the basis of Forms 8, 10, and 9.
- In the event of the death of the Insured Woman during confinement leaving behind a child, Maternity Benefit is payable to her nominee.
Maternity benefit rate is double the Standard Benefit Rate, or roughly equal to the average daily wage.
Disability Benefits
Disability Benefits Explained
Temporary Disability Benefit
There is no prescribed limit for the duration of TDB. This is payable as long as temporary disablement lasts and significant improvement by treatment is possible. If a Temporary Disablement spell lasts for less than 3 days (excluding the day of the accident), the IP will be paid sickness benefit, if otherwise eligible. A special point for IMOs/IMPs is that some IPs may resist taking a Final Certificate especially before 3 days for fear of loss of TDB.
Permanent Disability Benefit
PDB is payable to an IP who suffers permanent residual disablement and results in loss of earning capacity.
The duration of PDB may be for the period given by the Medical Board if the assessment is provisional or for the entire life if the assessment is final. PDB Rate: The PDB rate is calculated as a percentage of loss of earning capacity as assessed by the Medical Board/MAT/EI Court in relation to TDB. The maximum rate of PDB can be equal to the rate of TDB.
Dependant’s Benefit
Dependant’s Benefit Explained
The dependant’s benefit is payable to the dependants in cases where an IP dies as a result of EI.
The minimum rate of DB is Rs.14/- per day and these rates of the DB are increased from time to time. (The latest enhancement is with effect from 01.08.2002)
Funeral Benefit
Funeral expenses not exceeding Rs. 2500/- are payable towards expenditure on the funeral of a deceased IP.
ESI Related Forms
- FORM 0 - EMPLOYERS’ REGISTRATION FORM
- FORM 1 - DECLARATION FORM
- FORM 1 A - FAMILY DECLARATION FORM
- FORM 1 B - CHANGES IN FAMILY DECLARATION FORM
- FORM 3 - RETURN OF DECLARATION FORMS
- FORM 6 - RETURN OF CONTRIBUTIONS
- FORM 12 - SICKNESS OF TEMPORARY BENEFITS
- FORM 12 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 13 - SICKNESS OR TEMPORARY DISABLEMENT OR MATERNITY BENEFIT FOR SICKNESS
- FORM 13 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 14 - SICKNESS OR TEMPORARY DISABLEMENT OR MATERNITY BENEFIT FOR SICKNESS
- FORM 14 A - MATERNITY BENEFIT FOR SICKNESS
- FORM 16 - ACCIDENT REPORT FROM EMPLOYER
- FORM 17 - DEPENDANT’S OR FUNERAL BENEFIT (DEATH CERTIFICATE)
- FORM 18 - DEPENDANT’S BENEFIT (CLAIM FORM)
- FORM 18 A - DEPENDANT’S BENEFIT (CLAIM FOR PERIODICAL PAYMENTS)
- FORM 19 - MATERNITY BENEFIT (NOTICE OF PREGNANCY)
- FORM 20 - MATERNITY BENEFIT (CERTIFICATE OF PREGNANCY)
- FORM 21 - MATERNITY BENEFIT (CERTIFICATE OF EXPECTED CONFINEMENT)
- FORM 22 - CLAIM FOR MATERNITY BENEFIT
- FORM 23 - MATERNITY BENEFIT (CERTIFICATE OF CONFINEMENT OR MISCARRIAGE)
- FORM 24 - MATERNITY BENEFIT (NOTICE OF WORK)
- FORM 25 - CLAIM FOR PERMANENT DISABLEMENT BENEFIT
- FORM 26 - CERTIFICATE FOR PERMANENT DISABLEMENT BENEFIT
- FORM 27 - DECLARATION AND CERTIFICATE FOR DEPENDANT’S BENEFIT