Seeking Advice: Can We Switch from ESI to Mediclaim Insurance for Our Retail Employees?

Seniors, please help me.

We are in the retail business and presently covered under the ESI Act. Many of our employees have been requesting us to remove ESI and provide them with a mediclaim insurance policy that is more beneficial. Is there any way to get an exemption from ESI coverage? If so, please guide us. We are prepared to appoint a full-time doctor to take care of our employees with good mediclaim insurance policies covering all the employees.

Murty

Dear Murthy,

Coverage of an employee under ESI depends on his salary. If the monthly salary is less than Rs. 10,000, then the employee will be covered under ESI, which is beneficial for the employee.

Once the employee's salary crosses the Rs. 10,000 mark, they will no longer be covered under ESI and can opt for a mediclaim policy. Additionally, there is a group insurance scheme available for employees whose salary ranges from Rs. 10,000 to Rs. 15,000 per month.

Regards,
Daleep Sharma

Dear Murthy,

As per the Employees' Insurance Act of 1948, Section 87, an exemption can be granted by notification through the state government. However, this exemption cannot extend beyond one year. Of course, obtaining an exemption is nearly impossible.

Now, I would like to ask a question regarding the benefits you intend to provide that cannot surpass those offered by the Employee State Insurance (ESI). For instance:

1. What are your plans for providing treatment for dependents such as mothers, fathers, wives, and children of employees? These benefits are covered under the ESI.
2. Will you offer medical insurance up to a certain amount? Unlike the ESI, there is no limit in terms of treatment coverage.
3. In the unfortunate event of a fatal accident resulting in an employee's permanent disability, they are entitled to a pension through the ESI. What arrangements do you have in place for such circumstances?
4. If an employee passes away during employment, their dependents receive substantial benefits from the ESI. How do your plans compare in this aspect?

Therefore, I believe it would be challenging to devise a policy superior to the ESI.

Thank you.

J.S. Malik

Dear Mr. Dakshina Murthy,

I would suggest continuing with ESI. If employees who are covered under ESI have a negative opinion on ESI, please try to correct the same. As employees covered under ESI must be drawing less than 10,000/- gross, they may be looking at this as a liability, but please educate them. Please also consider what kind of benefits and to what extent your mediclaim can cover. Please go through [ESIC](http://esic.nic.in/) for further information on ESI.

Dear Mr. Dakshina Murthy,

I would suggest continuing with ESI. If employees who are covered under ESI have a negative opinion on ESI, please try to correct the same. As employees covered under ESI must be drawing less than 10000/- gross, they may be looking at this as a liability, but please educate them. Please also consider what kind of benefits and to what extent your mediclaim can cover. Please go through ESIC for further info on ESI.

Dear Murthy,

Without informing these things to ESI officials, please organize a workshop with them (ESI officials). That will help everyone understand the benefits it provides employees.

Thanks,
Thirumalesh

Dear Murthy,

ESI is a central Act, not policies. It is compulsory, applicable, and eligible. If any employee's salary is more than 10,000/- (i.e., 10,001/-), they are exempted. In that case, you can provide other policies like W.C., Personal Accident, Medi-claim, etc. However, I advise that W.C. policy must be given under the W.C. Act of 1948, as per legal requirements (Only for exempted employees).

With warm regards,

Paresh M. Vyas
Advocate & Labour Laws Consultant (M)