Understanding ESI and Mediclaim in the Workplace
Hi Everyone, I am working in a software company, and until April, we were deducting ESI for those employees whose salary was less than 10,000. Now, we are going to start providing mediclaim to all our employees. As far as I know, mediclaim and ESI are both health insurances. Now, my questions are:
1) As we are going to provide them mediclaim, can mediclaim replace ESI?
2) Are we still liable to pay them ESI? If not, can you tell me the process to close this ESIC so that we can switch to providing only medical insurance?
Looking forward to your replies!
Thanks, Meenakshi
ESI: A Comprehensive Social Security Legislation
ESI is a compulsory social security legislation for employees to provide not only full medical care to the employees and their family members, but it also provides a package of other cash benefits during abstention from work of an employee due to sickness, maternity, and employment injury. It provides permanent disablement benefit for life in case of any residual disability due to employment injury. Dependents' benefit is admissible to the dependents in case of the death of an employee due to employment injury. The ESI (Amendment) Act, 2010 provides these benefits in case of commuted accidents while coming for duty or returning home after work.
Medical Benefits Under ESI
Medical benefits include provisions for artificial appliances like artificial limbs, crutches, wheelchairs, cervical calipers, spectacles, wigs, etc. as part of treatment. Mediclaim does not cover all these benefits. Therefore, you have to continue ESI for all those earning wages up to and including 15,000/- p.m. (from 1-5-2010). You can opt for mediclaim only for those earning above 15,000/- p.m. as they are not covered under ESI.
Exemption from ESI
Exemption: If an employer is providing similar or superior benefits compared to those provided under ESI to all employees, including temporary and casual employees, then that employer is eligible for exemption from ESI under Section 87 of the ESI Act. An application in the prescribed format is to be submitted for such exemption to be granted by the Government. This exemption is given prospectively for not more than a year at a time.
Regards, Ramana Murty, Hyderabad