Navigating Employee Medical Safety: Is a Mediclaim Policy or WC Act Coverage Necessary?

Dear All,

In my company, there are approximately 250 employees in the staff and workers categories. The ESIC scheme is not applicable to this company. Concerning the medical safety of employees, I have a few queries outlined below:

1. Is it now compulsory to cover the factory under the WC Act?
2. If the WC Act is not compulsory, what other measures should be taken to ensure the medical safety of all employees?
3. What is the procedure for obtaining a mediclaim policy for all employees, and which company provides the maximum benefits in terms of mediclaim?
4. What could be the consequences if we do not opt for any medical safety options?
5. If we choose a mediclaim policy, should the annual premium be deducted from the employees' salaries, or will it be covered solely by the employer?

Please note that the average salary of staff is Rs. 13,000, and the average age of staff is 28 years.

I am urgently seeking your valuable advice as I need to make recommendations to management promptly.

Regards

Dear Sunil,

First of all, you should ascertain whether the situation of the factory falls under the jurisdiction of ESI. If it does, you have to register the factory with ESI. If the factory is not within the jurisdiction of ESI, then you should opt for a WC policy for your workers/employees.

Regarding Mediclaim coverage, you can take out a policy on behalf of your employees as a group policy. As for the Mediclaim premium amount, you can either pay it on behalf of the employees as a benefit or collect/deduct the amount from their salary and then pay it.

As per the WC Act, you are liable to provide compensation to the employee/worker if any untoward incident (such as death or disablement) occurs during their employment.

Regards,
Ratan

Dear Ratan, our factory is out of the jurisdiction of ESI, and we have not opted for Workers' Compensation (WC) yet. In this case, if we don't go for WC at all, can a mediclaim policy be an alternative to WC or not? Or is it mandatory to go for WC irrespective of having a mediclaim policy?

Dear Sunil, you should first of all know the difference between Mediclaim Policy and WC Policy. Mediclaim policy is not a benefit policy; it only reimburses accidental, disease, or illness hospitalization expenses, whereas WC is a different policy that pays compensation to the employee when any death or disability arises during the course of employment. The compensation will be decided by the Honorable WC commissioner; it depends on the age and wages. At times, the volume of compensation will be high, for which the company may incur huge expenditure. That is why it is always better to take a WC policy for employees when they are not covered under ESI.

Regarding Mediclaim policy, if no death or permanent disability occurred, but there is an accident, disease, or illness that necessitates hospitalization, then WC will not pay any compensation, but Mediclaim Policy will come to your rescue. It will reimburse the expenses for hospitalization for the said accident, disease, or illness. However, this Mediclaim policy is not mandatory. It is your option and is a benefit you may extend to your employees by paying the entire premium amount or collecting the premium amount on an installment basis from the employees.

If you require any assistance in this regard, please revert back to me.

Regards,
Ratan