Navigating Employee Health Coverage: ESI vs. Medical Insurance for Construction Workers in India

Dear Seniors,

My organization is planning to medically insure its employees. We are a construction company operating in Orissa, AP, and Karnataka. We have observed that when an individual takes medical insurance, the policy needs to be in the individual's name. If the individual leaves the company, the policy can be discontinued, or the individual might choose to continue with the policy. This setup is not very beneficial considering the number of employees leaving our company for better opportunities.

The second option is to provide ESI benefits for employees with a gross salary below Rs. 15,000 per month. The remaining employees can be insured by a private service provider.

My questions are as follows:

1. What are the medical benefits under the ESI plan for employees?
2. What will be the monthly payments that I need to make towards ESI?
3. How can employees with gross salaries above Rs. 15,000 per month be included under the ESI brackets?
4. If I need to insure the remaining employees under a Group Medical Insurance Plan or an Individual Medical Insurance Plan, which option would be more cost-effective, and is it recommended?

Please assist me with my inquiries.

Santosh
santosh.yb@gmail.com

The ESIC website doesn't provide much detail on the benefits. If someone could answer my questions, I would appreciate it.

Regards,
Santosh

From an insurance perspective, a group health insurance cover for your employees will allow for greater benefits (i.e., fewer upsets), and you will also get the benefit of paying the premium only until the employee is working for the organization.

Regards,
Deepak

Dear Mr. Santosh,

ESI and medical insurance are totally different things. ESI is a statutory obligation of the employer, whereas medical insurance is not. If the area where your organization is located is covered under ESI, then your organization is bound to provide ESI to its employees whose gross salary is less than or equal to 15000. Organizations have no option in this regard.

1. To know about medical benefits under ESIC, please visit [ESIC](http://esic.nic.in).

2. a. Employer's contribution - 4.75% of gross salary
b. Employee's contribution - 1.75% of gross salary

3. If the gross salary is above 15000, employees are not covered under ESI.

4. It's better to opt for a Group Mediclaim Policy as the premium will be lower, and the company will receive tax benefits. You can choose a Family Floater Group Mediclaim Policy so that family members of the employee are also covered.

-Kamal

ESIC is a waste of money for both employees and employers. First, the government should provide the platform for medical health facilities before making compulsions on ESIC. Nobody is in favor of such shoddy treatment. ESIC Hospitals should be only those hospitals where our politicians and bureaucrats receive treatment, not any hospital that pays bribes to get registered as ESIC Hospitals.

In my office, even peons avoid going to such so-called ESIC facilities because there is a higher chance of catching a disease rather than receiving the right treatment. Just find out the number of companies that have opted for both ESIC and Mediclaim facilities. It's proof that employees and employers don't believe in this hogwash of a system.

Regards

Dear Mr. Santosh,

ESI and medical insurance are totally different things. ESI is a statutory obligation of the employer, whereas medical insurance is not. If the area where your organization is located is covered under ESI, then your organization is bound to provide ESI to its employees whose gross salary is less than or equal to 15000. Organizations have no option in this regard.

To know about medical benefits under ESIC, please visit [ESIC](http://esic.nic.in).

1. Employer's contribution - 4.75% of gross salary, Employee's contribution - 1.75% of gross salary.
2. If the gross salary is above 15000, employees are not covered under ESI.
3. It's better to opt for a Group Mediclaim Policy as the premium will be lower, and the company will receive tax benefits. Consider a Family Floater Group Mediclaim Policy to ensure that the family members of the employee are also covered.

Thank you,
Kamal

Hi Santosh,

Group medical insurance is always better than ESIC as the network of hospitals with group medical insurance is vast, and the employee has two options (cashless and reimbursement) facilities that they can opt for across India. Some of the insurance companies are New India Assurance, United India, ICICI Lombard, and the latest one is Max Bupa. They have tie-ups with TPAs for processing the claims.

On the other hand, ESIC comes under HR compliance. Therefore, obtaining the ESIC code is a kind of compulsion, or else it could create a problem from a compliance point of view. In some companies, employees are covered under ESIC as well as group medical insurance so that they can avail medical facilities in a wide network of hospitals and not just in the panel hospitals of ESIC.

Regards, Radhika Thaker

ESI is a statutory scheme which is mandatory for establishments set up in the implemented areas. Therefore, if your establishment is set up in an implemented area, then all employees whose salary does not exceed Rs. 15,000 are required to be covered. The scheme is contributory in nature whereby the employees contribute 1.75% of their salary and the employer contributes 4.75%. By doing so, all medical, sickness, and compensation by way of accidents while on duty, including death, which would otherwise be the responsibility of the employer under the Workmen's Compensation Act, will be taken care of by the ESI Corporation. Similarly, maternity benefits like 84 days of paid leave and maternity bonus to the tune of Rs. 1000, which are required to be given to women employees, will also be borne by the ESIC.

Medical Insurance is a different scheme but it is not as per any statute, but it is optional for an employer who would like to get his obligations shifted to an insurer for a consideration called premium. It would be beneficial to cover the risks in respect of those employees whose salary exceeds Rs. 15,000. For these employees, ESI will not provide any coverage.

Regards,

Madhu.T.K

Implementation of Medical Insurance Instead of ESIC

I have a few questions regarding the implementation of medical insurance instead of ESIC in the salary breakup:

1. How can medical insurance be implemented in the salary breakup instead of ESIC?
2. What is the process for an employee to pay the premium if they opt for medical insurance?
3. If DA increases, does the employee's premium need to increase mandatorily, or can the same premium be maintained until the employee chooses to pay more for higher coverage?
4. Is it possible for the medical insurance premium to be paid monthly?

I work in the security department, where we have retired ex-army officials hired on a contract basis. Since their DA increases every six months, I am unsure about how the premiums and payments should be handled. I would appreciate a prompt response.

Thank you