Is It Possible to Opt-Out of ESIC When We Already Have Group Medical Insurance?

Hi Friends, we are a small design engineering company. I have a query - ESIC is mandatory for people whose salary (wages) is up to Rs. 15,000. As a company, we have enrolled everyone in the group medical insurance from United India Insurance. Consequently, we end up paying for the ESIC employee contribution of 1.75% and employer contribution of 4.25%, totaling about 6%, in addition to the group medical insurance.

Is there a way to opt-out of ESIC?

Can we do away with ESIC?

ESI Contribution Obligations

ESI contribution is a statutory obligation of the employer. The employer's contribution is 4.75% and not 4.25% of gross wages.

Mediclaim is not a substitute for ESI. You can't do away with ESI contributions for employees getting gross wages up to ₹15,000.

Regards,
Kamal

Thank you, Kamal, for correcting me on the percentage deduction. I know it is mandatory. I am just checking with you and the group if anyone has tried to do away with it by writing to ESIC or taking it up with them in some way or another.

Exemption from ESIC Act

The ESIC Act has provisions to grant exemption to employers who can provide superior or similar benefits to their employees, and not for any other reasons. Large public sector units generally get an exemption as they have 24-hour medical/hospital facilities.