Can Employees in Non-Implemented Areas Access ESIC Benefits? Seeking Clarifications

Clarifications Needed on ESIC Benefits

I need clarifications and help regarding ESIC.

1. Suppose an employee is working in ESIC non-implemented areas and wants to take advantage of the medical benefit only from ESIC. Are there any provisions for obtaining the same?

2. If an employer is deducting contributions under ESIC and also contributing and submitting employer contributions for employees working in ESIC non-implemented areas, is it possible for these employees to receive benefits from ESIC (medical benefits for family members and self)?

3. If an employee is working in an ESIC non-implemented area (in any factory outside the city) and lives in an ESIC implemented area (in the city), commuting daily, and wants to take advantage of ESIC (medical benefits for self and family members), is there any provision for the employer to make ESIC deductions for these employees and also make employer contributions to facilitate them?

4. If ESIC is not applicable in non-implemented areas, is there any other option besides the WC Act for obtaining medical benefits for these employees?

Please reply. Your comments and advice are highly invited.

Regards,
Naved Shaikh.

ESIC Deductions and Benefits in Non-Implemented Areas

1. Not Possible

2. The company will not deduct if it is not in an implemented area.

3. ESIC is formed and is duly connected with the wages of workers. Therefore, it is mandatory that the establishment comes under the implemented area. If the establishment is not in the implemented area, then there is no meaning to deduct ESIC, and the employer can't get any benefit from ESIC, whether they live inside or outside the limits of ESIC.

Under the Workers' Compensation Act, the employer has the legal liability to pay compensation to employees who are uncovered or fall under the non-implemented zone of ESIC.

Responses to Your Queries

- **1st Point:** There are no provisions to take benefits out of ESIC; rather, the employer can contribute to the liability of employees under the Indian Fatal Accident Act of 1855. Under this policy.

- **Secondly,** it is noteworthy that ESIC non-implemented areas do not provide any benefits to employees. Therefore, it is not correct that the employer is doing the right thing by deducting contributions.

- It doesn't matter if the worker is living in an implemented area; if they are registered to work under a non-implemented area, they are not eligible for the same.

- Your fourth point is very valid, and employees can receive medical benefits by compensating them under the E.S.I. Act for diseases sustained or body injuries during their employment under the WC Act.

P.S: The WC Act states that E.S.I. covers only the IP, not the family/dependents.

* Indian Fatal Accident Act 1855

If you have any further questions, please feel free to reach out.

Best regards,

Thanks for your quick response. But the matter is, the benefit given by ESIC is far better than any other private firm in terms of medical benefits (super specialist medical treatment/cashless). If any employer wants to provide full coverage (to employees with a salary below 15,000/- in non-implemented areas) in terms of medical benefits, then?

Limitations of the WC Act

The WC Act only covers accidental cases caused in the office/factory; outside the factory, it is not applicable. In terms of medical benefits, as per the WC, the employer is not liable to provide any kind of medical facility to employees and their family members.

Please suggest a way forward.

Workers' Compensation Act vs. Employees' State Insurance Act

1. The Workers' Compensation Act is not a replacement for the Employees' State Insurance Act; it serves a different purpose.

2. In the case of an establishment located in a non-implemented Employees' State Insurance (ESI) area, it is advisable to provide coverage for employees under medical policies that are suitable for them. This suggestion aims to maintain high morale among the Human Resources.

Regards,
Murugesan R
[Email Removed For Privacy Reasons]

The area where my plant is located is also not covered by ESIC. Workmen's Compensation Policy is one way of handling this liability, but it does not cover minor illnesses and sick leaves. We have opted for a Personal Accident Policy which covers fatal accidents but not minor accidents. Therefore, we have also provided coverage for employees under a Cashless Medical Insurance Policy - category-wise. For workers, we have extended coverage to their families and parents. For staff, it includes only the employee and immediate family. There are numerous combinations available here. Choose your requirements and budget carefully.

I recommend speaking with the insurance companies; they will be your best advisors for the plans.

Regards,
Kalpana Iyer

Please note one thing only: if the organization is established in a non-notification area, you cannot deduct the ESI unless they live in an ESIC area. In such a case, you cannot avail any benefits of ESIC.

If you wish to provide benefits for your employees and their family members, you can consider taking a Group Health Insurance Policy. Additionally, it is essential to have an Employee Compensation Policy (WC policy) for your employees.

Regards,