Maternity Insurance vs. Company Liability: Are Employers Still Responsible for Benefits?

Dear Seniors, Please share your views on my question or confusion below:

Maternity Insurance and Company Liability

My company is going to provide medical insurance to all employees, with maternity cover for all female employees who are not covered under ESIC. If my company provides this type of insurance to employees, will the company still be liable to pay maternity benefits to female employees?

Thanks in advance,

Mukesh Singh

Understanding Medical Insurance and Maternity Leave

Medical insurance talks about only medical expenses; it will not cover leave with wages.

Under the Maternity Benefit Act, the employer has to provide 12 weeks of leave with wages, whether they give medical aid or not. Legally sanctioning leave with wages is a requirement. Once an employee comes out of ESI, no medical aid is obligatory under any statute. Hence, even if you take a medical insurance policy, giving 12 weeks of paid leave under the Maternity Benefit Act is obligatory.

Regards,
Sivasankaran

Maternity Benefit Act Compliance

You cannot take any exception from the main provisions of the Maternity Benefit Act. If your policy provides for postnatal care to women, then you need not pay the medical bonus of Rs 3500 as provided in the Act. However, it is mandatory that you give 12 weeks of leave with salary, even if you have a policy exclusively for maternity benefits.

In respect of ESI-covered employees, the obligation to extend maternity benefits will be taken care of by the ESIC. It should also be noted that for those employees who are not eligible to receive maternity benefits from ESIC due to reasons such as their contribution period not commencing or not being employed for at least 70 days during the two contribution periods immediately preceding the date of delivery, the responsibility for granting benefits falls on the employer. This means that the Maternity Benefit Act cannot be substituted by any other policies.

Regards,
Madhu.T.K

You mentioned that your employer is introducing a medical insurance scheme covering maternity care for women not covered by ESIC. You need to verify if it includes benefits such as medical bonuses for prenatal and postnatal care, maternity benefits (wages during the 12-week leave), and other benefits. If the benefits provided by the scheme are more favorable than those under the Act, then a woman can choose to avail of the scheme's benefits. In such a scenario, a female employee cannot avail of benefits under both the insurance scheme and the Act.

Regards,
B. Saikumar Mumbai

It is quite obvious that the employer has introduced a scheme by providing medical coverage for all those employees not covered under the provisions of the ESI Act, 1948. The provision of maternity benefits will be applicable even in cases where the employer is providing additional welfare facilities for female employees. An employer cannot evade their responsibility by introducing medical coverage under the MB Act.

Thanks & Regards,
R.B. Yadav
Advocate

If the insurance scheme provides all benefits under the Act, then you can get an exemption from the Act by a specific order from your state government under section 26 of the MB Act.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]