How Can My Friend Continue ESI Membership After Reaching Coverage Limit?

Maintaining ESI Membership After Coverage Limit

I have a friend who was earlier given the ESI by his company, and accordingly, his subscription was deducted from his salary. However, he has reached a limit where he is possibly out of the ESI coverage. He, however, would like to maintain his membership and would not mind paying some additional amounts (Rs. 600 deducted earlier from his salary towards ESI subscription). I would be grateful if I could be guided on how he can do this and if any forms, etc., are to be filled out by him.

Regards,
Ravinder Verma

Dear Ravinder71,

No one can maintain their membership under ESIS once they are out of coverage of ESI except superannuated IP. In ESI, there is no voluntary coverage or contribution, as you said.

Dear Jagat Kumar ji,

No scheme in the world is more beneficial than ESIS.

Hi Everyone!

The employee can continue the ESI subscription. The government is not a loser by gaining any subscription. If the employee feels that he benefits from ESI Hospitals in his area, he should make use of the same. The employer has no right to stop him. However, HR should take an undertaking from the employee that he will not demand any compensation for medical expenses and will continue the subscription of ESI. In case of any issues, the company will not be responsible.

In my opinion, it is not the management but the employee who holds the fort as to whether to continue or not. If his salary exceeds ₹15,000/-, he automatically exits from ESIC benefits after a 6-month cycle (Apr-Sept or Oct-March). However, if the management, even after the lapse of this cycle, continues to pay ESI (both shares), then he will continue to enjoy the benefit. ESI is the enacted law. Any undertaking given or taken by the management (after the lapse) would be bad in law.

Examples Illustrating ESI Contribution

1) Suppose an employee's salary increases from below ₹15,000 to above ₹15,000 with effect from June. Still, the management would be required to continue his contribution till that cycle ends in September, and the employee would continue to derive the benefit (after a gap of 3 months) for another 6 months from January (next year). Personally, I find it disputable why an employee should wait for 9 months to derive the benefit, and I feel that this section of the law itself is flawed.

2) Secondly, despite having his salary exceed ₹15,000, if the management continues to contribute (both shares) towards ESI irrespective of the cycle period, no one can stop the employee from enjoying the benefit under the Act enshrined upon him.

3) A case to be noted here is that if you retire but still want to continue to enjoy the ESI benefit, then merely ₹10/month or ₹120/- per annum is required to be paid.

No doubt, ESIC is more beneficial for the lower strata, but it is also a fact that ESIC is not well-equipped to provide medically related facilities.

Regards,
Abdul Quadir.

Principal Employer's Obligations Under the ESI Act

1. The principal employer is required to deduct the contribution only from those employees who are coverable under the ESI Act, 1948, and the rules/regulations framed thereunder. Deducting contributions from employees who are not coverable due to reasons such as being out of coverage because of the wage ceiling is an offense of false declaration and is punishable under Section 84 of the said Act.

Recovery of Benefits Obtained Unlawfully

2. In situations where benefits have been obtained from ESIS, although the employee was not entitled, the said department can make recoveries under Section 70 of the said Act.

Mandatory Compliance with ESI Act Provisions

3. The provisions of the ESI Act, 1948, and the rules/regulations framed thereunder are not optional. Therefore, neither the employee nor the employer has any option except to comply with the provisions of the said Act.

Cessation of Employee Status and Benefits

4. When an employee ceases to be an "employee" under the said Act, all benefits are not available to him. He is not entitled to accident-related benefits because, on the date of the accident, he was not an "employee" (even though the accident may have occurred during his entitlement for medical benefit in the benefit period after his exit from the said scheme in the corresponding contribution period).

Medical Benefits for Retired Insured Persons

5. The provision of receiving medical benefits after the payment of Rs. 10/- per month as a contribution is applicable only in the case of "retired insured persons" (Rule 61) if the said Insured Person fulfills the conditions as laid down under the said Rule. Such facilities are not available to all retired insured persons.

A retired employee can contribute Rs. 120 per year and receive medical benefits from ESIC only if he is an I during retirement.

Only an employee who was an IP at the time of retirement alone is permitted to continue in ESI by contributing an annual contribution of Rs 120/-. A person who was excluded from ESI before his retirement is not eligible for this. At present, there is no provision in the Act for voluntary coverage. It is ideal to introduce voluntary coverage under the ESI scheme by paying employees' contribution with limited benefits.

Varghese Mathew
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