Can We Replace ESIC with Group Accident Insurance for Our Field Staff? Seeking Advice from HR Experts

We are a pharmaceutical company. Our 90% of the staff is field-oriented. They cannot avail the benefits of ESIC. We think ESIC is a useless thing, and money (employee share and employer share) is being wasted on ESIC. We are going to purchase a Group Insurance (Accidental) policy for our employees. Can we stop deducting or paying ESIC now? I know this is a silly question. But you all are my seniors who can clarify the point.

"We think ESIC is a useless thing." Why this thought process?

Any GOI scheme has babugiri involved, but it has been and will be a lifesaver for employees covered under it. You can add to the welfare measures, but basic welfare schemes of GOI cannot be overlooked.

An individual's perception cannot be the yardstick for measuring the usefulness of social welfare schemes of the Government of India. Although the group policy will be easier to implement, will it provide benefits to employees on par with ESIC? Just consider the case of Maternity Benefit.

Secondly, ESIC membership is portable. A new employee joining your organization can be an existing member of ESIC from a previous organization. One cannot formulate policies in isolation from such Government of India schemes.

Understanding ESIC: Ignorance or Evasion?

There may be two ways of understanding the question: ignorance about ESIC or intelligence to evade ESIC. However, Group Insurance or Accidental Benefit may cover the insured person during any eventuality that may occur, but ESIC covers a basket of benefits. It's not only beneficial to the insured person but also to the entire family during various urgencies.

There may be sporadic cases of non-responsiveness by the ESIC team, but that can't be generalized by taking a risk yourself and giving risk to your employees while not being covered under ESIC. It's all about how well you are aware of obtaining the services under ESIC, instead of evading.

Maximizing ESIC Benefits for Field Staff

We are paying almost 3 lakh every month to ESIC, but we are receiving about 20k in benefits for our employees. This doesn't mean ESIC is useless; rather, we are not utilizing it effectively. Never pay an IP for their sick leave or give an advance for any medical emergencies or needs. Instead, educate them about ESIC benefits. With 90+ field staff, I organized a roadshow for the same cause for 400+ staff across 28 locations. Now, no employee will come and ask for sick leave, medical assistance, or salary advance for medical emergencies.

Please remember, increasing the limit from 15,000 to 25,000 is on the anvil and may get approved anytime. So, start encouraging them to utilize ESIC.

For more clarity and details, reach me at [Email Removed For Privacy Reasons].

Regards, tqmmohan

The Cost and Process of ESIC

I agree with you. If we are talking about ESIC, it is much more costly compared to a policy, and the benefits are negligible. Here is the process:

1. If you want normal or mid-level treatment, you should be prepared to spend at least 4 days:
Day 1: Get approval from the ESIC dispensary
Day 2: Go to the ESIC hospital and wait for the doctor (9:00 am to 12:00 pm only)
Day 3: Tests as per the doctor's recommendation (9 am to 12 pm)
Day 4: Meet the doctor again with the test report

This process may take up your whole week. In the case of a regular employee seeking benefits from ESIC, they are deceived by the government as they lose their daily wages and performance in the company chart. Consequently, there is a significant amount of money wasted in ESIC by both the employer and employee. ESIC focuses more on building hospitals and dispensaries rather than improving their services.

Understanding the Benefits of ESIC

Your statement stems from the fact that you have not understood the numerous benefits of ESIC. Not even insurance companies cover areas that ESI does. It's been a boon to the Indian industry, where most workers are from the lower middle class.

I will just give you an example of one of our experiences. One of our sales officers met with an accident on his bike on a Sunday when he and his wife were returning from a movie in Shimoga. They were very seriously injured, and some kind-hearted souls rushed them to the nearest nursing home. After first aid, they were rushed to the government hospital. The doctors were treating them. His kidney was damaged, and his wife's skull was broken. The moment they knew the person was covered under ESI, the doctors of the government hospital themselves contacted the local ESI doctor and asked him to come over for a meeting. They explained the complications of the case, and the local ESI doctor referred them to the referral hospitals in Bangalore. The husband was admitted to St. John's, and the wife to Nimhans. These were the referral hospitals of ESI. The best hospitals in the country are enumerated as referral hospitals of ESI. The bills were sent to ESI for payment. ESI had to shell out close to Rs. 65 lakhs for both of them, and they paid it directly to the hospital long after the discharge. An allowance was also paid to the caretaker, which was reimbursed through the company. If the same treatment had been provided by themselves or an insurance company, the bill would have been over 2 crores. And the mindset of corporate hospitals to charge excessively when insurance is covered by a private insurance company. Unwanted tests are being prescribed by the doctors to extract the entitlements out of the policy.

ESI Scheme: A Social Security Asset

The ESI scheme is one of the most wonderful social security schemes for employees. White-collared employees have a mindset where they do not want to go to the government hospital. Ask your workers. They will vouch for ESI and its benefits. Let me also assure you that there is no red tape at ESI hospitals, unlike what happens in government hospitals. If there were red tape, the unions would take care of it. And the ESI staff know about the consequences if unions intervene. ESI hospitals are easy to deal with.

I would suggest meeting up with a senior IR manager of a factory and requesting him to give you an orientation on the benefits of the ESI scheme. Many people think it's just maternity-related and maybe a death benefit or funeral benefit. It's not so. It's a state insurance for employees with some amazing benefits which no private insurance companies can afford to offer for the minuscule amount that is paid as a premium.

Regards

ESI Act is a social welfare act. If you are covered under this act, then you have to comply with it. There is no escape. And "once covered is always covered" under ESI Act.

Check www.labourlawhub.com for further information.

As the "anonymous member" stated above, ESIC has been a lifesaver for many people. One of my guards was also saved from penury by ESIC paying the treatment cost. The sum was over 2 lakh rupees.

Babugiri is a universal phenomenon in our nation, and no change in their attitude is happening as they hold up national progress. But that is a different topic.

ESIC, anyway, is government-legislated, and the industry has to comply. Discussing the pros and cons of ESIC when it is compulsory is of little use. Probably those who have different views on ESIC may write to ESIC as feedback.

Hi, Celsius HR,

It would be very helpful if you could elaborate on the statement that "our 90% staff is field-oriented, they cannot avail the benefits of ESIC." As I understand it, the ESIC card is valid throughout India.

Our learned members of the forum have already given their opinion, which I fully endorse! One of our workers from my Belgaum Factory even underwent knee replacement surgery free of cost. This is a very expensive procedure otherwise!

Benefits of ESIC

As Mr. Nathrao suggested, instead of avoiding, why not create awareness of the benefits of ESIC and encourage your members to use it effectively? Please contact your local ESIC office, who will send their representatives to your premises and conduct a camp. They would educate your members on the benefits of ESIC and provide a list of their hospitals as well as private hospitals that are also providing ESIC benefits.

Regards,
Vineeta

Can someone explain the role of HR in obtaining ESI benefits for employees? Currently, I am tasked with issuing temporary identity certificates to employees provided by the ESI consultant. Employees must then visit the nearest ESI dispensary and office to register. This process is causing employees to not take advantage of ESI benefits. Can someone explain the process of obtaining an ESI card for employees so they can access these benefits?