Can an Employee Opt Out of ESI if Already Covered by Spouse's Plan?

Sir,

Recently, one of the new employees who was appointed has given a letter along with her husband's ESI card number, stating that she is covered under ESI in her husband's company and does not wish to be covered by the present company as she is not interested. Please let us know whether she can be exempted from the ESI Act.

Regards,
Manjesh

She will get covered in her own working establishment and would get excluded from her husband's ESI card. Statutory contributions from wages/salary cannot be avoided.

ESI card numbers can be transferred to a new organization. However, it is noted by Mr. U.S. Sharma that this transfer cannot be avoided.

V. Murali

ESIC card clearly mentions that only those family members are eligible for family benefits who are dependent and not earning more than 5000/-.

In her husband's card, she is covered as a family member. Whereas, in her employment, she will be covered as an insured employee. A family member is entitled to avail medical benefits. Whereas, an insured person is entitled to all the benefits provided under the Act as per eligibility conditions.

ESI Coverage for Both Spouses

If both husband and wife are employed and contribute to ESI, both will have their names endorsed in the family details. However, family members are entitled only to medical benefits; they cannot avail themselves of sickness leave, maternity leave, or accidental cash wage benefits.

In ESIC rules, it is not specified anywhere that if either of the spouses is covered, the other would be exempt. ESIC is a statutory contribution for both employees and employers.

If the employee wishes to get more clarity, they can visit the RO, express their views, and, if able to convince the RO, obtain an exemption certificate for exemption from ESIC. Merely writing a letter to the employer does not entitle the employee to exemption from statutory contributions.

Working parents are also considered family members and can be added to the card. However, ESIC is based on a biometric system, so once added, the working parents are placed in "inactive members."

In this situation, if both are working, they can add the spouse as a family member, but ESIC will automatically make it inactive as the Aadhaar cards of both will be cross-verified.

If one spouse leaves the service and becomes non-contributory, then the working spouse can request the employer or HR to make the inactive member active to avail the "family benefits."