Can a Mediclaim Policy Legally Replace Workmen's Compensation? Let's Discuss

Dear all,

Can a mediclaim policy be a substitute for a workmen's compensation policy legally?

Regards,
V K Sharma

No, mediclaim policy cannot be a substitute for workmen's compensation policy legally.

Only to add LIC has a plan to replace the liability of workers' compensation by an insurance policy. This department is called P&G of LIC. It is notified by the labor department.

WC Policy is an act under the Government of India passed in parliament that provides coverage for all incidents that occur in a workplace. Medical policy refers to illnesses of the human body only, which can be arranged by individuals or companies as well.

V. Murali

Workmen Compensation. It means compensation that is paid under the Workmen Compensation Act. See this Employer's Liability and Calculation of Compensation under Workmen's Compensation Act.

Understanding Workmen's Compensation vs. Mediclaim

The Workmen's Compensation Act provides employees with compensation for any injury resulting in temporary or permanent disability or death during the course of employment. This compensation can be in the form of a lump sum or monthly payments, covering all medical expenses related to the injury.

On the other hand, mediclaim only covers the cost of hospitalization and does not include any lump sum compensation or ongoing expenses like medications and outpatient treatments necessary for the employee.

In my opinion, opting for mediclaim alone may not be a wise decision considering the limitations it has in comparison to workmen's compensation. Interestingly, the cost of workmen's compensation insurance is lower than that of mediclaim for an equivalent coverage amount.

Workmen Compensation Policy vs. Mediclaim Policy

Workmen Compensation Policy (now known as Employees' Compensation Policy) covers industrial injuries that occur during duty, providing benefits or compensation for temporary/permanent disablement or death benefits.

Under this policy, you can also cover hospitalization expenses due to accidents up to Rs. 1 lakh with a nominal additional premium. This benefit started in April 2015. Previously, hospitalization expenses were not covered, and employers had to bear these costs.

On the other hand, a Mediclaim Policy covers only hospitalization expenses during illness or accidents based on coverage limits, with numerous clauses such as caps, preexisting diseases, dental treatments, cosmetic surgeries, etc., but it does not provide any compensation.

Regards, Suresh