Health Insurance Overlap: Is ESI Deduction Still Mandatory for Employees?

If an employee has Aarogya Sree, health insurance, and other insurance, is ESI deduction mandatory?

If your establishment is covered under the ESI Act and the employee's gross salary is below the ceiling of Rs 21,000 per month, such employees need to be covered under the Act.

Yes, as Srinath has aptly replied, ESI is a statutory, and hence it is mandatory for health insurance. ESI has wider coverage than any other insurance.

If your organization is under the declared area of ESI coverage, ESI alone will hold good, which is a Central Act mandatory statutory. Those who are out of the coverage limit of ESI, i.e., drawing a gross salary of Rs. 21,000, you may extend such medical coverage as a welfare measure or a morale boost to its employees.

- V. Murali

Hi Vijju,

I would like to inform you that, according to my knowledge, if an employee has another insurance, ESIC is not mandatory. Just take out an insurance policy like an employee compensation policy, and the policy must be taken up to Rs 5 lakh.

Dear Kiran Bhatnagar,

It would be wise for you to please check the ESI Benefits and compare them with any other insurance policy. This will help you understand the differences.

Dear Kiran,

Please share the notification where ESIC is an option if we have different insurance.

Hi Vijju,

If an employee is covered under the Wages Ceiling of Rs. 21,000, ESIC is mandatory, while other insurances are not mandatory.

Thanks!

Regards,
Hariprasath
Corporate HR

1. Employee, on his own volition, may take any amount of insurance for himself and/or his family. What does the company have to do with it? This question indicates improper intentions.

2. ESI is a statutory benefit extended to employees through the ESI Act. It is mandatory if the employee falls within the coverage category by virtue of his salary.

Dear Friends, kindly listen to my opinion. My name is Siva. I'm working for a corporate company with a salary under 20,000/-. I have one doubt about the topics. I have insurance coverage of 1-Lakh, and my mother also has coverage of 1-Lakh. If we encounter any problems and need to go to the hospital, the coverage is under 1-Lakh. If we don't have this coverage, we can use the ESI option. However, we already have insurance coverage, so why are they deducting my "money"? Please consider that many people already have low salaries and face numerous problems in society.

Corporate companies and the burden on low-class people

Corporate companies are considered intelligent, but who is bearing the burden of the low-class people's expenses?

For example:
- For a single person: 14,000 x 1.76 / 100 = 245 INR.
- For 100,000 people: 245 x 1,00,000 = 24,500,000 (two crore forty-five lakh).

The issue with health insurance policies

Then why do they offer health insurance policies? Many insurance companies take advantage of innocent people without providing proper services.

Some people only face injuries, illnesses, and unexpected situations. For instance, in an office with 100 employees, if 50 people use the 1 Lakh insurance policy for medicines and each head costs 25,000, the total is 12,50,000, leaving a balance of 8,75,000. Where does this excess money go? People should realize this issue sooner rather than later.

This problem is not limited to a single company; the report of March 2018 shows that there are 13,94,819 companies in India facing similar challenges.

Conclusion

In conclusion, I urge you to avoid deducting ESI funds from the middle and lower class. If they have insurance coverage, please do not devalue their benefits.

As a Common Man,
Siva
[Phone Number Removed For Privacy-Reasons]
Email: [Email Removed For Privacy Reasons]

Understanding ESI Obligations

Please have a clear understanding of ESI. Once ESI is applicable to your establishment, there is NO exemption under any conditions. It is NOT an option for the employer or employee. Having health or accident insurance is NO excuse. Coverage under ESI is a statutory obligation like EPF, aimed at social security coupled with healthcare and management in accidents and death, all bundled in one, at a throwaway cost which is partly met by the employer through contribution.

Can you tell which health insurance scheme/company pays towards 'salary' during an employee's leave? ESI guarantees reasonable treatment at no additional cost to the employee, compensates for the sustained accident, irrespective of 'in the course of employment' or outside, and ensures payment and leave during maternity. Other insurance schemes, both health and accident/life, are NOT comparable with ESI; above all, there is no option. Operational difficulties cannot undermine the usability of ESI schemes. Everyone, please read the ESI Act fully before advocating other schemes.