Dear Sanjay,
So far as I know, there is no age limit for coverage of ESI. When the salary of an existing member/employee exceeds the threshold during the contribution period, contribution is to be made on the actual salary till the end of the contribution period and only afterwards he would cease to be a member by virtue of his higher salary.
Of course you can reemploy a retired employee but why should you prefer to pay him in cash? How will you account for it?
Any way, in such a situation, you can take an insurance policy under the Employees Compensation Act,1923 provided his salary is more than Rs.21000-00 pm.