Understanding the Workmen's Compensation Act of 1923: Does It Include Mediclaim Coverage?

Please clarify, does the Workmen's Compensation Act of 1923 cover only fatal and non-fatal accidents? Does it include mediclaim coverage or not? If it does, how can we make changes to the existing WC policy?

Employee Compensation Act 1923: An Overview

Presently, there is no Workmen Compensation Act 1923; it has been renamed as the Employee Compensation (EC) Act 1923, and a lot of changes have been made. The scope of Mediclaim and EC are different. EC is applicable only for employment-related injuries and provides compensation in such cases, whether they are fatal or non-fatal (with at least three days' incapacity to work), while a Mediclaim policy can provide relief in cases well beyond EC, depending on its coverage. A Mediclaim is meant to compensate for the expenses incurred, whereas EC provides compensation for the future loss of earning capacity.

Dear Colleague,

Probably, you are inquiring about the Employees' Compensation Policy, which supports the employer by assuming the risk under the policy to cover compensation and provide other support to the employees as mandated by the provisions of the Employees' Compensation Act 1923.

The policy is typically obtained from an insurance company by an employer to mitigate the risk of compensation under the EC Act 1923. The scope varies among different insurance companies. Therefore, it is important to specify the coverage needed for your employees by engaging in effective negotiations to include additional risk cover, medical expenses, hospitalization coverage, and other necessary provisions by paying an extra premium.

The policy acquired from the market typically includes standard features such as compensation for fatality or disability. However, you have the option to customize the terms based on your requirements by paying an additional risk-based premium, a service offered by many policies in accordance with the internal procedures of insurance companies. It is advisable to engage in discussions with your insurance company regarding this matter.

Please feel free to discuss this further with your insurance provider.

If I remember correctly, I think insurance companies have started extending the benefit of Mediclaim coverage to WC/EC Policies since 2013 with some additional premium. The minimum Mediclaim coverage is INR 50,000. Many organizations are using this facility along with the EC policies.

Regards,
Suresh

Medical Benefits and Reimbursement Policy

My organization has an EC policy with medical benefits up to 1 lakh. The only issue we face is that there is no cashless facility, so medical reimbursement is a claim. The claim gets settled in two parts: (a) medical reimbursement and (b) compensation, both are generally credited directly to the worker. Since there is no cashless feature, the medical expenses are borne by the affected worker and reimbursed as above, or the company bears it, in which case the amount received as medical reimbursement is then refunded to the company by the worker. This arrangement has been working smoothly, and we haven't had any issues in this regard to date.

There was an amendment in the Employee Compensation Act in the year 2009, and subsection 2A was inserted under Section 4, which reads as follows:

‘(2A) The employee shall be reimbursed the actual medical expenditure incurred by him for treatment of injuries caused during the course of employment.’

After this amendment, it is obligatory for an employer to cover the medical expenses without any limit.

Under the EC Policy, the Insurance Company also provides coverage against medical expenses, but the cost of the premium is high.

Regards, Dr Kamlesh Agrawal
Mumbai