When Should We Start Health Insurance After ESI Stops Due to Salary Increase?

Dear Seniors, We provide health insurance to employees whose salary is more than $21,000, and we do not deduct their Employee State Insurance (ESI). If an employee's salary exceeds $21,000 in April or October, we stop deducting their ESI and provide them with Health Insurance. I would like to understand when we should begin offering health insurance to our employees—should it be from April/October or when their benefit period expires? As far as I am aware, an employee remains eligible for all ESI benefits for the next six months if ESI deductions cease in April or October due to a salary increase. Kindly guide me.

Thank you.

Hello Gajinder, as you have already mentioned everything correctly, you can apply for health insurance anytime after the increase in salary wages of any employee. It is not necessary that you can apply only after April or October.

Hi, Even if you consider and recommend Mediclaim insurance (health insurance) to all employees, including those covered under ESI, having Mediclaim in place allows everyone to afford quality treatment at private hospitals.

Regarding the continuation of ESI contributions
In case of a salary hike in the middle of the contribution period (April-Sept and Oct-Mar) resulting in a gross salary increase exceeding Rs. 21,000, the contribution should continue until the end of the contribution period, either by September end or March end.

Thank you.

It is true that an employee becoming out of ESI coverage will continue to get medical assistance until the benefit period ends. However, this does not mean that the employee will remain as an insured employee once he becomes out of the ESI scheme. Therefore, if an accident occurs, he will not receive the benefits. Accident benefits are available only to an "insured employee" while on duty, and since he has ceased to be an insured employee, he will not receive benefits such as disablement benefits, etc. It is advisable to cover such employees who exit the ESI immediately after the contribution period, i.e., in April or October itself.

I second the view of Mr. VM Lakshminarayanan. It is very clear that even though the employee is out of the bracket, i.e., earning more than 21,000 during the contribution period, the subscription will continue until March or September. From April or October, the subscription can be discontinued. The insurance can be taken from the date he starts getting paid over 21,000 for him to be covered under any contingency.