Articles 546 views January 10, 2020

Employment State Insurance Scheme (ESIS)

Employee State Insurance Scheme (ESIS) is a government-provided health insurance scheme that is offered to the employees of government as well as private enterprises. It offers financial protection for illnesses, death, disability and also for periods when the insured cannot earn a living due to an injury that happened due to his employment.

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Features of the Employment State Insurance Scheme (ESIS)

Better known as the Employees State Insurance Scheme, the ESIS is wonderful medical insurance for those who rely on their employers for financial assistance at the time of an emergency. Here are the features of the Employees State Insurance Scheme in greater detail:

1. Applicability – The Employee State Insurance Scheme(ESIS) is applicable to all organisations in India that employ a minimum of 10 workers. These include factories, private offices, cinema halls, hotels, stores, restaurants, malls, motor establishments, publication houses, educational institutes, medical centres, etc. All employees of firms that have more than 10 employees are eligible for the Employee State Insurance Scheme(ESIS).

2. Scope of cover – The insurance cover is available to the employees and their dependents. The ESI scheme is applicable when an employee or his direct dependents require medical aid due to an illness contracted due to a work hazard. The same applies to disability taking place due to workplace hazards. If there is a loss of income, financial compensation is available for the period when the income stops. If the employee dies in a work-related incident, his dependents get a sum assured from the Employee State Insurance Scheme ( ESIS). female employees are also eligible for maternity benefits, including ab paid leave for their maternity break.

3. Financing – The financing of the Employee State Insurance Scheme (ESIS) costs are done by the employee and his employer. A fixed percentage of the wage of an employee is deducted and set in the ESI fund. This amounts to 1.75% of his salary. A percentage of 4.7% is paid to the same fund by the employer as well. The ESIS, therefore, works like most other government schemes where the self-financing angle is used. The state government also contributes to the fund of each employee to ensure a substantial sum is available when there is a need to use the claim by the employee or his dependent family members.

4. Payouts – The employees covered under the ESI scheme are eligible to get complete medical insurance coverage from the first day of their employment. This proves to be very helpful as many people, especially workers in low lying socio-economic areas stay without health insurance.

Benefits of the Employment State Insurance Scheme (ESIS)

Now let us understand the benefits on offer under this scheme:

1. Insurance for everyone – The Employee State Insurance Scheme(ESIS) makes it possible for everyone in India to get insurance. Health insurance is a huge necessity, given how expensive health care costs are these days. However, many people, especially those who belong to the rural areas, live without health insurance. When they get employed, the ESI scheme automatically fetches them, as well as their dependents, the much-needed health insurance covers. This proves to be highly efficient for the individuals and also for the nation as a whole as more people remain healthy in this manner.

2. Affordable – Health insurance is widely available in India, but it comes at a price. Not everyone thus can buy a personal health insurance policy. The ESI scheme is a great way to find affordable health insurance. As mentioned above, only 1.75% of the employees’ wages are deducted for this scheme, which is affordable for everyone. As a result, everyone finds an economic health insurance option and gets the cover they need at a very low rate.

3. Death benefit – Apart from the health insurance component, the Employee State Insurance Scheme(ESIS) also offers death and/or disability benefit. This is highly beneficial as people often live without life insurance too. When the employee is the sole breadwinner of his family, a life cover, as well as a disability cover, proves to be invaluable for the financial well-being of his other family members.

4. Easy to get – And finally, an insurance cover under the ESI scheme is very easy to get. Many people shy away from buying insurance because of the complicated application process. But in the case of the ESIS, the employee automatically gets the coverage without having to worry about procedures and documents.

These are the main benefits that make the Employee State Insurance Scheme(ESIS) one of the most beneficial and successful health insurance schemes in India presently.

The final word

As you can see, there are a lot of advantages and uses of the Employee State Insurance Scheme(ESIS). Anyone who works in a firm that has more than 10 employees automatically gets this cover. The insurance coverage not only protects the employee, but it also protects his family members, in life and after his death as well. So get enrolled in the ESIS if you have not done so as yet.

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