ESI community medicine

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Employees' State Insurance (ESI) Scheme

Source: Park's Textbook of Preventive and Social Medicine

Overview

The ESI Scheme is a health insurance and social security scheme for industrial workers in India, governed by the Employees' State Insurance Act, 1948. It is one of the two large, well-organized health insurance schemes in India (the other being the Central Government Health Scheme/CGHS). Together they cover two large groups of wage-earners in the country and provide medical care plus essential preventive and promotive health services.

Legislative Background

The social security measures for industrial workers in India include:

Workmen's Compensation Act, 1923
Central Maternity Benefit Act, 1961
Employees' State Insurance Act, 1948
The Family Pension Scheme, 1971

The ESI Act is one of the two most important factory laws in India (along with the Factories Act, 1948).

Scope (Who is Covered?)

Original Act (1948): Covered all power-using factories (excluding mines, railways, defence) employing 10 or more persons.
ESI Amendment Act, 1975 extended coverage to:
- Small factories employing 10+ persons (whether or not power is used)
- Shops
- Hotels and restaurants
- Cinemas and theatres
- Road-motor transport establishments
- Newspaper establishments
- Private medical and educational institutions employing 20+ persons (in some states)
From 1.5.2010: Covers all employees (manual, clerical, supervisory, technical) earning up to Rs. 15,000/month
Revised from 6.9.2016: Ceiling raised to Rs. 21,000/month
Provisions can be extended to any agricultural or commercial establishment
The Act extends to the whole of India

Administration (ESI Corporation)

The scheme is administered by an autonomous body - the ESI Corporation (ESIC):

Post	Person
Chairman	Union Minister for Labour
Vice-Chairman	Secretary to Govt. of India, Ministry of Labour
Chief Executive	Director General

Four Principal Officers:

Insurance Commissioner
Medical Commissioner
Financial Commissioner
Actuary

A Medical Benefit Council (headed by DGHS, Government of India) advises on medical relief.

Infrastructure (as of 31.3.2020):

1,526 ESI dispensaries
1,753 panel clinics
307 diagnostic centres
159 ESI hospitals + 42 hospital annexes
22,600+ beds
23 regional offices, 37 sub-regional offices, 559 branch offices, 185 cash offices, 406 inspection offices
Covers 309 lakh employees (including 62.6 lakh women); total beneficiaries ~1,324 lakhs (13.24 crores)
Covers ~341 lakh family units from ~7.83 lakh factories/establishments

Finance (Contributions)

Contributor	Rate (revised w.e.f. 1.7.2019)
Employer	3.25% of total wage bill
Employee	0.75% of wages
State Government	1/8 of total cost of medical care
ESI Corporation	7/8 of total cost of medical care

Exemption: Employees earning daily wages below Rs. 176 are exempt from paying their contribution.

Benefits to Employees

The Act provides 7 benefits:

1. Medical Benefit

Full medical care (in-patient + out-patient), free of cost, for sickness, employment injury, and maternity. Services include:

Out-patient care
Supply of drugs and dressings
Specialist services (all branches)
Pathological and radiological investigations
Domiciliary services
Antenatal, natal and postnatal services
Immunization and family planning services
Emergency and ambulance services
Health education
In-patient treatment (including referrals outside the state if needed)

Medical care delivery patterns:

Direct pattern:
- Areas with 1,000+ employee family units: full-time service dispensaries (doctor sees ~80 OPD cases/day + 1 home visit)
- Areas with <750 employees: part-time ESI dispensaries
- Scattered employees: mobile dispensaries
Indirect/Panel pattern: Panel of private practitioners appointed as "Insurance Medical Practitioners"

2. Sickness Benefit

Cash payment when sick, certified by Insurance Medical Officer/Practitioner
Maximum 91 days in any continuous period of 365 days
Rate: ~70% of average daily wages
Insured person is protected from dismissal/discharge during the sickness period

Extended Sickness Benefit: For 34 specified long-term diseases (if 2+ years continuous employment), benefit extended up to 2 years. Diseases include:

Category	Diseases
Infectious	TB, Leprosy, Chronic empyema, AIDS
Neoplasms	Malignant diseases
Endocrine/Metabolic	Diabetes with retinopathy/nephropathy/diabetic foot
Nervous system	Monoplegia, Hemiplegia, Paraplegia, Parkinson's, Myasthenia Gravis, Glaucoma, Retinal detachment
Cardiovascular	Unstable angina, MI (EF <45%), CCF, Valvular disease, Cardiomyopathy
Chest	Bronchiectasis, ILD, COPD with Cor Pulmonale
Digestive	Cirrhosis with ascites / Chronic active hepatitis
Orthopaedic	Prolapsed disc, Amputation of lower limb, Chronic osteomyelitis
Psychosis	Schizophrenia, Endogenous depression, MDP, Dementia
Others	Burns >20% with infection, CRF, Reynaud's/Buerger's disease

Enhanced Sickness Benefit (for sterilisation):

Tubectomy (women): 14 days at double the standard rate (= full wages)
Vasectomy (men): 7 days at double the standard rate

3. Maternity Benefit

Cash benefit payable for confinement, miscarriage, sickness arising from confinement/pregnancy
Duration:
- Confinement: 26 weeks
- Miscarriage: 6 weeks
- Sickness arising out of confinement: 30 days
Rate: ~full wages
Confinement expenses: Rs. 7,500 per confinement

4. Disablement Benefit

Cash + free medical treatment for temporary or permanent disablement from employment injury or occupational disease
Temporary disablement: ~90% of wages for the duration of disablement
Total permanent disablement: Life pension (based on loss of earning capacity assessed by a medical board)
Partial permanent disablement: Proportionate life pension

5. Dependant's Benefit

Payable to dependants when death results from employment injury
Pension: 90% of wages, shared by dependants in a fixed ratio
Eligible children entitled up to age 18 (daughter's benefit withdrawn on marriage if earlier)

6. Funeral Expenses

Lump sum cash payment: up to Rs. 15,000

7. Rehabilitation Allowance

On payment of Rs. 10/month, the insured person and family continue to receive medical treatment after permanent disablement or retirement

Benefits to Employers

Exemption from the Workmen's Compensation Act, 1923
Exemption from the Maternity Benefit Act, 1961
Exemption from arranging/paying for employees' medical care
Rebate under Income Tax Act on ESI contributions
Healthy workforce

Rajiv Gandhi Shramik Kalyan Yojana (Unemployment Scheme)

Launched 1 April 2005 - provides unemployment allowance for ESI-covered employees rendered unemployed involuntarily due to:

Factory/establishment closure
Retrenchment
Permanent invalidity from non-employment injury

Eligibility: Minimum 5 years of insurable employment and contribution under the scheme

Benefit:

Unemployment allowance for a maximum 6 months during entire service (availed in one or multiple spells, minimum 1 month)
Rate: Standard benefit rate corresponding to average daily wages
Medical care continues during the unemployment period for the insured person and family

ESI vs. CGHS (Comparison)

Feature	ESI	CGHS
Covers	Industrial/commercial workers	Central Government employees
Introduced	1948	1954 (originally as Contributory Health Service Scheme)
Employer	Private sector	Government of India
Beneficiaries	~13.24 crores (2020)	~42.76 lakhs
Contribution	Employer 3.25% + Employee 0.75%	Cooperative effort
Facilities	ESI hospitals, dispensaries, panel clinics	Dispensaries + empanelled hospitals

Park's Textbook of Preventive and Social Medicine, Chapter on Occupational Health and Health Care System in India

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