ESI ACT for psm exam from park full detailed explanation
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ESI Act (Employees' State Insurance Act, 1948) - Full Explanation for PSM Exam
Source: Park's Textbook of Preventive and Social Medicine
OVERVIEW
The Employees' State Insurance (ESI) Act was passed in 1948 and subsequently amended in 1975, 1984, 1989, 2010, and 2019. It is an important measure of social security and health insurance for industrial workers in India. It provides certain cash and medical benefits to industrial employees in case of:
- Sickness
- Maternity
- Employment injury
SCOPE
The Act extends to the whole of India.
Original coverage (ESI Act 1948): All power-using factories (other than seasonal factories) with 10 or more persons employed - excluding mines, railways, and defence establishments.
Extended coverage under ESI (Amendment) Act 1975 to:
- Small factories employing 10 or more persons, whether power is used or not
- Shops
- Hotels and restaurants
- Cinemas and theatres
- Road-motor transport establishments
- Newspaper establishments
- Private medical and educational institutions employing 20 or more persons (in some states)
Wage ceiling:
- From 1.5.2010: Employees getting up to Rs. 15,000/month
- Revised w.e.f. 6.9.2016: Up to Rs. 21,000/month
- Employees getting daily wages below Rs. 176 are exempted from contribution
The provisions can be extended to any agricultural or commercial establishment.
ADMINISTRATION
The ESI scheme is administered by an autonomous body - the ESI Corporation.
| Position | Person |
|---|---|
| Chairman | Union Minister for Labour |
| Vice-Chairman | Secretary, Ministry of Labour, Govt. of India |
Composition of Corporation: Representatives from:
- Central and State Governments
- Employers' organizations
- Employees' organizations
- Medical profession
- Parliament
Key Officers of Corporation:
- Director General - Chief Executive Officer
- Insurance Commissioner
- Medical Commissioner
- Financial Commissioner
- Actuary
Medical Benefit Council: Headed by the Director General of Health Services, Govt. of India, assisted by the Medical Commissioner.
Infrastructure (as of 31.3.2020):
- 1526 ESI dispensaries
- Over 1753 panel clinics
- 307 diagnostic centres
- 159 ESI hospitals
- 42 hospital annexes
- Over 22,600 beds
- 23 regional offices + 37 sub-regional offices
- 559 branch offices + 185 cash offices + 406 inspection offices
- Total beneficiaries: ~13.24 crore (1324 lakhs)
- Coverage: ~309 lakh employees (including 62.6 lakh women) and ~341 lakh family units
FINANCE
The scheme is financed by contributions from three sources:
| Contributor | Share |
|---|---|
| Employer | 3.25% of total wage bill |
| Employee | 0.75% of wages |
| State Government | 1/8 (12.5%) of total medical care cost |
| ESI Corporation | 7/8 (87.5%) of total medical care cost |
Revised rates w.e.f. 1.7.2019.
Employees getting daily wages below Rs. 176 are exempted from paying contributions.
Memory tip: Employer (3.25%) + Employee (0.75%) = 4% total contribution (revised 2019)
BENEFITS TO EMPLOYEES
The Act provides 7 benefits to insured persons or their dependants:
1. Medical Benefit
Full medical care, free of cost, including hospitalization, covering:
- Out-patient care
- Supply of drugs and dressings
- Specialist services in all branches
- Pathological and radiological investigations
- Domiciliary services
- Antenatal, natal and postnatal services
- Immunization services
- Family planning services
- Emergency services
- Ambulance services
- Health education
- In-patient treatment
Medical care delivery patterns:
- Direct Pattern:
- Areas with ≥1,000 employee family units → full-time ESI dispensaries (doctor attends ~80 OPD cases/day + 1 home visit)
- Areas with <750 employees → part-time ESI dispensaries
- Scattered residential areas → mobile dispensaries
- Indirect Pattern (Panel System): Registered medical practitioners designated as Insurance Medical Practitioners (IMPs) provide care
Extended medical care for families:
- "Restricted medical care" = only out-patient care
- "Expanded medical care" = full care short of hospitalization
Other medical facilities:
- Dentures, spectacles, hearing aids (free for employment injury)
- Artificial limbs (free for limb loss in employment injury)
- Special appliances: hernia belts, walking callipers, surgical boots, spinal braces/jackets
2. Sickness Benefit
- Cash payment to insured person when certified sick by Insurance Medical Officer/Practitioner
- Payable for a maximum of 91 days in any continuous period of 365 days
- Rate: ~70% of average daily wages
- Worker cannot be dismissed/discharged during sickness benefit period
Extended Sickness Benefit (ESB):
- For insured persons with 2 years of continuous employment
- Duration: up to 2 years (beyond the 91-day standard benefit)
- For 34 diseases categorized as:
| Category | Diseases |
|---|---|
| I. Infectious | Tuberculosis, Leprosy, Chronic empyema, AIDS |
| II. Neoplasms | Malignant diseases |
| III. Metabolic | Diabetes mellitus with complications (retinopathy/foot/nephropathy) |
| IV. Nervous System | Monoplegia, Hemiplegia, Paraplegia, Hemiparesis, ICSOL, Spinal cord compression, Parkinson's, Myasthenia gravis, Cataract (vision ≤6/60), Retinal detachment, Glaucoma |
| V. Cardiovascular | Unstable angina, MI (EF <45%), CCF, Valvular disease, Cardiomyopathy, Post-cardiac surgery with complications |
| VI. Chest | Bronchiectasis, Interstitial lung disease, COPD with cor pulmonale |
| VII. Digestive | Cirrhosis with ascites/chronic active hepatitis |
| VIII. Orthopaedic | Vertebral dislocation/PIVD, Non-union fracture, Post-traumatic amputation of lower extremity, Compound fracture with chronic osteomyelitis |
| IX. Psychosis | Schizophrenia, Endogenous depression, MDP, Dementia |
| X. Others | >20% burns with complications, Chronic renal failure, Raynaud's/Buerger's disease |
Enhanced Sickness Benefit (sterilisation):
- Tubectomy (women): 14 days at double standard rate (= full wages)
- Vasectomy (men): 7 days at double standard rate (= full wages)
3. Maternity Benefit
Cash benefit payable to insured women:
| Condition | Duration |
|---|---|
| Confinement | 26 weeks |
| Miscarriage | 6 weeks |
| Sickness arising from confinement | 30 days |
- Rate: ~full wages
- Confinement expenses: Rs. 7,500 per confinement (increased from Rs. 5,000)
4. Disablement Benefit
Cash payment + free medical treatment for temporary/permanent disablement due to employment injury or occupational disease:
| Type | Rate |
|---|---|
| Temporary disablement | ~90% of wages for the duration of disablement |
| Total permanent disablement | Life pension based on loss of earning capacity (assessed by medical board) |
| Partial permanent disablement | Proportionate life pension |
5. Dependant's Benefit
- Payable when insured person dies due to employment injury
- Rate: 90% of wages shared among dependants in a fixed ratio, paid monthly
- Eligible son/daughter: up to age 18 years
- Benefit withdrawn if daughter marries before age 18
6. Funeral Expenses
- Cash payment on death of insured person
- Amount: up to Rs. 15,000/-
7. Rehabilitation Allowance
- On monthly payment of Rs. 10, the insured person and family continue to get medical treatment after permanent disablement or retirement
BENEFITS TO EMPLOYERS
Employers covered under ESI are exempted from:
- Workmen's Compensation Act, 1923
- Maternity Benefit Act, 1961
- Payment of medical allowance to employees/dependants
- Rebate under Income Tax Act on ESI contribution
- Assured of a healthy workforce
RAJIV GANDHI SHRAMIK KALYAN YOJNA (2005)
A scheme launched by ESI Corporation for unemployment allowance:
- Launched: 1st April 2005
- Eligibility: Insured person rendered involuntarily unemployed (due to retrenchment/closure/permanent invalidity from non-employment injury) after 5 or more years of contribution
- Duration: Unemployment allowance for maximum 6 months during entire service (in one spell or spells of ≥1 month)
- Rate: Standard benefit rate corresponding to average daily wage
- Medical care: Continues during unemployment allowance period for the person and family
QUICK MEMORY TABLE - High-Yield for Exam
| Point | Value |
|---|---|
| Year of Act | 1948 |
| Key amendments | 1975, 1984, 1989, 2010, 2019 |
| Wage ceiling | Rs. 21,000/month (from 2016) |
| Exemption from contribution | Daily wage <Rs. 176 |
| Employer contribution | 3.25% (revised 2019) |
| Employee contribution | 0.75% (revised 2019) |
| State Govt share of medical care | 1/8 |
| ESI Corp share of medical care | 7/8 |
| Sickness benefit | 91 days, ~70% wages |
| Extended sickness benefit | 2 years, for 34 diseases (need 2 years employment) |
| Maternity (confinement) | 26 weeks |
| Maternity (miscarriage) | 6 weeks |
| Disablement benefit rate | 90% wages |
| Dependant's benefit | 90% wages |
| Funeral expenses | Rs. 15,000 |
| Enhanced sickness - tubectomy | 14 days at full wages |
| Enhanced sickness - vasectomy | 7 days at full wages |
| Unemployment allowance | 6 months max, after 5 years contribution |
| Total beneficiaries (2020) | 1324 lakhs (~13.24 crore) |
| Employees covered (2020) | 309 lakhs |
Park's Textbook of Preventive and Social Medicine, Chapter on Occupational Health and Social Security Legislation (pp. 919-922)
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