what is employee state insurance
Health Insurance

Employee State Insurance: What is it Exactly?

If you have a car insurance policy, you can protect yourself from the financial losses incurred in a car accident. However, what if you suffer losses or get injured due to employment injury? What insurance policy would help you get compensation for the same? This is where an Employee State Insurance or ESI can come to your aid. But what is ESI, and how exactly can it help you? Read on to find out.

What is Employee State Insurance?

ESI or Employee State Insurance is a health insurance product managed by a government body called the Employee’s State Insurance Corporation. It is a self–financing social security scheme, implying that once you enrol for this scheme, a small percentage of your monthly salary is automatically contributed towards this insurance plan. According to the policy rules, your employer is required to contribute to this scheme as well.

What is ESIC and its benefits?

The ESI policy financially protects employees from the disablement/death due to employment, sickness, and maternity. It offers cash benefits and medical benefits as well. For example, if a person suffers permanent disablement during employment, the ESI policy can help them receive a lumpsum amount to compensate them for the loss of pay. On the other hand, if someone gets hospitalized due to the dangers of their job, the ESI policy can help them pay for the medical bills as well.

Additionally, if you require medical leave to treat a sickness caused due to your job, you can avail yourself of 70% of your daily wage for a maximum of 91 days with the help of this policy. Moreover, if you require maternity leave, you can avail of the 100% of your daily wage for a maximum of 26 weeks, i.e., about six months.

The ESI scheme also helps the policyholder’s family members pay for the funeral costs. Furthermore, if the insured workers must retire due to permanent disability incurred during employment, they and their spouse are eligible to receive Rs. 120 per annum. The ESI policy will also provide compensation for two years if you lose your job involuntarily.

What is ESIC eligibility criteria?

Employee State Insurance can be availed by businesses that have more than ten employees. Furthermore, only the employees earning less than or equal to Rs. 21,000 per month are eligible to register under the ESI scheme. Note that the eligibility criteria vary from one state to the other. For example, Gujarat and Punjab have an upper limit on the maximum number of employees who can sign up for this scheme from one company. Alternatively, states like Maharashtra and Meghalaya only allow companies to enrol for this scheme if they employ more than 20 people.

Payment of the ESI contributions

The responsibility of making the employee contributions lies on the shoulders of your employer. They are responsible for paying their contributions and yours within 15 days of every calendar month. It is important to remember that the minimum contributions of your employer to the ESI scheme are typically higher than yours. However, if you decide to commit extra money out of your monthly wage, the employer is not required to increase their contributions as well.

Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.

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