A statutory corporate body, Employee State Insurance Corporation (“ESIC”), was set up under the ESI Act 1948 and is responsible for administering the ESI scheme. It is a detailed social security scheme to safeguard the employees covered under the plan. The system is against the financial distress that arises due to sickness, death, disability, and employee injuries.
The workers under the act get exposed to certain health-related eventualities, like sickness, maternity, temporary or permanent disablement. It also deals with an occupational disease, untimely death due to employment injuries, resulting in complete or partial loss of earning.
With the help of the Employee State Insurance Scheme of India, this multidimensional social security system caters to the socio-economic protection of the worker population—worker and the dependent party that relies on the worker’s income for survival.
ESI Contribution And Its Impact
The ESI contribution rate 2019-20 is cut back and revised with a new set of rates. Now, the employers would contribute about 3.25% instead of the mentioned or existing 4.75%. Similarly, employee contribution under the Act would merely be just 0.75% and not 1.75%.
The revision in the rates has given employees a lot of relief and benefits. This rate cut means that employees will receive a good cash amount in and on to the salary. The employers will find it easier to make savings.
The changes in the rate are expected to benefit millions of employers who will witness a 40% reduction in the contribution rate for employees. It is also in line with all the mentioned provisions of the ESI act 1948.
Features Of The Act
- The Act provides the employees with complete medical care and attention, and this is anytime when an employee is dealing with disability, restoring health etc.
- There are high rates of absenteeism of employees when dealing with illness, maternity, or any other sort of accident. This accident or unforeseen medical emergency has led to wage loss. Here, the act works as financial support to compensate for the wage loss.
- Along with employees getting compensation, medical treatment is also for family members under the system.
- The scheme offers benefits of two types: financial help and non-monetary benefits. When talking about financial relief, it describes sickness, maternity, disability, burial expenses, vocational rehabilitation, along with other bonuses and rehabilitation allowance. At the same time, talking about non-monetary includes other medical-related relief.
- The plan is self-financing since the funds under the ESI act 1948 primarily include contributions, which are contributions from employees and employers that get paid monthly.
The List Of Social Security Benefits
There are various social security benefits that the insured employees and their dependents parties are entitled to. It is discussed under the revision of the ESI contribution rate 2019-20. These are as follows:
- Medical Benefits
- Sickness Benefits
- Maternity Benefits
- Disablement Benefits
- Dependent Benefits
Other Benefits: In the other benefits, the employees have the entitlement to receive funeral expenses, vocational rehabilitation, free supply of physical aid etc. These benefits keep employees in a good position and compensation when they deserve it. Not only does the act protect and balance the employee.
But, it offers relief to the dependent party of the employees in case of sickness and death. Especially when the employee was the family’s sole wage earner, the compensation percentage will be determined based on the factors.
Conclusion
This article has clarified what to expect with the ESI act. So, it holds the benefits employees receive and the features of the act. The revised contribution rate has allowed employees to get more cash in hand and make the most benefit of it.
The rates are revised from time to time, keeping the needs and interests of employees and employers in mind. This self-financing health insurance scheme is like most social security schemes worldwide. With that, employees must understand the system, the rights and the benefits they hold.