What is ESI?
ESI is defined as a type of health insurance plan designed by the Government of India to offer Indian workers Medical and Cash benefits. Through medical assistance, disability benefits, maternity benefits, and other services, ESI offers social security to its employees. All businesses with ten or more employees must comply with the ESI Act, 1948, including those with contract and temporary workers. The monthly ESI fund contribution from the employer is also required.
Key takeaways from ESI:
- ESI was established in the year 1952. It is designed and regulated by Employees State Insurance Corporation.
- It is an autonomous body that comes under the Ministry of Labour and Employment.
- ESI provides several benefits for Indian workers such as physical disability benefits, sickness benefits, unemployment allowance, etc.
The current contribution rate is 4% of the employee’s salary, consisting of 1.75% from the employer and 2.25% from the employee.
Table of Content
Full Form of ESI
ESI stands for Employees’ State Insurance. ESI is defined as a type of health insurance scheme, maintained and regulated by the government, in order to provide medical and financial assistance to employees and their family members.
Objectives of ESI Act 1948
1. Insurance Facilities: ESI Act, 1948 was established to provide insurance facilities to the Indian workers from those fortuitousness such as injuries, death, sickness and so on.
2. Medical Facilities: Under this act, corporation can establish Hospitals independently or with the State governments or any Private bodies to provide medical facilities to the Indian workers. The act provide medical facilities for those Indian workers who work in the factories or in any companies.
3. Retirement Benefit: When an insured person reaches the age of superannuation, which is usually 60 years old, and has been making contributions to the ESI Scheme for a predetermined amount of time, they are eligible to receive superannuation or retirement benefits.
4. Stability: To offer insured workers and their dependents a safety net so they can continue to live a socially and economically stable life in the event of illness, disability, or hardship.
Entities Covered Under ESI
1. All non-seasonal factories with 10 or more employees must comply with the ESI Act.
2. The State Governments have expanded the coverage to include Stores, Hotels, Restaurants, Cinemas, including preview theaters, Road-Motor Transport Businesses, Newspaper Establishments, Private Medical Institutions, Educational Institutions, and Contract and Casual Employees of Municipal Corporation/Municipal Bodies employing 10 or more persons in Certain States/UTs, where State Government is the Appropriate Government.
3. The Central Government has expanded the coverage to include Stores, Hotels, Restaurants, Road Motor Transport Establishments, Cinemas, including preview theatres, Newspaper Establishments, Insurance Business Establishments, Non-Banking Financial Companies, Port Trust, Airport Authorities, and Warehousing Establishments Employing 20 or more persons, where the Central Government is the Appropriate Government.
Document Required for Registration
No hard copies of any documents need to be submitted because the registration process is done online. When registering online, you must provide the following documents:
- Copies of bank statements.
- Copy of every license that has been granted in the establishment’s name.
- A check which is cancelled.
- A copy of company’s financial statement.
- A duplicate certificate proving the company’s registration or incorporation.
- A list of all employees that the business or the contractor directly employs.
- A duplicate of the rental agreement or lease.
- A duplicate of each partner’s voter ID and PAN.
- The board’s decision in writing.
- A duplicate of power bill.
Process and Procedure for Registration
The steps for ESIC Registration are as follows:
Step 1: Check The Eligibility
- The company or the firm must have at least 10 employees
- The company or the firm must be engaged in a covered industry such as medical, educational, manufacturing or service sectors.
- The maximum monthly wage of the employees should not be more than ₹21,000 .
- If the company or the firm meets the above criteria, one may be eligible for ESI registration.
Step 2: Confirmation Mail
Once the employee have completed the registration process, the employee should receive a confirmation email or letter from the ESI authorities acknowledging his /her registration. The confirmation letter or email will typically contain important information about your ESI registration.
Step 3: Collect Documents
- Registration Certificate of the Company or Firm
- PAN Card of the Company or Firm
- PAN Card of all the Directors or Partner,
- Address Proof of the Company or Firm (such as Electricity Bill, Property Tax Receipt, etc.)
- Address Proof of all the Directors or Partners (such as Aadhaar Card, Voter ID, Passport, etc.)
- Bank Account Details of the Company or firm
Step 4: Visit ESI Website
- Click on “Register” button on the top right corner of the homepage.
- This will take you to the ESI registration page, where employer will need to select the type of registration he/she want to apply for, such as employer registration or employee registration.
- Employee will need to fill in his/her personal and business details as required, selecting the appropriate registration type.
- Once the employee have filled in all the necessary information, he/she can submit application for ESI registration.
- ESI will review your application, and if it is accepted, employee will receive a registration number that he or she can use for all ESI-related transactions.
Step 5: Fill Registration Form
- Go to the ESIC website
- Click “Register Now” button
- Select Employee’s state and then click the “Submit” button
- Fill in the required details , such as company name, address, phone number, email ID, PAN number, etc.
- Upload the necessary documents
- Verify the details and click the “Submit” button
- After the successful registration, employee will receive a unique registration number that will be used for all future correspondence with ESIC
Step 6: Submit the Application
- Visit ESIC official website
- Click the “Forms” tab on the menu
- Select “Registration Forms” from the drop-down list
- Download the “Employer’s Registration Form” (Form 01)
- Fill in the required details in the form, including the name and address of the establishment
- Attach the necessary documents, include a copy of the PAN card, a copy of the registration certificate, and a copy of the bank statement
- Submit the application form and the documents to the nearest ESIC office. You can also apply online through the ESIC portal
- Now the employee will receive an acknowledgement receipt with a registration number
- The ESIC office will then verify the details provided in the application and documents
- If the application is approved, the employee will receive a certificate of registration within 15 days
Step 7: Receive Registration Certificate
- Visit ESIC website
- Click “Online Registration”
- Select “Employer Registration” and fill in the required details
- Upload the necessary documents
- Apply and make the payment of the required fees
- After the application and documents are verified, the Registration Certificate for ESI registration will be issued
- Please note that the specific requirements and procedures may vary depending on the employee’s location and other factors
Step 8: Pay the ESI Contributions
- Visit the Employees’ State Insurance Corporation (ESIC) official website
- Click ‘Online Services’
- Select ‘e-payment’ from the drop-down menu.
- Enter your 17-digit ESI code
- Click on ‘Submit.
- Verify his/her details and select the month for which he or she want to pay contributions
- Choose the payment mode (online /offline) and complete the payment process
- If the employee is facing any issues while making the payment, he or she can contact the ESIC helpline or visit the nearest ESIC branch office for assistance
Benefits of ESI
1. Unemployment Allowance: Loss of job does not mean loss of income, so ESIC offers a monthly cash allowance for a maximum of 2 years. In the event of an involuntary loss of employment or a permanent disability brought on by a non-employment injury.
2. Dependants Benefit: ESIC offers monthly payments in the event of a death brought on by an employment injury.
3. Disablement Benefit: ESIC offers a continuous monthly payment until the injury is healed for temporary disablement and a lifetime payment for permanent disablement.
4. Maternity Benefit: ESIC offers 100% of the average daily wage in cash up to 26 weeks of confinement, 6 weeks in the event of a miscarriage, during maternity leave, and 12 weeks for commissioning mothers and adoptive mothers.
5. Sickness Benefit: During medical leave, ESIC pays up to 91 days’ worth of benefits in two successive benefit periods, or 70% of the average daily wage.
6. Medical Benefit: From the first day of beginning an insurable employment, ESIC offers adequate medical care for oneself and one’s family.
7. Health Care Prevention: To lower the rate of illness and injury among covered individuals and their families, ESI advocates for healthcare prevention strategies such as health examinations and health awareness campaigns.
8. Family Planning and Counseling: To support reproductive health and the welfare of families, ESI offers family planning and counseling services.
History of ESI
1. In the year 1943, Government of India appointed B.P. Adarker to create a health insurance report for the Indian industrial worker. On the basis of that report ESI Act, 1948 was introduced.
2. According to ESI Act, 1948, insurance scheme would protect the workers from all those unfortunate circumstances such as maternity, sickness, death due to injury, unemployment allowance etc.
3. The scheme was first came into force at Delhi and Kanpur on 24th of February, 1952. The scheme provide benefits to the workers which comes under Workman’s Compensation Act, 1923 and Maternity Benefit Act, 1961.
4. Electronic health cards were introduced during this time for insured people and their dependents. These cards hold records of medical care and prescriptions, insurance information, and personal health information. The cards made it easier to receive healthcare services and made it easier to get reimbursed for treatment costs.