Amendments to Employees State Insurance Corporation (ESIC), 2016

Amendments to Employees State Insurance Corporation (ESIC), 2016 | Wealthtech Speaks



Amendments to Employees State Insurance Corporation (ESIC), 2016

Employees State Insurance Corporation (ESI)
has witnessed quite a few amendments in the last few months which are aimed at
improving the healthcare benefits extended to the employees covered under the
Act. The latest amendments to ESI are aimed at bringing more individuals under
the scheme which would also include their dependents under the fold. The social
security schemes are aimed at improving the standard of living and provide
better healthcare facility to the Individuals. Amendment also tries to expand
the coverage in terms of reach so that more and more Individuals across the
nation are included under the scheme.
The coverage has been extended to Employees
earning upto Rs 21,000/- per month from existing Rs 15,000/- per month. These
will bring another 50 lakh employees under the ESI coverage ensuring better
healthcare facility to the individuals and their dependents. The Committee had
recommended the wage ceiling to be raised to Rs 25,000/- per month but the
government decided to weigh in the resistance raised by the corporates.
The move is bound to impact the employers and
the employees alike as the contribution rates will reduce the take home salary
of the employees. The amendment has been implemented from 1st
Rates Lowered
The contribution rates has been lowered for
the employers as well as the employees in areas which have been included for
the first time under the ESI Act under Rule 51B. The contribution has been
capped at 4% which includes Employers share of 3% while the Employees
contribution will be 1%, these reduced rates will be applicable for the initial
24 months. Following which the existing rates of 4.75% for employer and 1.75%
for employees will be applicable.
Initiatives By Labour Ministry
New initiative has been announced from 20th
Dec,’16 till 31st March,2017 for employers to register themselves
under the ESI Act who till now had been left out of coverage to ensure that
medical benefits are extended to more Individuals.
Workers in the formal sectors will soon have
the option to chose Health Insurance from the Open market offered by the
Private Insurers in lieu of mandatory scheme run by ESIC.

ESI is also planning to upgrade the existing
facilities in order to provide better healthcare services to the subscribers. New
healthcare facilities are also expected to come up which would help the
subscribers residing in remote locations. 

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