ESIC vs. Mediclaim: All you Need to Know

Employers and employees both are concerned about the employee safety at the workplace. ESIC comes as a statutory duty for a category of employees but still the employers remain confused between Mediclaim and ESIC with respect to cost and benefits. 

ESIC – Employees State Insurance Corporation is a body setup by labour ministry of the government of India. This organization allows medical, accidental, health insurance benefits to the employees registered with the organization.

Any employer who has 10 or more employees enrolled with the establishment has to register under ESIC. ESIC insurance cover is extended to the employees drawing gross monthly salary of Rs. 21,000 or less.

Applicability of ESIC

In order to provide social security to the employees, employers shall extend benefit of this scheme to the employees as the scheme is helpful especially if an employee meets with an accident while working in the organization.

Like any other insurance scheme, Employees State Insurance also has a premium. ESIC contribution is deducted from employee’s salary @ 1.75% of the gross salary and employer also has to contribute a sum equal to 4.75% of the gross salary of the employee. Therefore, highest premium burden for any employee amounts upto 368 per month which is way too lower than mediclaim.

ESIC payment is done online using ESIC portal every month. Every employee has to be registered with the ESIC portal by the employer as soon as he/she joins the organization. Needless to say Aadhaar is mandatory.

ESIC vs. Mediclaim

• Sum Assured Cap: No Sum Assured limit for expenses incurred on treatment in the case of accident of employee. For non accidental cases, family of the employee is also covered in this insurance policy after two years of continuous contribution. Mediclaim policies always have a definite sum assured after which you are not allowed to claim benefits though there are certain policies which have top-up facility but it enhances the premium.
• Death Benefits: ESIC also provides pension upto 90% of the last drawn salary in case of death or permanent disability of any employee in accident while he is on duty. Whereas, mediclaim does not entitle insured person for a pension in case of accident. In case of insured employee’s death his/her family is entitled to a cash compensation of Rs. 10,000 to meet funeral expenses. This facility is not available in Mediclaim policy.
• Critical illness: Critical Illness is not covered in major insurance mediclaim policies as well. But in ESIC, any insured person is eligible for treatment of critical illness after a contribution period of 2 years.
• Paid Sick Leave: In case of illness or injury, if any employee has to take rest and stay on leave then leave without pay will be paid by the ESIC department @ 70% of the salary up to 91 days in two consecutive benefit periods. Employee can also take benefit of treatment for minor illness such as fever, cold etc.
• Maternity Benefit: If any female employee is enrolled in ESIC for minimum 70 days each in two consecutive contributory period i.e. (Apr- Sep & Oct- Mar) in an year then she is eligible for salary of 26 weeks (approximate full wages) in case of confinement and 6 week in case of miscarriage, during maternity leave and 12 weeks for commissioning mother and adopting mother along with cash medical benefit. This feature is also not available in regular mediclaim policy.
• Loss of Job: Monthly cash allowance is provided for a duration of maximum 24 months in case an employee incurs involuntary loss of employment or permanent invalidity due to non employment injury. This feature is also not available in any regular mediclaim insurance policy.
• Cashless Benefits: Treatment in ESIC hospitals is cashless. The only problem with this fantastic scheme is the level of facility available across India. Although in case of emergency any employee can go to a private hospital which has tie up with ESIC and get treatment cashless. On the contrary, mediclaim insurers have a wide coverage of hospitals for cashless benefits.

ESIC: Boon for Labourers

In New India, social security shall be given utmost importance. A worker/employee of your organization is part of your family. Imagine if he lands up in any medical emergency, his lifelong savings go in vain also, he/she might have to borrow money from market to pay the medical bills.

ESIC is a boon for employees with low salary and who have a lot of dependent members in the family or those working in hazardous factories or if they have to travel during their duty.