Contribution to Employees’ State Insurance scheme rate reduced: Employees, employers to benefit


The government, last week, approved the reduction in the rate of the contributions made by employers and employees to the Employees’ State Insurance (ESI) Scheme. This reduction will benefit all the employees and employers covered under the ESI Scheme. The employer’s contribution has been reduced from 4.75 percent to 4 percent of wages, and employee contribution from 1.75 percent to 1 percent. This was announced in a draft notification issued by the Ministry of Labour and Employment on February 22.

ESI is designed to provide protection to employees as defined in the Employees’ State Insurance Act, 1948 against sickness, disablement, death due to employment injury, maternity benefit, and to provide medical care to insured persons and their families.

Along with the reduction in the contribution amount, it was also announced that the income limit for availing medical benefit for dependent parents of an insured person covered under the scheme has been enhanced from Rs 5,000 per month from all sources to Rs 9,000 per month.

These decisions were taken to improve the medical service delivery in the states. It was also decided that Employees’ State Insurance Corporation (ESIC) will bear 1/8th share of the expenditure which was earlier borne by the states. Till now, ESIC used to bear a 7/8th share of expenses of ESI scheme. With this decision, ESIC will bear the full cost of the scheme in the prescribed ceiling of the per insured person (IP) expenditure for a period of three years beginning 2019-20.

New hospitals to get constructed

ESIC will acquire an additional land of 10.56 acres abutting already allotted land of 8.58 acre at Sheelanagar, Visakhapatnam. On this land, 500 bedded ESIC Model Hospitals with Super Specialties will be constructed.

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To bridge the gap in indoor health care facilities, in principle approval to Report of Sub-Committee on reconsideration of policy for up-gradation of ESI Dispensary into 30 bedded ESI hospital was accorded. Now, 30 bedded ESI hospitals will be established in plain areas with an IP population of 20,000 and in hilly areas with an IP population of 15,000. Earlier, ESIC was setting up hospitals only in such areas where minimum IP population was 50,000. This decision will provide indoor facilities to IPs/beneficiaries in several under-served implemented areas under the ESI Scheme.





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