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All that you need to know about ESIC scheme becoming optional
Finance Minister Shri Arun Jaitley proposed in his budget speech that the workers should be given the freedom to choose between the state-run ESIC (Employee State Insurance Corporation) scheme and a private health insurance policy which is approved by the IRDA (Insurance Regulatory and Development Authority).

The move is a fragment of the EPF & MP Amendment Bill 2016, which can be pushed in the upcoming winter session of the Parliament.

At present, workers having monthly wages up to Rs 21,000 are mandatorily covered under ESIC's health insurance scheme. The Labour Ministry will be sending a bill to amend the Employees' State Insurance Act 1948 to the Union Cabinet so that ESIC schemes' beneficiaries are allowed to opt for other health insurance policies available in the market.

This proposition will be beneficial for the over 2 crore workers employed in the formal sector but the trade unions are against it. Currently, all healthcare benefits including cash benefits in times of sickness, maternity, disability or death to workers or their families, are taken care of by the ESIC. The workers receive health security benefits without any higher limit on any condition on treatment or the expenses. To get such services, the workers have to contribute 1.75 per cent of their wages per month. The employers further add their 4.75 per cent share in the contribution.

The employers are opposing the proposition because they are worried about who will be paying their half in case an employee opts for a private health insurance scheme. They are of the opinion that making ESI scheme optional won't help in improving the quality of services provided by ESIC's own or empaneled hospitals.

There are over 30 hospitals, 36 to be precise, that are under ESIC along with 115 other hospitals under states that are helping ESIC in delivering medical services. A question always looms on their quality. Michael Dias, secretary, Delhi's Employers' Association says that there has been no improvement in the quality of healthcare services offered by ESIC since the last 63 years, making the passing of the bill, "the need of the hour".

ESIC spokesperson says that since ESIC is an autonomous body working without any funds from the government, the latter doesn't have any right in amending the rules without the former's approval. The spokesperson also said that ESIC wishes only the best for the industrial workers who also happen to be its subscribers and those who would opt for private benefits would realise that the private health insurance products would have their shortcomings when they won't be able to receive free service on walking into an outpatient department (OPD).

The trade unions wish that the Labour Ministry ensures the availability of health insurance products that are as beneficial as the ESIC scheme. The unions had also asked that how would ESIC ensure providing coverage to all those employees whom it is currently covering and those who will be covered under other products after the bill is passed.

At the beginning, it was proposed that ESIC subscribers be given one-time option to switch. They had to submit documentary proof of coverage under ESI. Once they did that, their contributions will have stopped, increasing their in-hand salary. But the final draft doesn't mention any such limitations.

Hon'ble finance minister had also proposed the same amendments for EPFO (Employees' Provident Fund Organisation) subscribers. The union cabinet hasn't yet approved the bill saying that there are only a few products available that can be compared to the EPFO scheme as it provides PF, pension and group insurance, together.

The move to make ESI optional is third by the ministry aimed at liberalising social security schemes along with the other two. Let's just wait and watch.

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