ESI Benefits Guide: Comprehensive Coverage for Indian Workers
The Employees’ State Insurance (ESI) scheme, governed by the ESI Act 1948, provides comprehensive social security to Indian workers earning up to ₹21,000 per month. Managed by ESIC (Employees’ State Insurance Corporation), it covers medical care, sickness benefits, maternity benefits, disability benefits, and dependants’ benefits. The scheme applies to factories with 10+ workers and notified establishments with 20+ employees (10+ in some states).
With over 13 crore beneficiaries and 1,500+ ESI hospitals and dispensaries across India, ESI is the largest healthcare programme for organised sector workers. Employer contribution is 3.25% and employee contribution is 0.75% of gross wages.
Benefits Under the ESI Scheme
Medical Benefits
Full medical care for insured person and family at ESI hospitals/dispensaries. Includes outpatient, inpatient, specialist consultations, diagnostics, and medicines—all free of cost. Super-speciality treatment available at tie-up hospitals.
Sickness Benefit
70% of average daily wages for up to 91 days in two consecutive benefit periods. Extended sickness benefit at 80% for up to 2 years for 34 specified long-term diseases. Requires minimum 78 days contribution in a contribution period.
Maternity Benefit
100% of average daily wages for 26 weeks (for first two children, 12 weeks for third+). Includes medical bonus of ₹3,500 if confinement does not take place in an ESI hospital. Requires 70 days contribution in preceding two contribution periods.
Disablement Benefit
Temporary disablement: 90% of wages during disability. Permanent disablement: monthly pension based on degree of disability. Available from day one—no minimum contribution required for employment injury.
Employer Compliance Requirements
- • Registration: Register within 15 days of the Act becoming applicable. Online registration at esic.gov.in.
- • Contributions: Deposit by 15th of following month. Total contribution: 4% (3.25% employer + 0.75% employee).
- • Returns: File half-yearly returns within 42 days of contribution period end (April and October).
- • Penalties: Late payment: 12% p.a. simple interest. Non-registration: imprisonment up to 2 years and fine up to ₹5,000.
- • Contribution periods: April–September and October–March. Benefit periods follow with a lag.
Key Takeaways
- ✓ ESI applies to employees earning up to ₹21,000/month gross wages
- ✓ Total contribution: 4% of gross wages (3.25% employer + 0.75% employee)
- ✓ Covers medical, sickness, maternity, disability, and funeral benefits
- ✓ Deposit contributions by 15th of following month to avoid 12% interest penalty
- ✓ Once covered, employee remains covered even if wages exceed ₹21,000 subsequently
Frequently Asked Questions
Can an employee opt out of ESI?
No, ESI is mandatory for eligible employees. The employer cannot choose to opt out or provide alternative insurance instead. However, some employees may claim exemption if covered under other government schemes.
Does ESI cover family members?
Yes, medical benefits extend to spouse, children (up to specified age), and dependent parents. Family members receive free outpatient and inpatient treatment at ESI facilities.