The Government of India has notified ESIC Amendment) Act 2010 vide official gazette dated 25 May 2010. The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948. The Government of India through notification in Official Gazette dated 25 May 2010 has enacted The Employees’ State Insurance (Amendment) Act, 2010 to amend the earlier ESIC Act, 1948.

These amendments will substantially improvise the medical and other benefits under the Scheme. Emphasis has been given for development and expansion of infrastructure for augmenting the benefits under the Scheme.

Benefits under the scheme have also been extended to apprentices and trainees employed under Apprentice Act and Standing Order Act. Amendments also aim to improvise the administration of the scheme and to overcome practical difficulties experienced in past during inspection and assessment.

 The ESI Act of 2010 replaces the old Act of 1948. The rationale is to expand the infrastructure for augmenting the benefits available under the scheme. The scope of existing benefits is also being extended by adding/ modifying the existing provisions.

Introduction

The Government of India through notification in Official Gazette dated 25 May 2010 has enacted The Employees’ State Insurance (Amendment) Act, 2010 to amend the ESIC Act, 1948. Except section 18, provisions as contained in Amendment Act will be applicable with effect from 1 June, 2010. Provisions of section 18 shall be deemed to have come into force with effect from 3 July, 2008.

Objectives

These amendments will substantially improvise the medical and other benefits under the Scheme. Emphasis has been given for development and expansion of infrastructure for augment­ing the benefits under the Scheme. Benefits under the scheme have also been extended to apprentices and train­ees employed under Apprentice Act and Standing Order Act. Amendments also aim to improvise the administration of the scheme and to overcome practi­cal difficulties experienced in past dur­ing inspection and assessment.

Salient features of some of the imnortant amendments

1. Vide amendment in sub-section 5 to section 1 of the ESIC Act, 1948 (hereinafter referred as Act), the ap­propriate Government is empowered to extend the provisions of ESIC Act 1948 to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise after giving one month notice of its intention of doing so by notification in Official Gazette instead of notice period of six months.

2. Definition    of “dependents” as contained in clause 6A of section 2 of the Act, has been extended to enlarge the number of beneficiaries under the act such as;

—   A widow, a legitimate or adopted son below the age of 25 years and an unmarried legitimate or adopted daughter.

—   The age limit of the dependants has been enhanced from 18 to 25 [sub-clause (i) and (ii)]

—   Exclusion granted to apprentice engaged under the Apprentices Act, 1961 or under the Standing Orders of the establishment for coverage under scheme has been withdrawn vide amendment  in clause 9 of the Act. Hence, apprentices engaged under the Apprentices Act, 1961 or under Standing Orders of the establish­ment will also be covered under the purview of the ESIC Scheme with effect from 1 June, 2010.

—   A dependent parent as   per definition of   “family” has been substituted so as to include “A minor brother or sister wholly dependent upon the earnings of the insured person in case the insured person is unmarried and his or her parents are not alive”. It has been also clarified that de­pendent parents to   include “Dependent parents,   whose income from all sources does not exceed such income as pre­scribed by the Central Govern­ment”.

3. The definition of Factory under Section 2(12) has been amended to expand coverage of smaller factories. The amended Act covers all factories which employ 10 or more persons irrespective of the fact whether the manufacturing process is being carried out with the aid of the power or without the aid of the power.

4. I Deputy General – ESIC is being made Chairman of the Medical Benefit Council to improve quality of medical benefits. (Section 10 of the Act)

5. I The ESIC Corporation can now appoint consultants and specialists on contract basis for better delivery of super-specialty         services.  (new proviso added to clause (a)     sub? section (2) of section 17)

6. The designation of Inspector has been re-designated as “Social Security Officer to enroll them as facilitator of the Scheme rather than to act as mere inspectors. (amendment to section 45)

7. The ESIC Corporation may nominate any officer duly authorized to carry out re-inspection or test inspection of the records and returns already inspected by Social Security Officer. (A new sub-section 4 added to section 45 of the Act).

Medical benefits to the insured person and his spouse have been extended under circumstances where insured person retires under Voluntary Retirement Scheme or takes premature retirement. In earlier Act the benefit was applicable only on attaining the age of superannuation.

1. The procedure for determination of contribution has been streamlined to avoid undue hardship as the Inspec­tors shall not inspect the books of accounts of the establishment beyond the period of five years. It will resolve all difficulties pertaining to production of records beyond the period of five years for the purpose of inspection and verification. (new pro­viso added to section 45A of the Act)

2. After section 45A, a new section 45AA has been inserted. It provides that, if an employer is not satisfied with the order of the ESIC Corpora­tion, he may prefer an appeal to an appellate authority within sixty days of the date of order, after depositing 25% of the contribution so ordered OR the contribution as per his own calculation whichever is higher. It also provides that, if the employer finally succeeds in the appeal, the excess amount deposited shall be refunded together with interest thereon as may be specified in regu­lation.

3. Accident occurring to an insured person while commuting from his residence to the place of employment and vice-a-versa shall be deemed to have arisen out of and in the course of employment for the purpose of benefit under the Act. A new section 51 E has been added for this purpose.

4. Medical benefits to the insured per­son and his spouse have been extended under circumstances where insured person retires under Volun­tary Retirement Scheme or takes premature retirement. Proviso to sub­section 3 of section 56 has been substituted to provide the same.

5. State Governments are allowed to set up autonomous organizations to provide certain benefits to employees in case of sickness, maternity and employment injury under the Scheme. (sub-section 5 has been inserted to section 58 of the Act)

6. The ESIC Corporation can enter into agreement with any local authority, private body or individual for commissioning and running the ESI hospitals through third party participa­tion for providing medical treatment and attendance to insured persons. (sub-section 3 has been inserted to section 59 of the Act).

7. ESIC Corporation may establish medical colleges, nursing colleges and training institutes for its para­medical staff and other employees with a view to improve the quality of the services. A new section 59B has been included in Act.

8. A new Chapter VA has been added to enable provision for extending medical care to non insured persons against payment of user-charges to facilitate providing medical care to the below poverty line (BPL) families and other un-organized sector workers covered under the Rashtriya Swasthya Bima Yojana (RSBY).

9. Exemption of a factory or establishment or class of factories or establishments from the operation of this Act will be granted only if the employees in such factories     or  establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. It has also been provided that application for renewal of exemption shall be made three months before the date of expiry of the exemption period and a decision on the same will be taken by the ap­propriate Government within a period of two months of receipt of such application. (new proviso added to section 87 of the Act)

10. Exemption granted to factory or establishment from the operation of this Act shall be prospectively and not retrospectively as per section 91 of the Act.

Directives for Reimbursement of Expenditure

Introduction

In view of complaints received from various employers regarding delay/ non-reimbursement of expenditure incurred by them for emergency treatment of their employees, ESIC Corporation has issued guidelines to all the concerned authorities vide letter dated 21 May 2010 covering terms, conditions and procedures to be followed for timely reimbursement of expenditure incurred by employer on treatment of its employees covered under ESIC Scheme for providing medical care in emergencies.

Salient features of the guidelines

—   Like super specialty care, re-imbursement will be made by Senior State Medical Commissioner (SSMC) / State Medical Commissioner (SMC) of the State concerned in respect of emergency treatment and the total expenditure will be borne by ESIC

—   Employers will have to submit treatment papers and original bills to SSMC / SMC of the State.

—   SSMC / SMC shall check the entitlement of the Insured Person.

—   SSMC / SMC / Medical Referee shall verify the emergency nature of the case. The reimbursement shall be limited to approved rates of the empanelled hospitals/ Central Government Health Scheme (CGHS) rates.

—   To avail cash less facilities, employers, may take the Insured Persons in case of emergency to empanelled hospitals of ESIC, if available nearby.

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0 responses to “ESIC Amendment Act, 2010- Key Highlights”

  1. Sangeeta Goswami says:

    Is I can cover my mother in-law for ESI medical benefit?.

  2. Pravin Joshi says:

    Dear Sir,

    I am having Circular Copy from Sub Regional Office ESIC-Aurangabad Maharashtra . In this it is clearly mentioned that only Apprentices appointed under the standing orders of the establishment have now become coverable WEF 01.06.2010.

    Please clarify for Coverage of Apprentices engaged under Apprentices Act 1961.

  3. p.chakravarthy says:

    Please confirm age limit of my parents to claim in hospitals.

  4. SSP says:

    Why not these ESIC high rank official get medical treatment from ESIC hospitals, perhaps they will understand the truma faced by a common man.

  5. Shridhar says:

    i agree with Banne Singh, every one knows that recently Mr Mallikarjuna Kharge Labour minister announced Rs 15000 gross salary for becoming eligible. what he could have concentrated is to
    1. Give importance to current medical facility.
    2. Is the ESIC able to give the service to vast number of patients who are contributing from their heard enrned salary.
    3. One hand employees are loong their salary for nothing
    4. I think this one more way for making money to the politician

  6. Banne Singh says:

    Yesterday, I was at ESICH-Basai Darapur, New Delhi-110015, which is mismanaged and dirty hospital can be seen in the Delhi. Please go and see so that you can ask the ESIC- management for treatment of patients in the dirty hospital. Laboratory – dirty, all the OPD sections are smelling and hazardous to the patients.

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