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ESIC Checklist

The Employees’ State Insurance (ESI) scheme is a contribution-based, comprehensive social security and health insurance program in India. It is managed by the Employees' State Insurance Corporation (ESIC) and is applicable to employees earning up to a certain wage threshold working in factories, establishments, or businesses covered under the scheme.

All about ESIC Checklist

The funds collected under the ESI scheme are used to provide medical and cash benefits to the insured employees and their families, including medical treatment, sickness and disability benefits, maternity benefits, and dependent benefits, among others.

The ESI scheme provides a safety net for employees and their families in case of illness, injury, or disability. This scheme is particularly important for those employees with low monthly earnings and at a higher risk of falling into debt traps and deeper poverty owing to medical expenses, disability or involuntary loss of employment.

As an employer, you may want to know whether the ESI scheme is suited for your employees’ needs and if it is worth investing in. In the blog, we will help you understand the features, processes and other nitty-gritties to consider while choosing to extend the ESI scheme to your employees.

Eligibility Criteria: Who Can Access These Benefits?

As per the Employees’ State Insurance (ESI), all factories/ establishments with 10 or more employees (20 or more in specified cases) must register into the ESI scheme. The threshold for eligibility under the ESI scheme for employees is Rs. 21000 (Rs. 25000 in case of persons with disabilities).

Every employee within the premises (and precincts) of the factory/ establishment within the threshold limit must be enrolled into the scheme. The benefits are also extended to permanent and temporary employees including trainees, casual laborers and contract employees, among others.

All these are formal employees; does this mean those in the informal sector cannot access these benefits? Can households and home-based small businesses enrol their employees into the scheme? As per the provisions of the ESI Act, no and no. The scheme applies only to formal employees. Households cannot register as employers nor can home-based businesses. This is where TankhaPay comes in.

With the TankhaPay app, employers, including households, can enrol all their employees into the scheme. This means even domestic workers, drivers, casual labourers, temporary workers, gig and platform workers and other informal workers can access the comprehensive healthcare and other benefits offered by the scheme.

Healthcare Benefits

One of the key features and benefits of the ESI scheme is the comprehensive set of healthcare benefits that it offers to employees and their families. An insured person and their family gain access to a full range of preventive and curative medical care from day 1 of their insurable employment. Permanently disabled insured employees, retired employees and their spouses can access these benefits through a token annual premium of Rs.120. Even widows/ widowers getting dependent benefits after the death of the insured person can continue to access the medical benefits through the payment of Rs. 120 yearly premium.

The insured person/ employee must enrol all their family members/ dependents to the scheme along with the necessary proof, else the family member cannot enjoy the benefits. The dependents/ family members may include the following:

  • Spouse

  • Dependent children

  • Infirm children

  • Minor siblings

  • Dependent parents

  • Widow/ widower, etc.

Diseases covered

The ESI scheme provides medical benefits for a wide range of diseases and health conditions. The following is a non-exhaustive list of some of the diseases and health conditions covered under the scheme:

  • Acute illnesses requiring medical treatment and hospitalization

  • Chronic illnesses such as cancer, diabetes, hypertension, and kidney diseases

  • Infectious diseases such as malaria, dengue, TB, etc.

  • Maternity-related conditions such as pre- and post-natal care, delivery, and postpartum complications

  • Occupational diseases such as pneumoconiosis, silicosis, and asbestosis

  • Mental health conditions such as anxiety, depression, schizophrenia, etc.

  • Eye and ear diseases

  • Skin diseases such as eczema, psoriasis, and dermatitis

  • Dental treatment and procedures

  • Tubectomy and vasectomy procedures, etc.

Expenses covered

As long as the employee visits their allotted ESI dispensary/ hospital (any ESI hospital/ dispensary in case of an emergency) with their Pehchan card, they are eligible to a wide range of cash-free medical benefits with no upper limit on expenses. The scale of coverage of expenses for insured persons and their families is as follows.

  • Full range of medical and surgical treatment consisting of OP visits, in-patient treatment, hospitalization, medication and dressing.

  • Pathological and radiological investigations including testing and imaging

  • Obstetric, prenatal and post-natal care for insured women

  • Super specialty consultation & treatment

  • Ambulance services

  • Occupational therapy and rehabilitation

  • Artificial limbs and appliances etc.

The cash-free benefits reduce the burden of out of pocket expenses for employees and their families. Since there is no upper limit on expenditure, employees and their families can get timely and proper preventive and curative medical treatment. The sickness benefits ensure that employees can take paid time off to get treated properly and maintain good health.

With the ESI scheme, employees don’t have to postpone doctor visits or treatments owing to the lack of resources or the inability to take time off. Their productivity and output improves while absenteeism and attrition reduce.

Other Benefits

In addition to the wide range of medical benefits, the ESI scheme also offers other important benefits to employees and their families.

Sickness benefits: Insured persons get upto 78 consecutive days of paid medical leave with 70% of average daily wage being paid as compensation for a maximum period of 91 days. For different diseases and surgical procedures, insured persons can avail enhanced and extended benefits.

Maternity benefits: Insured women get 26 weeks of fully paid maternity leave for their first 2 children in case of biological children. Even adoptive mothers, women facing pregnancy complications, confinements, miscarriages, etc. are entitled to varying levels of maternity benefits. Confinement costs are also covered under the scheme.

Disablement benefits: In case an insured person is permanently or temporarily disabled due to work injury or occupational disease, they are provided with a range of benefits including unemployment allowance, pensions, medical care, rehabilitation, etc. under the scheme.

Unemployment allowance: Insured persons facing an involuntary loss of employment are entitled to an unemployment allowance of 50% of the average monthly wages for upto 24 months.

Dependents benefits: Financial assistance and pensions are offered to dependents in case an insured person is ill, injured at work or dies in service. Dependents of a deceased insured person get monthly pensions plus 90% of average daily wages which is shared among them in a fixed proportion.

Funeral Costs upto a maximum of Rs. 15,000 is covered under the scheme for a deceased insured person.

Vocational Rehabilitation to help those who suffered disablement due to an employment injury get back to work.

Physical Rehabilitation: Insured persons who have suffered a disability in service are offered physical rehabilitation services to help them recover, regain physical abilities and return to work. The benefits include medical care, artificial limbs, counselling, skill training and job placements.

What are the limitations?

The overall benefits offered by the ESI scheme are quite comprehensive and cover both timely healthcare and insurance aspects. However, there are some limitations too that employers need to know of.

  • Though there is no upper limit on medical expenses, there is an upper limit on insurance, allowances and other benefits.

  • Insured persons and their families can only access medical treatment from their allotted ESI dispensary/ hospital. In case of emergencies, they can access immediate care from any nearby ESI dispensary/ hospital using their Pehchan Card.

  • To prevent misuse/ overuse, there is an upper limit on the maximum number of days of paid leave, the number of confinements, number of pregnancies, etc.

Extent Of Coverage

Who All Benefit?

Registered employees: All employees earning up to wage threshold in factories, establishments, or businesses covered under the scheme are eligible for the benefits of the ESI Scheme.

Family members: The spouse, dependent children, infirm children, minor siblings, etc. of an insured employee are eligible for the ESI benefits.

Dependent parents: The dependent parents of an insured employee are also eligible for medical benefits under the scheme.

Retired insured persons: Retired insured persons who have been contributing to the ESI Scheme for a minimum specified period are also eligible for medical benefits under the scheme.

Is there an upper limit on the number of family members who can be registered?

No, the scheme does not mention an upper limit on the number of family members who can be registered. However, those members who aren’t enrolled with necessary ID proof by the insured person will not be able to avail the benefits of the ESI scheme.

The Affordability for Employees and Employers

Being offered by the Government, the ESI scheme is one of the most affordable health insurance schemes in the country. They only marginally increase the contribution for employers and require only a marginal deduction from employee wages. These nominal premium payments offer comprehensive and wide-ranging benefits to insured persons and their families.

Contribution percentage

Employees: 0.75% of the wages paid/payable

Employers: 3.25% of the wages paid/payable

Note that these rates are revised from time to time to reflect the cost-of-living index and other macroeconomic factors.

How is it calculated?

The contribution to the ESI scheme calculated as a percentage of the employee's monthly gross salary/ wages. This amount typically includes their basic salary/wage, commissions, bonus, etc. but does not include any contribution made by the employer into EPF or pension schemes, concessions, gratuity, special expenses, etc.

For example, if an employee earns a monthly gross salary of Rs. 20,000, the monthly ESI contribution would be as follows:

Employee contribution: 0.75% of Rs. 20,000 = Rs. 150.

Employer contribution: 3.25% of Rs. 20,000 = Rs. 650.

The total monthly contribution to the ESI Scheme in this case would be Rs. 800.

Payment To the Scheme

The payment to the ESI scheme is made through monthly contributions by the employer and the employee. The employer is responsible for deducting the employee's contribution from their salary and depositing it along with their own contribution to the ESI Corporation. Non-payment or irregular payments attract fines, penalties and legal action. With the TankhaPay app, the employer does not have to worry about timely payments, or any other compliance associated with ESIC.

ESI Cards

ESI or Pehchan Cards are issued by the ESI Corporation to insured employees and their family members as proof of their entitlement to benefits under the scheme. The ESI Card contains information about the insured person, such as their name, photograph, and ESI Code Number. Without these cards, insured persons and their families will not be able to access the medical benefits offered by the scheme.

ESI Dispensaries and Hospitals

Employees will be able to access preventive and curative medical treatment and care only from the ESI dispensary or hospital they are allotted (unless it is an emergency). It is the responsibility of the employer to create awareness of the same to employees to help them gain the benefits of the scheme. The lack of awareness leads to the scheme being underused by the neediest sections of the population.

Registration & Compliance

To access the many benefits of the ESI, the employer must be registered with the ESIC and must have enrolled their employees and their families. Further, the employer must follow several compliance requirements to avoid penalties and legal action. With the TankhaPay app, the employer need not go through these hassles. The app makes it easy to register employees and ensure they receive a whole host of social security benefits.


With the TankhaPay app, even households and smaller businesses can extend comprehensive healthcare and other benefits to their employees. The app makes registration, enrolment, calculating contributions and making timely payments into the ESI scheme straightforward and hassle-free.

Download the TankhaPay app now and start providing social security to all your employees.