What is ESIC & Why Its Necessary
ESIC stands for Employee's State Insurance Corporation. It is a social security and health insurance scheme for Indian workers. The scheme is managed by the Employees' State Insurance Corporation, which is a statutory body under the Ministry of Labour and Employment, Government of India.
Under the ESIC scheme, employers and employees make contributions towards a health insurance fund. The fund is then used to provide medical benefits, disability benefits, maternity benefits, and various other benefits to the employees covered under the scheme.
The ESIC scheme is applicable to employees working in certain specified sectors and earning below a certain threshold. The scheme is mandatory for employers in these sectors to provide health insurance coverage to their employees.
Why ESIC is Necessary
Health and medical benefits: ESIC provides health and medical benefits to employees and their dependents. This includes medical treatment, hospitalization, and cash benefits during sickness, maternity, or disablement.
Social security: ESIC provides social security to employees by ensuring financial protection against unforeseen events such as sickness, disability, or death.
Compliance with laws: It is mandatory for employers in India to register with ESIC and provide medical benefits and social security to their employees. Therefore, ESIC helps ensure compliance with labor laws and protects the rights of employees.
Cost-effective: ESIC provides health and medical benefits at a lower cost compared to private healthcare. This is especially important for low-income employees who may not be able to afford private healthcare.
Overall, ESIC is necessary to provide health and medical benefits, social security, and ensure compliance with labor laws, while also being cost-effective for both employees and employers.