The Employees' State Insurance (ESI) scheme provides immense benefits to the employees covered under the scheme at least cost, while the Mediclaim Policy is costly with several riders. The employees who were earlier covered under ESI scheme with pre-existing diseases lose their benefits after being brought under Mediclaim Policy. The managements should, therefore, cover the employees both under ESI scheme and exclusive Mediclaim Policy, so that when employees cease to be covered under ESI scheme, they are not haunted by their claim rejections because of pre-existing diseases. The article probes the above point with reference to the industrial life of an employee.

Employees in industries and other establishments are compulsorily covered under Employees' State Insurance scheme, popularly called as `ESI'. This scheme is applicable to employees who are drawing wages up to Rs. 7,500 a month with effect from October 01, 2006.

Under this scheme, an employee contributes 1.75% of his wages and the management contributes 4.75% of the employee's wages every month for his health insurance. This is a statutory requirement. The ESI scheme is managed by the Employees' State Insurance Corporation with representations from central government, state government and employee organizations.

The act provides free medical treatment for an employee, his wife and children. It also covers his parents even if they are not living with him. They can take treatment wherever they reside in India. The other benefit is the cash benefit, which is paid if the employee is sick for more than three days. The scheme is a social welfare legislation and takes care of the family, if the employee dies as a result of an on-the-job accident. The wife is given dependent pension, and once she dies it is given to the children who are under 21 years.

Insurance Chronicle Magazine, Employees' State Insurance, ESI, Mediclaim Policy, Insurance Companies, ESI scheme, Human Resource Management, Group Mediclaim Policy, Healthcare Policy, Public Sector Insurance Company, Factories Act, Medical Benefit Council.