Employee health and welfare are every company’s top priority, whether a microbusiness or a multinational corporation with thousands of team members. As a result, almost every organisation or business provides employee health benefits to retain valuable resources and maintain employee welfare.
Healthcare insurance protects employees and their immediate dependents against unforeseen events. Typically, two prominent options for providing healthcare coverage to employees are Employee State Insurance (ESI) schemes and Group Health Insurance policies. Let’s explore them in detail.
What is the ESI Scheme?
The Employee State Insurance (ESI) scheme provides employees with social security and health insurance. The main objective of the ESI plan is to safeguard employees from certain health-related contingencies, including sickness, untimely death, or permanent or temporary disablement due to any occupational damage.
The employer and the employee contribute a predefined proportion of the employee’s salary to the ESI scheme. Later, these contributions fund the healthcare benefits provided to employees and their immediate dependents.
What are the Benefits of the ESI Scheme?
The ESI plan provides numerous benefits to employees and their dependents. Here are some of the critical features of the Employees State Insurance Corporation (ESIC) scheme:
Comprehensive Medical Protection
Insured employees and dependents can access comprehensive medical services, including consultations, diagnostic tests, medications, and hospitalisation costs. The scheme allows employees to receive essential medical treatment without paying from their own pockets.
Maternity Benefits
Female employees benefit significantly from the ESI scheme during pregnancy and childbirth. It covers paid leave, pregnancy and delivery medical expenses and postnatal care for the child and mother.
Monetary Benefits
The ESI scheme provides monetary benefits to secured employees during any illness. In addition, employees who cannot work due to illness receive a daily cash allowance equivalent to a percentage of their wages.
Disability Benefits
Employees who experience work-related injuries or disabilities are eligible for disability compensation. In addition, insured employees under the ESI scheme receive cash benefits and medical care to help them recover and safeguard their financial stability.
What are Group Health Insurance Policies?
Employers offer their staff a health insurance plan known as group or employer health insurance as an additional perk. The plan is funded by the employer, who also pays the annual renewal premium.
Employees and their immediate dependents (spouse, children and elderly parents) are covered by this insurance policy. Under a group insurance policy, employees are not required to contribute anything from their salary, and the employer takes over the full responsibility.
Benefits of Group Health Insurance:
Both businesses and employees benefit from group health insurance programs. The following are some of the benefits of group health insurance plans:
No Contribution from Employees
An employer provides his employees with a group health insurance policy. As a result, the company pays all premiums. An employee can take advantage of the benefits of a group health policy without paying any additional expenses.
Flexibility and Customisation
Group health insurance policies provide flexibility and customisation choices to match the employers’ and employees’ needs. Employers can select from various plan options and coverage levels per their employees’ demographics and needs.
No Waiting Period
There is no waiting period for hospitalisation under a group health insurance policy. This waiting period means the insured and their immediate dependents are covered immediately.
Critical Differences Between ESI Scheme and Group Insurance:
| Employee State Insurance Scheme | Group Health Insurance Policy | |
| Nature | Government-provided scheme | Initiative of an employer towards well-being of workers |
| Sum Insured | There is no limit to the sum insured | Employees are covered up to a certain amount. However, an employee can increase the sum insured by paying additional premiums out of pocket. |
| Cashless Benefits | Only a few government hospitals provide cashless benefits under the ESIC scheme. In the event of an emergency, the insured has to locate network hospitals that provide cashless services. | The insurers are linked to a large network of hospitals. As a result, insured individuals can receive cashless benefits at several hospitals during any medical emergency. |
| No. of Employees | Minimum: 10 | Minimum: 7 |
| Minimum Salary of Employees | Employees having minimum salary of ₹21,000/per month | None Specified |
| Contribution | 0.75% and 3.25% of the employee’s salary is contributed by employee & employer respectively. | Generally fully paid by the employer |
| Coverage of Dependents | Immediate family members, i.e., spouse, children and elderly parents covered by default | Dependents can be covered if employers want to include; otherwise, only employees are protected. |
Which is Better: ESI Scheme or Group Health Insurance?
The choice between the Employee State Insurance scheme and a group health insurance policy is determined by the organisation’s needs, industry restrictions, employee demographics and budget.
Before deciding, employers and employees must consider coverage requirements, customisation options, pricing considerations, employee preferences and compliance demands.
Consultation and comparison of both healthcare coverage alternatives with the best health insurance company provider such as Niva Bupa can also provide helpful guidance in selecting the best choice for your organisation and its employees.
Conclusion:
The ESI scheme and group health insurance policies differ in coverage, customisation, prices and provider network. While the ESI plan is compulsory for specified industries and provides standardized coverage, group health insurance policies provide employers with greater freedom and customisation facilities.
As a result, businesses should examine their employees’ specific needs, consider various factors, and select the choice that best matches their organisation’s requirements and the well-being of their valuable employees.
Be the first to comment