The move will help 1.2 crore people who will now be eligible for health care benefits.
The Centre's move to increase the wage ceiling for employee coverage
under the Employees' Provident Funds and Miscellaneous Provisions Act,
1952, to Rs 25,000 per month from the existing Rs 15,000 per month limit
is expected to benefit a larger working population and include
approximately 30 lakh more workers to the Employees State Insurance
(ESI) pool.
The move would also benefit 1.2 crore more people who will now be
eligible for health care benefits at more than 1,500 clinics and
hospitals run by the ESIC directly or indirectly. Earlier as of March
31, 2016, there were around 2.1 crore persons who were insured under the
ESI Act and a total of over 6 crore beneficiaries. Employees and
employers contribute to the Employees’ State Insurance Corporation at
the specified rates, which are currently, 1.75 per cent of the wages
(employee’s contribution) and 4.75 per cent of the wages (employer’s
contribution) paid/payable in respect of the employees in every wage
period.
However, the increased wage ceiling is expected to pose a challenge to
employers in terms of the wage costs to be borne by them, said Nishith
Desai Associates, legal and tax councillors.
Employers, it noted, would now be required to make provisions of cash
benefit and health insurance for an extended employee population who
draw wages up to Rs 21,000 per month. It also sees this as a challenge
for the government to ensure that the quality of medical facilities
(including hospital infrastructure) provided under the ESI Act are
improved such that the desired benefit is achieved. It is a positive
move with the objective of expanding the ambit of social security
schemes to a larger working population.
