Esic Amendment Act 2010

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ESIC AMENDMENT ACT, 2010- KEY HIGHLIGHTS

The Government of India has notified ESIC Amendment) Act 2010 vide official gazette dated 25 May

2010. The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in

1948. The Government of India through notification in Official Gazette dated 25 May 2010 has enacted

The Employees State Insurance (Amendment) Act, 2010 to amend the earlier ESIC Act, 1948.

These amendments will substantially improvise the medical and other benefits under the Scheme.

Emphasis has been given for development and expansion of infrastructure for augmenting the

benefits under the Scheme.

Benefits under the scheme have also been extended to apprentices and trainees employed under

Apprentice Act and Standing Order Act. Amendments also aim to improvise the administration of the

scheme and to overcome practical difficulties experienced in past during inspection and assessment.

The ESI Act of 2010 replaces the old Act of 1948. The rationale is to expand the infrastructure for

augmenting the benefits available under the scheme. The scope of existing benefits is also being

extended by adding/ modifying the existing provisions.

Introduction

The Government of India through notification in Official Gazette dated 25 May 2010 has enacted The

Employees State Insurance (Amendment) Act, 2010 to amend the ESIC Act, 1948. Except section 18,

provisions as contained in Amendment Act will be applicable with effect from 1 June, 2010. Provisions of

section 18 shall be deemed to have come into force with effect from 3 July, 2008.

Objective These amendments will substantially improvise the medical and other benefits under the Scheme.

Emphasis has been given for development and expansion of infrastructure for augmenting the benefits

under the Scheme. Benefits under the scheme have also been extended to apprentices and trainees

employed under Apprentice Act and Standing Order Act. Amendments also aim to improvise the

administration of the scheme and to overcome practical difficulties experienced in past during

inspection and assessment.

Salient features of some of the important amendments

1. Vide amendment in sub-section 5 to section 1 of the ESIC Act, 1948 (hereinafter referred as Act), the

appropriate Government is empowered to extend the provisions of ESIC Act 1948 to any other

establishment or class of establishments, industrial, commercial, agricultural or otherwise after

giving one month notice of its intention of doing so by notification in Official Gazette instead of notice

period of six months.

2. Definition of dependents as contained in clause 6A of section 2 of the Act, has been extended to

enlarge the number of beneficiaries under the act such as;

A widow, a legitimate or adopted son below the age of 25 years and an unmarried legitimate or

adopted daughter.

The age limit of the dependants has been enhanced from 18 to 25 [sub-clause (i) and (ii)]



Exclusion granted to apprentice engaged under the Apprentices Act, 1961 or under the Standing

Orders of the establishment for coverage under scheme has been withdrawn vide amendment in clause

9 of the Act. Hence, apprentices engaged under the Apprentices Act, 1961 or under Standing Orders of

the establishment will also be covered under the purview of the ESIC Scheme with effect from 1 June,

2010.

A dependent parent as per definition of family has been substituted so as to include A minor

brother or sister wholly dependent upon the earnings of the insured person in case the insured person is

unmarried and his or her parents are not alive. It has been also clarified that de pendent parents to

include Dependent parents, whose income from all sources does not exceed such income as pre

scribed by the Central Government.

3. The definition of Factory under Section 2(12) has been amended to expand coverage of smaller

factories. The amended Act covers all factories which employ 10 or more persons irrespective of the fact

whether the manufacturing process is being carried out with the aid of the power or without the aid of

the power.

4. I Deputy General ESIC is being made Chairman of the Medical Benefit Council to improve quality of

medical benefits. (Section 10 of the Act)

5. I The ESIC Corporation can now appoint consultants and specialists on contract basis for better

delivery of super-specialty services. (new proviso added to clause (a) sub? section (2) of section17)

6. The designation of Inspector has been re-designated as Social Security Officer to enroll them as

facilitator of the Scheme rather than to act as mere inspectors. (amendment to

section 45)

7. The ESIC Corporation may nominate any officer duly authorized to carry out re-inspection or test

inspection of the records and returns already inspected by Social Security Officer. (A new sub-section 4

added to section 45 of the Act).

Medical benefits to the insured person and his spouse have been extended under circumstances

where insured person retires under Voluntary Retirement Scheme or takes premature retirement. In

earlier Act the benefit was applicable only on attaining the age of superannuation.

1. The procedure for determination of contribution has been streamlined to avoid undue hardship as

the Inspec tors shall not inspect the books of accounts of the establishment beyond the period of five

years. It will resolve all difficulties pertaining to production of records beyond the period of five years for

the purpose of inspection and verification. (new pro viso added to section 45A of the Act)

2. After section 45A, a new section 45AA has been inserted. It provides that, if an employer is not

satisfied with the order of the ESIC Corpora tion, he may prefer an appeal to an appellate authority

within sixty days of the date of order, after depositing 25% of the contribution so ordered OR the

contribution as per his own calculation whichever is higher. It also provides that, if the employer finally

succeeds in the appeal, the excess amount deposited shall be refunded together with interest thereon

as may be specified in regu lation.

3. Accident occurring to an insured person while commuting from his residence to the place of

employment and vice-a-versa shall be deemed to have arisen out of and in the course of employment

for the purpose of benefit under the Act. A new section 51 E has been added for this purpose.

4. Medical benefits to the insured per son and his spouse have been extended under circumstances

where insured person retires under Voluntary Retirement Scheme or takes premature retirement.

Proviso to sub section 3 of section 56 has been substituted to provide the same.



5. State Governments are allowed to set up autonomous organizations to provide certain benefits to

employees in case of sickness, maternity and employment injury under the Scheme. (sub-section 5 has

been inserted to section 58 of the Act)

6. The ESIC Corporation can enter into agreement with any local authority, private body or individual for

commissioning and running the ESI hospitals through third party participation for providing medical

treatment and attendance to insured persons. (sub-section 3 has been inserted to section 59 of the Act).

7. ESIC Corporation may establish medical colleges, nursing colleges and training institutes for its para

medical staff and other employees with a view to improve the quality of the services. A new section 59B

has been included in Act.

8. A new Chapter VA has been added to enable provision for extending medical care to non insured

persons against payment of user-charges to facilitate providing medical care to the below poverty line

(BPL) families and other un-organized sector workers covered under the Rashtriya Swasthya Bima

Yojana (RSBY).

9. Exemption of a factory or establishment or class of factories or establishments from the operation of

this Act will be granted only if the employees in such factories or establishments are

otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.

It has also been provided that application for renewal of exemption shall be made three months before

the date of expiry of the exemption period and a decision on the same will be taken by the appropriateGovernment within a period of two months of receipt of such application. (new proviso added to section

87 of the Act)

10. Exemption granted to factory or establishment from the operation of this Act shall be prospectively

and not retrospectively as per section 91 of the Act.

Directives for Reimbursement of Expenditure

Introduction

In view of complaints received from various employers regarding delay/ non-reimbursement of

expenditure incurred by them for emergency treatment of their employees, ESIC Corporation has issued

guidelines to all the concerned authorities vide letter dated 21 May 2010 covering terms, conditions and

procedures to be followed for timely reimbursement of expenditure incurred by employer on treatmentof its employees covered under ESIC Scheme for providing medical care in emergencies.

Salient features of the guidelines

Like super specialty care, re-imbursement will be made by Senior State Medical Commissioner

(SSMC) / State Medical Commissioner (SMC) of the State concerned in respect of emergency treatment

and the total expenditure will be borne by ESIC

Employers will have to submit treatment papers and original bills to SSMC / SMC of the State.

SSMC / SMC shall check the entitlement of the Insured Person.

SSMC / SMC / Medical Referee shall verify the emergency nature of the case. The reimbursement

shall be limited to approved rates of the empanelled hospitals/ Central Government Health Scheme

(CGHS) rates.

To avail cash less facilities, employers, may take the Insured Persons in case of emergency to

empanelled hospitals of ESIC, if available nearby

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Esic Amendment Act 2010