ESI or Group Health Insurance for Employees

Deepali Sen
April 24, 2024
5 min read

Table of Contents

Employees’ health is one of the key priorities of a company, whether it is 3 people brand or a 30,000+ team strength firm. The benefits of employee insurance while widespread, but the option remains limited. At present, when we talk about insuring employees health, there are only 2 choices that a company gets – Group Health Insurance and Employee State Insurance.

A lot of people are aware of Group Health Insurance for employees, but many don’t know that ESI is also another option for providing a financial medical backup to people. However, there are stark differences between ESI or group health insurance.

We will discuss what these concepts entail and what is the best option for employee benefits. But before that, it is important to know the two concepts inside out. Only when you have an understanding of the strengths and weakness of both the insurance options, you will be able to take the best step forward.

What does ESI mean?

The ESI or Employee State Insurance is broadly a medical reimbursement program and administered and regulated by a social security and labor welfare organization known as ESIC that functions under the Ministry of Labor and Employment, Government of India. It is an autonomous and self-financing body that is strictly run based on the rules and regulations dictated by the Indian ESI Act of 1948.

ESI medical benefits are applicable for the employees salaried under Rs. 21,000 per month. Under the scheme, both employee and employer have to pay the premium for the coverage that includes maternity, sickness, death due to employment, temporary or permanent disability, diseases contracted from a workplace, or any injury causing loss of earning capacity.

Who is eligible for ESI features benefits?

Any employee (and their dependents) who has a salary less than INR 15,000 may apply only if the employer is registered with ESIC and has been given a 17-digit ESI code post-registration.
Any employee (and their dependents) who is employed in a work setup with more than 10 employees.

What is the contribution necessary to be made towards ESI benefits?

The employer contribution in ESI is that they pay 4.75% of the employee’s salary while the employee contributes 1.75% of their salary towards ESI premium.

What are the documents needed for ESIC registration?

For a business looking to register to ESIC, the following documents will be necessary –

Registration certificate under Shops and Establishment Act
Partnership deed for partnership firms
List of workers with monthly compensation details
PAN card and address proof of all the employees
Employee attendance register
List of directors, partners, and shareholders.

What is Group Health Insurance?

Group health insurance is a form of health insurance policy in which a huge number of health insurance policies are brought by companies for their employees. The benefits offered under GHI remain the same for all the individual employees and can be extended to the employees’ family members.
While the primary aim for everything that is covered under group health insurance is providing protection to the employees, it also plays a massive role in retaining employees and helping in company’s growth.

Things to know about group health insurance

Who is eligible for Group Health Insurance features benefits?

The minimum number of employees in the company should be 20 employees
The age range of the employees should be between 18 and 70 years
The entities who are not eligible for group health insurance plans are – family businesses and sole entrepreneurs.

What does Group Health Insurance entail?

Employee health insurance companies usually cover medical benefits for self, spouse, parents, and children
Some health insurance providers cover pre-existing illnesses
GHI companies also offer cashless hospitalization within network hospital.

What are the documents needed for Group Health Insurance?

Employee data
Name of the company and GSTIN number

What are the advantages of Group Health Insurance for employees?

Many large companies prefer corporate health insurance, which most likely includes group health insurance benefits for their employees as well. This is because:

Group health insurance policy is cheaper per employee than individual health insurance plans
All employees, including ones with existing diseases, get covered
Plans can be customized based on the organization’s needs and finances
Some plans offer a wider range of employee healthcare benefits like discounted medicines, teleconsultations etc.

ESI or Group Health Insurance?

When we talk about the difference between ESI or Group Health Insurance, we usually compare the benefits and feature sets. Let us look at them in some detail.

Differance between ESI and Group Health Insurance

Feature	ESI	Group Health Insurance (GHI)
Sum Assured	No overall limit on expenses covered, but there may be limits on specific procedures or medications.	Limited sum assured for overall coverage, with potential sub-limits for specific treatments. Higher plans or additional riders can increase the sum assured but at an extra cost.
Cashless Benefits	Offered, but limited network of mostly government hospitals. May require pre-approval for some procedures.	Offered with a wider network of hospitals (private and public) depending on the plan chosen by the employer. Offers greater flexibility and convenience. May require pre-approval for certain procedures based on the plan.
Death Benefits	Provides a monthly pension of up to 90% of the last drawn salary to the employee’s family in case of death while employed or permanent disability due to a work-related accident.	No direct death benefit offered. Some plans may offer accidental death benefit as an add-on rider for an additional premium.
Critical Illness	Covers treatment for certain critical illnesses (cancer, heart disease, etc.) after a minimum contribution period of 2 years.	May or may not be covered, depending on the employer’s plan and chosen premium. If offered, there might be a waiting period before coverage kicks in. Additional riders might be needed for broader critical illness coverage.
Maternity Benefits	Female employees enrolled for a minimum of 70 days are eligible for salary for 26 weeks (around 6 months) of maternity leave.	No direct maternity benefit offered. However, Indian law mandates paid maternity leave for a certain period. The company might offer additional maternity benefits as part of their employee policy.
Loss of Job	Provides a monthly allowance for up to 24 months in case of involuntary job loss.	No benefit offered for job loss.

The Right Step Forward: Employee Healthcare Benefits Over Just ESI And Group Healthcare Insurance

If you want to know the advantages of Onsurity’s Employee Healthcare and Wellness membership, there are plenty. But for starters, some membership plans come with Group Health Insurance. In addition to all the benefits of GHI, these memberships are loaded with other benefits for the employees including free and discounted doctor teleconsultations, discounts of online medicine orders and health check-ups, and even offers on mental health and dental care. It not only covers regular healthcare but an employee’s overall wellness.

The best part? All of it is accessible through a mobile app. As for the employer, the memberships are extremely affordable and are based on a monthly subscription. There is even a digital dashboard at the employer’s end where they can manage onboarding and exiting members.

The list of benefits does not just end here. If the employee/member wants greater health benefits or add their family to the plan, they can upgrade their plan through personal purchase.