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ESI (Central) Amendment Rules, 2017 Expands Maternity Health Benefits

By India Briefing
Posted: 6th March 2017 08:12
The government recently published the Employees’ State Insurance (Central) Amendment Rules, 2017. The amendment rules improve the existing maternity welfare benefits for women who have insurance, expanding the ESI (Central) Amendment Rules, 2016.
Previously, the ESI (Central) Amendment Rules, 2016 – notified on December 22, 2016 – expanded the coverage of the ESI Act with effect from January 1, 2017. The ESI (Central) Amendment Rules, 2016 allowed employees earning Rs 21,000 (US$313.53) or less in a month to subscribe to this scheme. Prior to that, the wage limit for ESI subscribers was at Rs 15,000 (US$223.95) per month.
The 2017 amendment rules expand the scheme further, detailing new maternity benefits for women who have insurance. The changes introduced in the ESI (Central) Amendment Rule, 2017 are important as welfare provisions under the Maternity Benefits Act, 1961 are not applicable to those factories and establishments that are registered under the Employees’ State Insurance Act, 1948.
The amendment expands the definition of an ‘insured woman’ to include:
  • A commissioning mother who as biological mother wishes to have a child and prefers to get embryo implanted in any other woman;
  • A woman who legally adopts a child of up to three months of age.
  • Other changes to the scheme are:
  • Extension of maternity benefits for insured women for up to a period of twenty-six weeks (instead of twelve weeks), of which not more than eight weeks (instead of six weeks) shall precede the expected date of confinement.
  • An insured woman having two or more surviving children will be entitled to receive maternity benefits for a period of twelve weeks, of which not more than six weeks shall precede the expected date of confinement.
The ESI Act

The Employees’ State Insurance (ESI) Act, 1948 stipulates the rules and regulations that govern the functioning of the Employees’ State Insurance Corporation (ESIC), which in turn manages the ESI fund. ESIC is, therefore, an autonomous statutory body, and comes under the Ministry of Labour and Employment.
Following its promulgation in 1948, the ESI Act seeks to provide social security coverage for workers in contingencies such as “sickness, maternity leave, temporary or permanent physical disablement, and death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependents.”
How does the ESI Act function?
Under the ESI framework, the total contribution for a subscriber is 6.5 percent, which is split between the employer at 4.75 percent and the employee at 1.75 percent. The state government’s share in the ESI contribution is 1/8th and that by the central government is 7/8th.
General benefits under the ESI

The ESI fund oversees the disbursal of medical and cash benefits to the registered employees and their family. In the case of employment-related disablement or death, the ESI Act provides for a disablement benefit and a family pension, respectively.
Outpatient medical facilities are available in 1,418 ESI dispensaries and through 1,678 private medical practitioners across the country. Inpatient medical care is available in 145 ESI hospitals and 42 hospital annexes (19,387 beds). In addition, several state government hospitals are required to reserve beds exclusively for the use of ESI beneficiaries. There are 830 ESI centers where ESI subscribers can avail of their cash benefits.
Eight years ago, the ESIC introduced the Pehchan or identity smart cards under Project Panchdeep to ensure transparent administration.
Why are the latest ESI Rules important?

The government is paving the way for implementing better working conditions and providing welfare entitlements for all female workers who are expecting. Unfortunately, women who work in the unorganized sector such as casual workers, daily wage earners, or self-employed workers still do not enjoy any social benefits such as paid maternal leave as they are not regulated under state and central labor laws.
However, the upcoming Goods and Services Tax (GST) and government efforts to promote a digitalized economy will inevitably expand the economy’s formal sector, which not only widens the government’s tax net but also has vital implications for labor security.

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