Employee state insurance corporations provide ESI insurance to employees working in any organization in India who meet the eligibility requirements outlined in the ESIC Act. ESI can be availed by only those members whose salary is below ₹ 21k per month (₹ 25k per month in case of persons with permanent disabilities.
Under this scheme, both the employee and the employee contribute to the premium payment. The ESI scheme provides coverage against death, disability, illness, diseases arising out of the workplace, or an injury resulting in the loss of earning capacity of the employee.
ESIC can be availed by Shops, hotels, restaurants, Road Motor Transport establishments, Cinema including preview theaters, Newspaper establishments, establishments engaged in Insurance Business, Non-Banking Financial Companies, Port Trust, Airport Authorities, Warehousing establishments employing 20 or more Persons.
The scheme also provides maternity benefits, dependent benefits’ and funeral expenses for the insured person. Under the scheme, the employee contributes 0.75% of the wages whereas the employer contributes 3.25% of the wages.
Group health insurance can be bought based on the needs and wants of the people who work for a company. The insured can decide on the coverage and other terms and conditions under the group health insurance policy.
There is no limit on the salary of the employees to be enrolled under the group health insurance plan. Group health insurance has a minimum requirement of 7 lives for availing the policy.
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Why Switch from ESIC to Group Health Insurance?
- ESI is available only at select hospitals such as government hospitals and a few private hospitals on a cashless basis.
If the insured avails treatment in any other hospital apart from the mentioned ones, then the claim settlement would be on a reimbursement basis. For group health insurance the number of network hospitals would be more compared to the ESI.
- If an employee’s wages are more than ₹ 25000 then the employee would not be eligible under the ESI scheme forcing those employees to avail of group health insurance. It would be better to avail group health insurance for all the employees instead of a few.
- ESI is available only if there are at least 20 employees in the organization, whereas group health insurance can be available even if there are 7 employees.
- Group health insurance offers additional benefits such as wellness benefits, daily cash benefits, no waiting period, free medical checkups, etc.
- There is a specified sum assured limit in the group health insurance policy whereas there is no limit on the sum assured in the ESI.
- Group health insurance policy can be customized with add-ons as per the needs and requirements of the insured whereas the ESI cannot be altered to the needs of the insured.
- The employer pays the premium in the group health insurance plan whereas the employee has to contribute in the case of an ESI plan.
How to Switch from ESIC to Group Health Insurance?
The process of switching from ESI to group health insurance is very simple and does not require much paperwork or effort. The ESI coverage is available as long as the insured enrolls in the ESIC scheme which is available twice a year.
If the enrollment is not done on time then the coverage cannot be availed under the scheme. So if you opt to shift from ESI to group health insurance you can simply stop paying the premium for the ESI. At the same time, you need to go through the group health insurance purchase process once a year.
It is advisable to go through an insurance broker who can guide you in taking the best group health insurance plan. The minimum requirement of group health insurance is 7 lives which are less than that of the ESI so it is easy for the insured to shift from ESI to group health insurance.
For group health insurance the insured should submit the details of all the employees in a specified format to get the premium payable.
The premium payable can be negotiated with the help of the insurance broker without compromising on the coverage. The group health insurance comes without a waiting period which is most beneficial to the insured shifting from the ESI.