Corporation in Employees State Insurance Act, 1948

Employees’ State Insurance Act, 1948 establishes the Employees’ State Insurance Corporation (ESIC) as a key institution for administering the insurance scheme envisioned by the Act. The ESIC plays a central role in implementing the provisions of the ESI Act and ensuring that the benefits reach the intended beneficiaries, i.e., the insured employees and their families.

Formation and Structure:

• Established under the ESI Act, 1948, the ESIC is an autonomous corporation overseen by the Ministry of Labour and Employment, Government of India. It’s a legal entity that can raise funds, acquire assets, and enter into contracts in its own name.
• The governance structure of the ESIC includes a board that comprises representatives from the government (both central and state), employers, employees, medical professionals, and parliament. This diverse representation ensures that the interests of all stakeholders are considered in the administration of the scheme.

Functions and Responsibilities:

• Collection of Contributions:

One of the primary functions of the ESIC is to collect contributions from covered employers and employees. These contributions finance the benefits under the ESI scheme.

• Dispensation of Benefits:

ESIC is responsible for ensuring that the range of benefits provided under the ESI Act, such as sickness, maternity, disability, dependents’ benefits, and medical care, are dispensed to eligible insured persons and their families.

• Medical Services:

Apart from monetary benefits, the ESIC also administers a comprehensive network of ESI hospitals, dispensaries, and diagnostic centers to provide direct medical care to beneficiaries.

• Record Management and Compliance:

The corporation maintains records of all registered entities and insured individuals, monitors compliance with the Act, and ensures proper utilization of funds.

Powers and Duties:

ESIC has the authority to make regulations, within the framework of the ESI Act, regarding the collection and disbursement of funds, provision of medical and other benefits, and conditions for the delivery of services. It is also tasked with expanding the coverage of the ESI scheme, both in terms of the number of beneficiaries and the range of benefits provided.

Financial Management

ESIC manages a fund constituted by contributions from employers and employees, contributions from the Government of India, donations, and other income. This fund is utilized to provide benefits under the scheme and to cover administrative expenses. The financial health and sustainability of the ESIC fund are critical for the ongoing provision of benefits and the expansion of services.

Modernization and Challenges

ESIC has embarked on modernization initiatives, including digitalization of records and processes, to improve service delivery and beneficiary experience. Challenges such as expanding coverage to the unorganized sector, improving the quality of medical services, and ensuring the financial sustainability of the scheme are areas of focus.