Page 12 - Insurance Times July 2019

Health Insurance

ESI contribution dropped to 4% for industrial workers Aditya Birla Health Insur-
The government has recently reduced further enrolment of workers under
ance introduces 'Activ
the salary contribution from 6.5% to the ESI scheme and bring more and
Care' for senior citizens
4% for industrial workers who are eli- more members of the workforce into
gible for healthcare the formal sector," Aditya Birla Health Insurance has re-
benefits under the the ministry said. cently intro-
Employees' State In- duced a
"Similarly, reduction
surance Act (ESI) Act. health in-
in the share of con-
s u r a n c e
The move was taken tribution of employ-
product -
to formalise India's ers will reduce the
'Activ Care'- for senior citizens.
informal workforce financial liability of
and expanding social security coverage. the establishments, leading to im- Aditya Birla Health Insurance says
proved viability of these establish- with this product, it is said to give
The ESI Act, 1948, applies to
ments. It is also expected that reduc- 'proactive care' to senior citizens in-
organisations with 10 or more employ-
tion in rate of ESI contribution shall stead of 'reactive care'. With Activ
ees, drawing a salary of up to Rs 21,000.
Care, the company aims to set 'pro-
The scheme, which is governed by the lead to improved compliance of law,"
active care' as a priority for senior
state-administered ESIC, provides for it said. Experts said the reduction in
citizens, instead of 'reactive care' by
medical, cash, maternity, disability, and ESI contribution might have been pos-
empowering them against the vari-
dependent benefits to the insured. It is sible because of the lower cost and
ous unforeseen uncertainties of life.
considered by the experts that better efficiency in operating the
Centre's move will improve compli- health insurance scheme. Reactive care financially equips senior
citizens during hospitalization
ance and coverage of the scheme and "The reduced rate of contribution
whereas 'proactive care' provides
will benefit 36 million employees means lower cost for both the employ-
them with the essential support sys-
working in more than 1.3 million orga- ees and the employers. The employee
tem they require in all the three
nizations.
gets a higher take home salary. A
phases of their health journey, i.e.
The employees would now have to lower rate of contribution does not
when they are healthy when they are
contribute just 0.75% of their salary affect the benefits defined in the
being treated and during recovery.
(basic plus allowances), instead of the scheme," said Gopal Kumar, actuary
Mayank Bathwal, CEO of Aditya Birla
existing 1.75%, while the employers' and economist, Radgo & Co.
Health Insurance, says, "Activ Care is
contribution will come down from
The government had opened up last
conceptualized with a commitment
4.75% to 3.25%, according to the min-
year the healthcare units running un- that goes beyond the conventional
istry of labour and employment. How-
der the ESIC to general public. The mode of 'reactive care' and acts as
ever, the benefits would remain same.
units offer subsidized medicine, as well an enabler and influencer of 'proac-
The reduced rates will be effective as out-patient and in-patient facilities tive care' for Senior Citizens. This
from July 1. "The reduced rate of con- at a nominal cost. Around 154 hospi- offering is in-line with our core phi-
tribution will bring about a substantial tals and 1,500 dispensaries are oper- losophy of focusing 'health' in
relief to workers and it will facilitate ated by the ESIC across the country. 'health insurance'."
12 The Insurance Times, July 2019