Definition
ESIC
The Employees' State Insurance Corporation runs a contributory social-security scheme providing medical and cash benefits to organised-sector workers below an income threshold.
Under the ESI Act, eligible employees and their employers contribute a percentage of wages, and in return workers earning up to the notified wage ceiling get medical care for themselves and dependents at ESIC hospitals and dispensaries, plus cash benefits for sickness, maternity, disability and dependents' benefit on death due to employment injury.
ESIC is one of India's main social-insurance pillars for the formal workforce, distinct from voluntary health insurance. It embodies pooling of risk at a national scale, funded by tripartite contributions, and provides a safety net that does not depend on individual underwriting.
Related terms
- Group Health InsuranceGroup health insurance is a single policy covering a defined group, typically employees of a company, often including their dependents.
- Pooling of RiskPooling of risk is the core insurance mechanism whereby premiums from many insured parties are pooled to pay the losses of the unfortunate few.
- Ayushman Bharat PM-JAYPradhan Mantri Jan Arogya Yojana is the government health-assurance scheme providing free secondary and tertiary hospitalisation cover to poor and vulnerable families.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.