Here’s A Blessing in Disguise to All Employees

1. The circular states the following: Reference is invited to Order No. 40-3/2020-DM-I (A) dated 15th April, 2020 issued as part of the Consolidated Revised Guidelines by Ministry of Home Affairs, GOI. As per the said order, inter alia; the following are stipulated:

   1. All industrial and commercial establishments, work places, offices etc. shall put in place arrangements for implementation of Standard Operating Procedure (SOP) before starting their functioning.

   2. As per clause no. 5 of Annexure - II of the said SOP for social distancing for offices, workplace, factories and establishments, medical insurance for the workers to be made mandatory.

2.  In light of the above, all General and Health Insurance companies may offer comprehensive health insurance policies either to individuals or groups in order to enable the listed organisations / employers / establishments comply with the above referred directions.

3. The insurers are advised to devise comprehensive Health insurance products with simple wordings, conditions, and at affordable cost to be offered to the stated organisations.

Initially it was not mandatory for all employers to provide health insurance cover to their employees or workers or staff. Only some companies were insuring their employees and defined family members by buying group health insurance policies from the insurers.

"That's nice!", she responded.

I continued, " ...over the last few months, the Insurance Regulatory Authority and Development of India (IRDAI) has mandated several regulations for health insurers to ensure that everyone is getting a basic medical cover".

[Read: All About Aarogya Sanjeevani Policy- A Standard Health Product To Be Launched.]

Last month the regulator even allowed mediclaim settlment for Coronavirus treatment if the patient is hosiptalised. After COVID -19 was declared as a pandemic, it didn't provide any clarification for it. However, insurers are allowed to settle claims made under Coronavirus at their discretion.

[Read: Will Your Health Insurance Policy Cover Coronavirus Infections? Know Here...]

However, the current COVID- 19 pandemic is a blessing in disguise for all employees of all organisations, as every employee from every firm big or small must provide a basic health cover. It is not for a stipulated duration of pandemic, but it will continue even after the virus situation eases.

So, this circular ensures a protection net for the employees for in the advent of the similar pandemic occurs in future they are well prepared.

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But the Union Labour and Employment Ministry wants some clarification, as per news reports and hence has taken up the matter with the Union Finance Ministry on two things, providing medical insurance to workers and wage assistance to the Micro, Small, and Medium Enterprises (MSMEs).

Several industries with low incidence of the virus cases were slated to resume operations from April 20 with permission from competent local authorities. So the Confederation of Indian Industry wrote to the government seeking clarification regarding the coverage amount and suggested that the medical insurance to be made compulsory for those individuals only who aren't covered under the corporate group policy or the Employees' State Insurance Corporation (ESIC).

Under the ESIC provision, establishments with a workforce of at least 10 workers (except in Maharashtra and Chandigarh where the threshold is 20) have access to medical insurance. However, employees earning monthly wages of more than Rs 21,000 aren't covered. ESIC coverage is also not effectively implemented across all states uniformly.

A person insured under the ESIC Act is entitled to various benefits such as sickness benefit, maternity benefit (where applicable), disablement benefit, medical benefit, etc. A medical benefit is insurance cover for out-patient treatment and attending physician in a hospital, dispensary, clinic, or in-patient treatment in a hospital or a doctor's visit to the home of the insured.

Normally employees covered under the ESIC within an organization are not covered under the group health insurance policy offered by the employer. The employer generally offers a group health insurance policy to those who earn a salary of more than Rs 21,000.

As per the news reporting by Business Standard, a senior government mentioned that a proposal for the increase of worker wages to be covered under ESIC is on the table.

In India, over 98 per cent of all the establishments employ less than 10 workers, according to the latest Economic Census of 2013-14. Also, the ESIC covers around 31 million workers, which constitutes roughly 6 per cent, of the total workforce of 471 million.

The Pradhan Mantri Jan Arogya Yojana is another option being considered now. This fund provides a cover of up to ~Rs 500,000 per family every year by the government, but this proposal would lead to a financial outgo from the government.

To provide an insurance cover to all the employees of the organisation in the current liquidity crisis by the firms is a difficult task, an industry executive implied.

Industry bodies have requested the government to allow more companies to take the benefit of the EPF subsidy, under the Pradha Mantri Garib Kalyan Yojana announced last month. Under the scheme, only companies (with a manpower of up to 100 employees) which employ 90 per cent of workers below the monthly wage of Rs 15,000 a month will receive provident fund contribution from the government for 3 months. The industry wants the cap of 90 per cent workers earning less than Rs 15,000 a month in a factory to be removed, which leads to inclusion of many small firms.

My colleague and I ended the call on a thankful note that, this delayed decision by the government for all employers to mandatorily provide insurance cover is really a blessing in disguise as a side effect from the Coronavirus Pandemic.

To Conclude...

This move by the IRDAI is a masterstroke that will prove beneficial to working people of all sectors and levels. Remember, financial and health security are the basic tenets for an individual. Considering the health and medical inflationary costs, government has taken a step to ensure everyone gets a basic health cover. However, one should not solely rely on the employer for the medical insurance cover as it does not provide a safety net for all members of the family and would be insufficient.

You see, insurance is an integral aspect in the exercise of financial planning and must be undertaken with utmost care. So ensure that you do have an optimal medical and life insurance cover for you and your loved ones.

Warm Regards,
Aditi Murkute
Senior Writer

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