Dear Kannan,
I shall quote TAXGURU dated 3.9.2010 regarding the ESI amendment 2010. Note that point number 9 deals with exemption.
ESIC Amendment Act, 2010- Key Highlights
September 3, 2010 in Corporate Law by admin
The Government of India has notified ESIC Amendment Act 2010 via the official gazette dated 25 May 2010. The Employees State Insurance Act, ESI Act for short, was enacted by the Government of India in 1948. The Government of India, through a notification in the Official Gazette dated 25 May 2010, has enacted The Employees' State Insurance (Amendment) Act, 2010 to amend the earlier ESIC Act, 1948.
These amendments will substantially improve the medical and other benefits under the Scheme. Emphasis has been given to the development and expansion of infrastructure for augmenting the benefits under the Scheme.
Benefits under the scheme have also been extended to apprentices and trainees employed under the Apprentice Act and Standing Order Act. The amendments also aim to improve the administration of the scheme and to overcome practical difficulties experienced in the past during inspection and assessment.
The ESI Act of 2010 replaces the old Act of 1948. The rationale is to expand the infrastructure for augmenting the benefits available under the scheme. The scope of existing benefits is also being extended by adding/modifying the existing provisions.
Introduction
The Government of India, through a notification in the Official Gazette dated 25 May 2010, has enacted The Employees' State Insurance (Amendment) Act, 2010 to amend the ESIC Act, 1948. Except section 18, provisions as contained in the Amendment Act will be applicable with effect from 1 June 2010. Provisions of section 18 shall be deemed to have come into force with effect from 3 July 2008.
Objectives
These amendments will substantially improve the medical and other benefits under the Scheme. Emphasis has been given to the development and expansion of infrastructure for augmenting the benefits under the Scheme. Benefits under the scheme have also been extended to apprentices and trainees employed under the Apprentice Act and Standing Order Act. The amendments also aim to improve the administration of the scheme and to overcome practical difficulties experienced in the past during inspection and assessment.
Salient features of some of the important amendments
1. Vide amendment in sub-section 5 to section 1 of the ESIC Act, 1948 (hereinafter referred to as Act), the appropriate Government is empowered to extend the provisions of ESIC Act 1948 to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise after giving one month notice of its intention of doing so by notification in the Official Gazette instead of the notice period of six months.
2. The definition of "dependents" as contained in clause 6A of section 2 of the Act has been extended to enlarge the number of beneficiaries under the act such as:
- A widow, a legitimate or adopted son below the age of 25 years, and an unmarried legitimate or adopted daughter.
- The age limit of the dependants has been enhanced from 18 to 25 [sub-clause (i) and (ii)].
- Exclusion granted to apprentices engaged under the Apprentices Act, 1961, or under the Standing Orders of the establishment for coverage under the scheme has been withdrawn vide amendment in clause 9 of the Act. Hence, apprentices engaged under the Apprentices Act, 1961, or under Standing Orders of the establishment will also be covered under the purview of the ESIC Scheme with effect from 1 June 2010.
- A dependent parent as per the definition of "family" has been substituted to include "A minor brother or sister wholly dependent upon the earnings of the insured person in case the insured person is unmarried and his or her parents are not alive". It has also been clarified that dependent parents include "Dependent parents, whose income from all sources does not exceed such income as prescribed by the Central Government".
3. The definition of Factory under Section 2(12) has been amended to expand the coverage of smaller factories. The amended Act covers all factories that employ 10 or more persons irrespective of whether the manufacturing process is being carried out with the aid of power or without the aid of power.
4. A Deputy General – ESIC is being made Chairman of the Medical Benefit Council to improve the quality of medical benefits. (Section 10 of the Act)
5. The ESIC Corporation can now appoint consultants and specialists on a contract basis for better delivery of super-specialty services. (A new proviso added to clause (a) sub-section (2) of section 17)
6. The designation of Inspector has been re-designated as "Social Security Officer to enroll them as a facilitator of the Scheme rather than to act as mere inspectors. (amendment to section 45)
7. The ESIC Corporation may nominate any officer duly authorized to carry out re-inspection or test inspection of the records and returns already inspected by the Social Security Officer. (A new sub-section 4 added to section 45 of the Act).
Medical benefits to the insured person and his spouse have been extended under circumstances where the insured person retires under Voluntary Retirement Scheme or takes premature retirement. In the earlier Act, the benefit was applicable only on attaining the age of superannuation.
1. The procedure for the determination of contribution has been streamlined to avoid undue hardship as the Inspectors shall not inspect the books of accounts of the establishment beyond the period of five years. It will resolve all difficulties pertaining to the production of records beyond the period of five years for the purpose of inspection and verification. (A new proviso added to section 45A of the Act)
2. After section 45A, a new section 45AA has been inserted. It provides that if an employer is not satisfied with the order of the ESIC Corporation, he may prefer an appeal to an appellate authority within sixty days of the date of the order, after depositing 25% of the contribution so ordered OR the contribution as per his calculations, whichever is higher. It also provides that if the employer finally succeeds in the appeal, the excess amount deposited shall be refunded together with interest thereon as may be specified in regulation.
3. An accident occurring to an insured person while commuting from his residence to the place of employment and vice-a-versa shall be deemed to have arisen out of and in the course of employment for the purpose of benefit under the Act. A new section 51 E has been added for this purpose.
4. Medical benefits to the insured person and his spouse have been extended under circumstances where the insured person retires under Voluntary Retirement Scheme or takes premature retirement. Proviso to subsection 3 of section 56 has been substituted to provide the same.
5. State Governments are allowed to set up autonomous organizations to provide certain benefits to employees in case of sickness, maternity, and employment injury under the Scheme. (sub-section 5 has been inserted into section 58 of the Act)
6. The ESIC Corporation can enter into an agreement with any local authority, private body, or individual for commissioning and running the ESI hospitals through third party participation for providing medical treatment and attendance to insured persons. (sub-section 3 has been inserted into section 59 of the Act).
7. ESIC Corporation may establish medical colleges, nursing colleges, and training institutes for its paramedical staff and other employees with a view to improve the quality of the services. A new section 59B has been included in the Act.
8. A new Chapter VA has been added to enable the provision for extending medical care to non-insured persons against payment of user-charges to facilitate providing medical care to below the poverty line (BPL) families and other unorganized sector workers covered under the Rashtriya Swasthya Bima Yojana (RSBY).
"9. Exemption of a factory or establishment or class of factories or establishments from the operation of this Act will be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. It has also been provided that the application for renewal of exemption shall be made three months before the date of expiry of the exemption period and a decision on the same will be taken by the appropriate Government within a period of two months of receipt of such application. (new proviso added to section 87 of the Act)"
10. Exemption granted to a factory or establishment from the operation of this Act shall be prospective and not retrospective as per section 91 of the Act.
Directives for Reimbursement of Expenditure
Introduction
In view of complaints received from various employers regarding delay/non-reimbursement of expenditure incurred by them for emergency treatment of their employees, ESIC Corporation has issued guidelines to all the concerned authorities via a letter dated 21 May 2010 covering terms, conditions, and procedures to be followed for the timely reimbursement of expenditure incurred by the employer on the treatment of its employees covered under ESIC Scheme for providing medical care in emergencies.
Salient features of the guidelines
- Like super specialty care, reimbursement will be made by Senior State Medical Commissioner (SSMC) / State Medical Commissioner (SMC) of the State concerned in respect of emergency treatment, and the total expenditure will be borne by ESIC.
- Employers will have to submit treatment papers and original bills to SSMC / SMC of the State.
- SSMC / SMC shall check the entitlement of the Insured Person.
- SSMC / SMC / Medical Referee shall verify the emergency nature of the case. The reimbursement shall be limited to approved rates of the empaneled hospitals/ Central Government Health Scheme (CGHS) rates.
- To avail cashless facilities, employers may take the Insured Persons in case of emergency to empaneled hospitals of ESIC