Picture this: you wake up one morning feeling unwell, and the only thing on your mind is getting medical attention. But as you navigate the maze of healthcare options available, you are left wondering — what is the best choice for my health insurance needs? Choosing the right health insurance plan can be overwhelming in a place where healthcare is a top priority. And with multiple options available, it is easy to get confused about which plan to go with. One of the most common debates in the Indian insurance sector is whether a private health insurance plan can replace a government-run scheme.
What is ESIC?
The Employees’ State Insurance Corporation (ESIC) is a statutory organisation responsible for the Employees’ State Insurance (ESI) management and administration. The scheme was introduced in India in 1948 under the Employees’ State Insurance Act to provide social security benefits to employees in the organised sector, such as medical perks that include benefits pertaining to sickness, maternity, disability as well as death.
The ESI is a self-financing social security and health insurance scheme for workers earning a monthly wage of up to Rs 21,000 and Rs 25,000 if a person has a disability. ESI is funded by employers and employees, with the employer contributing 4.75% of the employee’s salary and the employee contributing 1.75%.
The ESIC has a multifaceted role in managing and administering the ESI Scheme. Its responsibilities include collecting contributions, providing medical and cash benefits to employees and their dependents, and managing hospitals, dispensaries, and other medical facilities. Additionally, it serves as a regulatory body to ensure compliance with the ESI Act and other related laws.
Difference Between ESIC and Mediclaim
Below are the primary distinctions between ESIC and Mediclaim.
ESIC:
- It is a government-run health insurance scheme for employees in the organised sector, earning up to a certain limit.
- The ESIC sees contributions from both employers and employees.
- It provides a range of benefits; this includes medical, cash, disability, maternity and dependent benefits.
- ESIC also manages and runs its network of hospitals and dispensaries.
Mediclaim:
- It is a private health insurance policy that individuals can purchase from insurance companies.
- It is available to anyone willing to pay the premium, regardless of their employment status or income level.
- It provides coverage for hospitalisation expenses, including medical bills, room charges, surgery costs, and more, up to the sum insured.
- Mediclaim policies have broader coverage and more flexible options but come at a higher cost than ESIC.
Benefits of Switching to Mediclaim from ESIC
Switching from ESIC to Mediclaim can have several benefits, including:
- More comprehensive coverage: Mediclaim policies offer a broader range of benefits than ESIC, including coverage for pre-existing conditions, outpatient expenses, and non-allopathic treatments.
- Greater flexibility: Mediclaim policies offer more flexibility in terms of choosing the sum insured, adding riders or endorsements, and selecting hospitals and doctors.
- Higher coverage limits: Mediclaim policies have higher coverage limits than ESIC, which means that you can get higher coverage for hospitalisation expenses, including room rent, medical bills, and surgery costs.
- Tax benefits: Premiums paid towards Mediclaim policies are tax-deductible under Section 80D of the Income Tax Act, 1961, whereas ESIC contributions are not tax-deductible.
- No dependency on employment status: Unlike ESIC, which is only available to employees in the organised sector, Mediclaim policies are available to anyone willing to pay the premium, regardless of their employment status.
Mediclaim cannot replace ESIC as ESIC is a mandatory social security scheme for employees in the organised sector, whereas Mediclaim is a private health insurance policy. However, employees not covered under ESIC can opt for Mediclaim for health insurance coverage.