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Mahesh   14 June 2016

Group insurance instead of esi?

Hi All,

I own a small company of 7 employees including myself. I am about add 4 to 5 more employees.

I read somewhere that company having more then 10 employees come under ESI compliance.

My query is, can I go for group insurance instead of ESI? I am planning to buy a cover of 3.5Lakh for each employee. If I go for group insurance, will my company be exempted from ESI?

The only reason I don't want ESI is that none of my employee wants to to a ESI / govt. hospital for the treatment.

Thanks in advance


 4 Replies

GANDHI MOHAN BHARATI (Pensioner)     15 June 2016

I had been an MD of a Govt Corporation employing ex-Servicemen. Besides their entitlement for treatment in Military Hospitals & their Ex-Servicemen Contributory Health Scheme, the Corporation took out a grouup medical policy covering all for Rs.3,00,000/-. We had to prove that it is better than ESI to the Regional PF Commissioner and get exemption each year.

Mahesh   15 June 2016

Thank you Sir for your reply.

So it means exemption is possible but it is solely depend upon the concerned officer. I feel its a risk. I would like to know if it is legal to replace ESI with a group insurance policy.



P. Venu (Advocate)     15 June 2016

Is your location covered by ESI Scheme?

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     10 September 2016

Exemption Under Section 90 can be granted to a factory / establishment belonging to any local authority such as a Municipality / Corporation, etc. if employees in any such factory/establishment are otherwise in receipt of benefits substantially similar or superior to the benefit. provided under the Act.

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