Millennium Post

Labour Ministry takes ESIC insurance plan to PMO after FinMin veto

Labour Ministry has approached the Prime Minister's Office after Finance Ministry blocked a proposal to provide an option to ESIC subscribers to opt for health insurance products available in the market. Finance Ministry, which had itself mooted this proposal earlier, has now opined that the prevailing practice is good enough wherein ESIC (Employee's State Insurance Corporation) subscribers are given its own health insurance cover. 

"Labour Ministry has approached the PMO to resolve the issue following Finance Ministry's turn-
around on its own proposal to provide option of other health insurance products to the ESIC subscribers," a source said. "All the required clearance for this proposal was received from various ministries including the Law Ministry.

Finance Ministry had also made a case for it earlier after Finance Minister Arun Jaitley's announcement in this regard in last year's (2015-16) budget speech." Jaitley had said at that time, "With respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognised by the Insurance Regulatory Development Authority (IRDA). We intend to bring amending legislation in this regard, after stakeholder consultation."  Subsequently, it was proposed to amend the Employees' State Insurance Act 1948 to provide that if two-third employees of an establishment agree to switch over to health insurance product approved by IRDA then they should be allowed to go for it. "But the Labour Ministry could not send it for Cabinet approval as the Finance Ministry has now written adverse comments on it saying the prevailing practice is good enough," the source said, while adding that the Labour Ministry had to therefore seek PMO's intervention before approaching the Cabinet.

The trade unions have been opposing the proposals of providing an option to subscribers of retirement fund body EPFO and Employees' State Insurance Corp (ESIC) to choose National Pension System (NPS) and health insurance products available in the market. The proposal to provide a one-time option to the EPFO subscribers to choose NPS was incorporated in the EPF Amendment Bill which has already been sent for approval of the Cabinet. 
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