Health insurance benefits for workers remain on paper due to low awareness

Nearly 45 million Indian workers are enrolled under the central government’s Employees State Insurance scheme, which provides them a measure of social security and health insurance out of their own earnings. This scheme can provide a crucial buffer to workers during the coronavirus pandemic.

Over the past two months, a nationwide lockdown to curb Covid-19 spread has taken a heavy toll on its workers, who have had to go without wages and food. In light of this, the Employee State Insurance Corporation or ESIC, which manages the scheme, on April 9 announced three temporary relief measures for registered workers and their dependents.

However, a survey of 96 workers revealed that more than 75% of workers did not know about these measures. The lack of awareness does not just mean they are missing out on the benefits, but also losing money from their own pockets. Remember these workers are “fee paying customers” of ESIC – they regularly pay insurance premium and are entitled to healthcare and compensation in cases of sickness, injury and death.

The survey was conducted by Safe in India Foundation, a not-for-profit organisation that I have co-founded, which assists workers who lose their hands or fingers in factory accidents in Gurgaon with their ESIC healthcare and compensations. Since 2017, the organisation has engaged constructively with the corporation and a number of its recommendations have been accepted.

Here are findings and recommendations that emerge from our survey.

Three relief measures

Announcement 1: The Employee State Insurance Corporation announced that it would allow “purchase of medicines by beneficiaries from private chemists during lockdown period and its subsequent reimbursement by ESIC”.

In the past, workers had to get their medicines from ESIC dispensaries unless referred to private pharmacies by the corporation.

Around 78% of workers surveyed did not know of this measure. Of the 96 interviewed, 10 required medicines for new illnesses during lockdown for themselves or their dependents. Only two of them were able to get medicines from an ESIC hospital or dispensary.

The rest purchased medicines at personal expense ranging from Rs 40 to Rs 6,000. Of these, six did not have or keep the invoices as they were not aware of the announcement and will probably lose this entitlement. That is a loss of several crores to the workers, worsening their cash situation.

To assist cash flows of these registered workers, the Safe in India Foundation has recommended a waiver of ESIC premium for at least contract workers for three to six months. This would cost the corporation Rs 500 crore to Rs 1,000 crore – assuming 50% of those registered are contract workers – compared to the Rs 9,000 crore revenue excess in the previous financial year.

The organisation has also suggested interest-free cash advances against their future entitlement, such as provisions for pensions and setting up of a “war room” to clear 50%-75% of each worker’s individual compensation where the documentation is pending with employers or within ESIC offices.

Announcement 2: In accordance with the second relief measure, the ESIC allowed registered workers to seek medical treatment from its partner hospitals directly without a referral letter. Once again, a majority of workers – 77% – were unaware of this; and none had availed the benefit despite 11% requiring medical care for new illnesses during the lockdown.

Safe in India Foundation has recommended that registered workers should be able to find their nearest available ESIC hospital, a partner hospital, or Ayushman Bharat medical facility through a simple “locator bot” on their website or the Government of India’s UMANG app.

Announcement 3: The corporation also announced “a further extension for filing the ESI contributions for February and March 2020 month till May 15, 2020, with no penalty or interest or damage to be levied on establishments during the extended period”.

In this case, 94% did not know that ESIC premium payments for these months could be delayed by their employers. It is necessary for workers to understand this scheme so they can negotiate terms of their wages wherever they can or would like to.

In case of further extensions, the non-profit has recommended, businesses should be clearly told not to deduct ESIC premiums from worker salaries until they are payable.

Inadequate communication

There are almost 4.5 crore Indian workers registered with the ESIC and it is indeed challenging to effectively communicate with all of them across the country. Moreover, this is a recurring problem across government schemes: A recent study by Yale University shows that less than 21% of poor adult Indian women know they have Jan Dhan Yojana account.

In ESIC itself, only about 40,000 women – 0.09% of registered workers – avail of cash maternity benefits every year. Workers have cited lack of awareness or difficulty associated with the process as key reasons. Perversely, such lack of awareness benefits the funding and execution agencies by saving them cost and effort. The lower the awareness, lesser the demands and cash outlay.

Of those surveyed, 87% said they had not received any pro-active communication from ESIC. Does the corporation expect workers – in the midst of lockdown-related crises of jobs, migration, cash and health – to read and understand mainstream media announcements, or the ESIC’s social media pages?

Or does it expect them to find the time and mind space – and mobile phone charge – to call the ESIC helpline?

Safe in India Foundation found that 78% did not call the helpline as they did not think of it, did not know the numbers or could not call. And among the 22% who did call, more than half – 55% – were not satisfied.

ESIC has vast resources at its disposal, and it should invest in effective proactive communication – 100% of the employees have mobile phones and their numbers are recorded in the ESIC database. The organisation’s focus groups and surveys in the past two years in Gurgaon and Ahmedabad suggest that even among the contract workers, who get paid less than permanently-employed workers, more than 50% have smart phones.

In addition to sending out a simple text message updates, it should regularly advertise its schemes on regional radio, TV channels and newspapers. ESIC must urgently augment its call centre and helpline capacity with better technology, such as power diallers. The staff should be trained and it should set management targets of first-time resolutions of workers’ problems.

This data should be published in the public domain, as it is a key driver of worker satisfaction with ESIC schemes and services, and a source of highly valuable and potentially structured feedback on ESIC services.

This is the time to invest further in new initiatives to improve ESIC services, not only to serve 4.5 crore workers and their dependents better, but also to create productive employment and investment in the country.

Sandeep Sachdeva is the co-founder and CEO at Safe in India Foundation, founded and supported by the alumni of IIM Ahmedabad and IIT Roorkee. The organisation assists injured workers in Gurgaon, mainly in the auto sector supply chain and engages with the ESIC for systemic improvements. The full report of the above survey and our recommendations can be sought from team@safeinindia.org.