Legal & Compliance Legal & Compliance

COVID-19 & the big question Normally, employees covered

under the ESI within an organization
are not covered under the group
With this MHA Order, medical
insurance will now be mandatory
for those employees who are not
It is also relevant to note that
the trigger for the obligation to pay
compensation depends on various
What is the liability of an employer in the event of death of an employee due to COVID-19? health insurance policy offered by covered under ESI. This means that factors, including, the state of em-
the employer. The employer gener- there is a wider net cast and now the ployment, the nature of the employ-
By Nupur Dave Prasad ally offers a group health insurance lower pay bracket employees will ee’s work, and the circumstances in

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policy to those who earn a salary of get ESI and those who earn above which the injury/death was caused.
more than Rs. 21,000/-. Other than Rs. 21,000 will get a group medical Hence, the requirement to pay com-
ockdown, quarantine, pensation to COVID-19 affected-em-
the aforesaid, there is no separate cover from the employer. The ques-
isolation—At the begin- ployees would need a case-specific
medical insurance mandated under tion that arises now is regarding the
ning of 2020, who would assessment.
the law. Hence, a group insurance liability cast on the employer for
have thought that these
cover is not a statutory obligation those who die due to COVID-19. Although the above is an over-
three words will have be-
like ESI and is typically taken for view of both, the medical coverage
come such an integral part of our Employer liability
those not covered under ESI. and compensation in the event of
lives and will be directly linked to our Although the medical and health
health? The impo rtance of quality Employer Responsibility death to an employee under the
insurance coverage is now made
healthcare has risen multi-fold after available Indian statutes, the true
In the wake of the pandemic, for the mandatory for all sections of the
the Coronavirus outbreak. How well test for a liability cast on the em-
section of the working class not cov- working class the question that
prepared are we as individuals to ployer to pay compensation to an
ered under the ESI, the Government arises is whether death due to COV-
handle healthcare issues arising due employee not covered under the
of India, Ministry of Home Affairs, ID-19 would cast any liability on the
to COVID-19? ESI scheme is a test that the Indian
vide order No. 40-3/2020-DM-I (A) employer since the group medical
judicial system is yet to experience
In India, medical and health in- dated 15.04.2020 (MHA Order) has cover mandated vide the MHA Order in India.
surance coverage including benefits made it mandatory for all employ- is limited to covering medical and
to dependants in the event of the ers to provide medical insurance to health expenses.
insured’s death is mandated by the their employees. Consequent to the
Under the Employee’s Com-
government under Employees State MHA Order, the Insurance Regulato-
ployee State Insurance Act, 1948 ance Corporation (ESIC). An em- pensation Act, 1923, employers
Insurance Act, 1948. This is offered ry and Development Authority of In-
(ESI Act) to those organised sector ployee has to avail ESI benefits from in India have an obligation to pay
to a certain section of the working dia (IRDAI) issued its guidelines vide
employees whose monthly wage is the ESIC. A person insured under compensation to employees who
class as part of social security ben- a circular.
Rs 21,000 or less. (Note: The Shops the ESIC Act is entitled to various are injured (which includes partial
efit. Whereas a certain other section
and Establishments Act of the States benefits such as sickness benefit, The regulator has advised insur- or permanent disablement) or die
of the working class is still at the risk
of Andhra Pradesh and Telanga- maternity benefit (where applica- ers to offer comprehensive health due to accidents or have contract-
of having to manage their medical
na refer to an insurance-cum-sav- ble), disablement benefit, medical insurance policies to individuals or ed occupational disease arising out Nupur Dave Prasad has more than
and health expenses out of their
groups to enable the organisations of or in the course of employment. 17 years of experience as a corporate
savings or through other insurance ings scheme under which the State benefit etc.
to comply with the government’s Hence, strictly speaking, unless it commercial and regulatory lawyer.
coverages, if opted. Let us first un- Government may, by notification,
A medical benefit is an insurance directions. The regulator has also can be demonstrated that COVID-19 She has worked as in-house counsel
derstand the coverage provided un- extend a group medical insurance
cover for out-patient treatment advised the insurers to devise the was contracted during the course of with large corporations. Her areas of
der the Employees State Insurance. scheme.)
and attending physician in a hospi- comprehensive health insurance employment and it arose out of em- practice include Contract and Com-
Coverage under ESI Under the ESI Act, the employer tal, dispensary, clinic, or in-patient products with simple wordings and ployment, there would be no legal mercial (Negotiation and Drafting)
As per labour law, medical insur- and employee contribute a monthly treatment in a hospital or a doctor’s conditions and at an affordable cost obligation to pay compensation to Labour Laws (legal and compliance),
ance is mandatory under the Em- sum to the Employee State Insur- visit to the home of the insured. to organisations. impacted employees. Legal Metrology and Regulatory.

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