Assessment of Informal Economy Workers’ and Economic Units Behaviour Regarding Health Care Insurance (Phase 1 & 2)

Aims and Objectives: The research aims to analyze the potential for upscaling Employees’ State Insurance Scheme (ESIS) services to include more economic units and workers in the informal sector, with the goal of mitigating the health burden on households. It seeks to understand the needs and behaviors of informal workers and economic units regarding health insurance, focusing on those currently eligible for ESIS but not covered, as well as those not eligible but capable of contributing. Additionally, the study will consider gender-specific needs and differences in health vulnerabilities and outcomes.

Methodology: The study covered the geographical regions of Rajasthan, Haryana, Kerala, and West Bengal. It targeted three groups: enterprises eligible but not affiliated with ESIS and their workers; enterprises not eligible but capable of contributing, along with their workers; and workers in affiliated enterprises who are not covered under ESIS.

A stratified multi-stage sampling design was employed, with districts as the primary sampling units (PSUs), villages or census enumeration blocks (CEBs) as the second stage units (SSUs), and enterprises as the ultimate stage sampling units (USUs) for sampling enterprises in Groups 1 and 2. For workers, a three-stage design was used, with USUs being the workers themselves. Data collection involved a listing exercise in sample SSUs to identify enterprises and households, the development of training manuals for supervisors and enumerators, and the analysis of large datasets maintained by ESIS.

Findings:

Phase 1:

• Enterprise Size: 75% of enterprises were in the smaller size class (5-9 workers), 25% were in the larger size class (10+ workers).
• Sectoral Distribution: Significant differences across states:
  • Haryana: 67.7% in manufacturing
  • Kerala: 21% in manufacturing
  • Rajasthan: 51.6% in manufacturing
  • West Bengal: 46.1% in manufacturing
• Location: Over three-quarters of enterprises were in urban areas. No rural enterprises were sampled in Kolkata or Hugly.
• Worker Distribution:
  • 59.9% in enterprises with 5-9 employees
  • 40.1% in larger enterprises (10+ employees)
  • 48.5% in manufacturing, 51.5% in non-manufacturing
  • 21.4% in rural areas, 78.6% in urban areas
  • Only 6.7% in ESIS registered enterprises
• Enterprise Ownership and Registration:
  • 98.5% run as proprietary or partnership entities
  • 79% registered for GST (76% smaller enterprises, 85% larger enterprises)
  • 58% registered for income tax
  • Registration under various acts: Factories Act (23%), Shops and Establishment Act (34%), DIC programme (13%), Excise tax or VAT (11%)

Phase 2:

• Resurveyed Enterprises:
  • 27.1% located in rural areas
  • 23% had 10+ workers in Phase 1
• Resurveyed Workers:
  • 22.9% in rural enterprises in Phase 1
  • 61.1% in small enterprises (5-9 workers)
  • 38.9% in larger enterprises (10+ workers)

Recommendations:

• Upscaling ESIS Services: Develop strategies for including more enterprises and workers in ESIS, particularly those currently eligible but not covered, and those capable of contributing.
• Gender-sensitive Approaches: Address gender-specific health vulnerabilities and outcomes in health insurance schemes.
• Awareness and Training: Increase awareness among informal sector enterprises and workers about the benefits of ESIS and provide necessary training for compliance.
• Policy and Implementation: Strengthen policy measures to ensure broader coverage and effective implementation of ESIS in the informal sector.