Section 40: Provision of medical treatment by State Government or by Corporation

Finin2min analysis — what the section actually does

Full statutory text — Section 40

40. Provision of medical treatment by State Government or by Corporation.— (1) The State
Government shall provide for Insured Persons and (where such benefit is extended to their families) their
families in the State, reasonable medical, surgical and obstetric treatment:
    Provided that the State Government may, with the approval of the Corporation, arrange for medical
treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may
be agreed upon.
    (2) Where the incidence of sickness benefit payment to Insured Persons in any State is found to exceed
the all-India average, the amount of such excess shall be shared between the Corporation and the State
Government in such proportion as may be fixed by agreement between them:
   Provided that the Corporation may in any case waive the recovery of the whole or any part of the share
which is to be borne by the State Government.
     (3) The Corporation may enter into an agreement with a State Government in regard to the nature and
scale of the medical treatment that should be provided to Insured Persons and (where such medical benefit
is extended to the families) their families (including provision of buildings, equipment, medicines, and
staff) and for the sharing of the cost thereof and of any excess in the incidence of sickness benefit to Insured
Persons between the Corporation and the State Government.
    (4) In default of agreement between the Corporation and any State Government as aforesaid, the nature
and extent of the medical treatment to be provided by the State Government and the proportion in which
the cost thereof and of the excess in the incidence of sickness benefit shall be shared between the
Corporation and that Government, shall be determined by an arbitrator who shall be appointed by the
Central Government in consultation with the State Government.
    (5) The State Government may, in addition to the Corporation under this Code, with the previous
approval of the Central Government, establish such organisation (by whatever name called) to provide for
certain benefits to employees in case of sickness, maternity and employment injury:
    Provided that any reference to the State Government in this Code relating to this Chapter shall also
include reference to the organisation as and when such organisation is established by the State Government.
    (6) The organisation referred to in sub-section (5) shall have such structure, discharge functions,
exercise powers and undertake such activities as may be prescribed by the Central Government.
   (7) The Corporation may establish and maintain in a State such hospitals, dispensaries and other
medical and surgical services as it may think fit for the benefit of Insured Persons and (where such medical
benefit is extended to their families), their families.
    (8) The Corporation may enter into agreement with any local authority, private body or individual in
regard to the provision of medical treatment and attendance for Insured Persons and (where such medical
benefit is extended to their families) their families, in any area and sharing the cost thereof.
    (9) The Corporation may also enter into agreement with any local authority, local body or private body
for commissioning and running Employees' State Insurance hospitals through third party participation for
providing medical treatment and attendance to Insured Persons and (where such medical benefit has been
extended to their families), to their families.
    (10) Notwithstanding anything contained in any other provision of this Chapter, the Corporation may,
in consultation with the State Government, undertake the responsibility for providing medical benefit to
Insured Persons and (where such medical benefit is extended to their families), to the families of such
Insured Persons in the State subject to the condition that the State Government shall share the cost of such
medical benefit in such proportion as may be agreed upon between the State Government and the
Corporation.

    (11) In the event of the Corporation exercising its power under sub-section (10), the provisions relating
to medical benefit under this Chapter shall apply, so far as may be, as if a reference therein to the State
Government were a reference to the Corporation.
   (12) Notwithstanding anything contained in this Code, in respect of establishments located in the States
where medical benefit is provided by the Corporation, the Central Government shall be the appropriate
Government.

How to apply this provision

1. Primary statutory test — (1) The State Government shall provide for Insured Persons and (where such benefit is extended to their families) their families in the State, reasonable medical, surgical and obstetric treatment:
2. Additional operative limb — Provided that the State Government may, with the approval of the Corporation, arrange for medical treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may be agreed upon.
3. Qualification / exception to test — Provided that the State Government may, with the approval of the Corporation, arrange for medical treatment at clinics of medical practitioners on such scale and subject to such terms and conditions as may be agreed upon.
4. Central Rule mapping — 25, 26. Read the mapped provision together with this text rather than treating the concordance as a substitute for it.
5. Evidence file — retain facts and records proving the role/status of: Employee / worker, Central Government, State Government, Authority / officer, Corporation / EPFO / Board.

Rules, forms and cross-references

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

Q&A — Section 40

Source & verification trail