SOCIAL INSURANCE

Social insurance is a program that is implemented and carried out by the government with the aim of providing economic assistance to people who are unemployed, disabled, injured or part of a group of senior citizens or the elderly. Social insurance aims to provide economic assistance by providing these people with financial assistance that is mainly obtained from the monetary contributions of employed individuals, employers and those who are paying taxes. Financial assistance may also be taken from the revenue of the government.

Social insurance is any government-sponsored program with the following four characteristics: the benefits, eligibility requirements and other aspects of the program are defined by statute; explicit provision is made to account for the income and expenses (often through a trust fund); it is funded by taxes or premiums paid by (or on behalf of) participants (although additional sources of funding may be provided as well); and the program serves a defined population, and participation is either compulsory or the program is heavily enough subsidized that most eligible individuals choose to participate.

Social insurance has also been defined as a program where risks are transferred to and pooled by an organization, often governmental, that is legally required to provide certain benefits. In the U.S., programs that meet these definitions include Social Security, Medicare, the PBGC program, the railroad retirement program and state-sponsored unemployment insurance programs.The Canada Pension Plan (CPP) is also a social insurance program.

HISTORY OF SOCIAL INSURANCE

The first compulsory social insurance programs on a national scale were established in Germany under Chancellor Otto von Bismarck: health insurance in 1883, workmens compensation in 1884, and old-age and invalidity pensions in 1889. Germanys example was soon followed by Austria and Hungary. The issue of social insurance elsewhere in Europe was dominated by a debate between those who preferred voluntary, subsidized insurance and those who advocated a compulsory system. Great Britain adopted national compulsory health insurance in 1911 and greatly expanded it in 1948. After 1920, social insurance on a compulsory basis was rapidly adopted throughout Europe and in the Western Hemisphere. The United States lagged behind Europe; until 1935, with the passage of the Social Security Act, government insurance programs were exclusively the responsibility of state or local governments. The three federal insurance programs adopted in the United States since 1935 provide retirement and survivor benefits, health care for persons over 65, and insurance against disability.

Social insurance programs differ from private insurance in several ways. Contributions are normally compulsory and may be made by the insureds employer and the state, as well as by the insured himself. Also, benefits are not as strictly tied to contributions as in private insurance. For example, to make the programs serve certain social purposes, some groups are included among beneficiaries even though they have not contributed for the required periods of time. Benefits may be raised in response to increases in the cost of living, again weakening the link between contributions and benefits.

Social insurance, however, differs significantly from other forms of public aid. Social insurance systems tend to be self-financing, with contributions placed in specific funds for that purpose. Because the payment of benefits is based generally on contributions made and not on need, the necessity for a means test is removed. Benefits become a

right, and any stigma attached to receiving public funds is reduced. In certain countries, social insurance programs resemble private insurance in that the required contribution levels reflect varying degrees of risk. For example, contributions to unemployment insurance programs for employers with low discharge and layoff rates may be less than for those with higher rates.

Final Words on the History of Social Insurance

Social insurance of America has gone through a long history before it has become what it is today. In the modern era, social insurance provides financial assistance to all citizens of America deserving enough of financial help. Social insurance also provides economic assistance to the elderly, the unemployed, injured, retired professionals, widows, spouses, children under the age of 18 and people who have disabilities

TYPES OF SOCIAL INSURANCE Social Security

The most common form of social insurance, Social Security, helps retired or disabled people and their families maintain a healthy standard of living. According to the National Academy of Social Insurance, one out of every four households receives monthly income from Social Security. The programs through which disabled and retired beneficiaries earn their income, receive funding through tax deductions paid by today's workers and their employers. Unlike other social insurance programs, Social Security is an entitled payment program and not based on the particular living needs of the beneficiary. The payments received by a person reflect his payment history into the Social Security program and must satisfy the beneficiary's lesser ability to maintain a certain standard of living while helping him cope with potential health and financial risks.

Medicare
Medicare covers many of the medical expenses of elderly and disabled workers and veterans. Medicare has several different programs levels, which affect the types of benefits received by the beneficiaries. Certain plan levels cover different procedures and will provide assistance with bills incurred through hospital stays, prescription coverage, and doctor appointments. Like Social Security, Medicare receives funding through taxes deducted from current workers.

Worker's Compensation
Worker's Compensation is a social insurance program designed to protect employees who experience on-the-job injuries. The statemandated programs cover a percentage of the medical costs incurred because of the injury as well as recovering a portion of the employee's lost wages due to time off from the injury. Compensation insurance also provides a disability program that helps disabled workers maintain a sustainable income for their families. In addition to protecting employees, the insurance purchased by employers through the compensation programs provides protection from lawsuits initiated by the injured employee.

Unemployment Insurance
Unemployment Insurance offers temporary financial protection for workers who experience unexpected layoffs due to lack of work and other reasons that are no fault of the employee. Unemployment programs also protect workers who experience unemployment due to natural disasters like floods and hurricanes. Funding for unemployment insurance is through the employer's unemployment tax. Companies can keep their tax rates lower by preventing claims and disallowing unwarranted claims. States determine employee eligibility by reviewing work and earnings history. Applicants must meet certain requirements, which can vary by state, and they must continue to satisfy eligibility requirements throughout their claim. Because unemployment programs

have a limit of 26 weeks (although some circumstances allow for extensions), workers may have to register with a state employment service to obtain sustainable employment.

SOME SOCIAL INSURANCE SCHEMES

A.Universal familiesi. ii. The UNIVERSAL HEALTH INSURANCE policy will be available to both Individuals as well as in Group. Each Insured should cover all eligible members (insured persons) under one group policy only. In other words different categories of eligible members shall not be allowed to be covered under different group policies. It is not permissible to issue any unnamed group policy. The Individual Policy will be issued in the name of the earning head of family with details of insured family members. The Group policy will be issued in the name of the Group/Association/Institution (called insured) with a schedule of names of the members including his/her eligible family members (called Insured persons) forming part of the policy. Health Insurance Scheme for BPL

iii.

B.Universal Health Insurance Scheme for APL families-

1. The Group UNIVERSAL HEALTH INSURANCE POLICY will be available to groups consisting of more than 100 families. Each Insured should cover all eligible members (insured persons) under one group policy only. In other words different categories of eligible members shall not be allowed to be covered under different group policies. It is not permissible to issue any unnamed group policy. 2. The Group Policy will be issued in the name of the Group/Association/Institution (called insured) with a schedule of names of the members including his/her eligible family members (called Insured persons) forming part of the policy.

3. The Policy covers reimbursement of Hospitalisation expenses for illness/diseases contracted or injury sustained by the Insured Person. In the event of any claim becoming admissible under policy, the company through TPA will pay to the Hospital/ Nursing Home or Insured Person the amount of such expenses subject to limits as would fall under different heads mentioned below, as are reasonably and necessarily incurred in respect thereof anywhere in India by or on behalf of such Insured Person but not exceeding Sum Insured (all claims in aggregate) for that person as stated in the Schedule in any one period of insurance. C.Jan Arogya Bima PolicyThis policy is designed to provide cheap medical insurance to poorer sections of society Premium upto Rs.10000/- qualifies for tax benefit under Sec 80D of the Income Tax Act. Service tax is not applicable to the policy. D.Raj Rajeshwari Mahila Kalyan YojanaThis is a personal accident insurance scheme which provides economic security to women irrespective of their income, occupation or vocation. Premium is Rs.15/- per woman per annum for the basic cover and Rs23/- per woman per annum for both basic and additional cover.

E.Bhagyashree Child Welfare PolicyThe scheme is intended to provide insurance cover to ONE girl child in a family who loses either the father or the mother due to accidental death. The insurance cover is available on 24 hour risk basis. Incase of death of parents, the company deposits a sum of Rs25000/- in the name of the girl child mentioned in the schedule of the policy with a financial institution named in the schedule. The premium is Rs15/- per girl child per year. Group discount is also provided.

F.Janata Personal Accident InsuranceThe insurance pays specified benefits if the insurance sustains bodily injury resulting solely and directly from accident caused by outward violent and visible means. The minimum sum insured is Rs 25000/- and maximum Rs 1,00,000/- per person per annum. The rate of premium is Rs 15/- per sum assured of Rs 25000/- which can be increased in multiples of Rs 25,000/-

G.Student Safety InsuranceThis insurance is available to schools, colleges or other educational institutions. The policy is issued in the name of the Institution. The claim amount is payable to the parent/guardian as recorded in the school register. All students are to be covered. Additional students are covered during the policy period at extra premium. But no deletions are allowed.