He said that if there was no contribution to the provident fund, workers will be entitled to only three years' of interest on their employer's contribution.
The notification is however silent on whether the employer's contribution that will be locked in till the person attains 58 years of age, will earn interest or not.
According to the federal tax code, the employer's contribution to a health insurance premium for an employee's spouse is excluded from that employee's taxable income.
While the concept in essence ensures a certain level of financial security to the employee, the portion of the employer's contribution to the pension fund does raise many questions.
After including the tax credits, the policies could cost businesses from $507 to $1,014 per employee each month, depending on the employer's contribution level and employee salaries.