As an employee, the last thing you want to worry about when ill, is being able to pay the bills. This brief guide is designed to put your mind at rest, as well as provide some food for thought about things to consider and arrange – well before you get sick.
Sickness insurance in Switzerland is separate from health insurance. Health insurance covers for the costs incurred in visiting medical professionals and any prescribed treatment or medicine. Sickness insurance on the other hand, covers the insured person’s salary as a result of lost working time through illness. This can sometimes be further confused by employer-provided accident insurance ,which covers both medical costs and salary. Swiss employees are insured against being sick. Here, we take a closer look at how insured you as an employee are.
Sickness insurance – an obligation?
In the recruitment sector it is an obligation for employers to take out sickness insurance on behalf of their employees and the cost of this is reduced by a subsidy. This subsidy is built into the contribution to the recruitment industry’s collective bargain agreement. Most employers take out insurance for their employees, but it is not obligatory for them to do so, unless of course, they are subject to a collective bargaining agreement which advises otherwise. The process:
- The employer chooses a sickness insurance policy for employees and must pay at least fifty percent of the premium.
- The premium is based on a declared gross salary and a key determinant called the “waiting period” as well as the industry and insurance provider.
- The “waiting period” is the period of time the employer and the employee must wait for the insurance to take over payment of the salary in the event of illness.
- The shortest waiting period is three days. During the waiting period, the employer pays the employee’s salary in their absence at 100%.
- After this time, the insurance then pays 80% of the salary once the waiting period has elapsed and for up to 720 days minus the waiting period.
Why 720 days?
720 days is not a random period of time, but rather when a 1st pillar (AVS/AHV) and 2nd pillar (LPP/BVG) pension (in most policies) would take over in the event that the insured person is still ill. Once the insurance has started the insured employee usually receives 80% of their salary. The employer may choose to top this up with the extra 20%, but does not have to do so. There is usually an insured salary ceiling often of CHF 300’000 per annum that employees should check with their employer.
Waiting periods?
As a general rule, the longer the waiting period, the cheaper the sickness insurance premium. In this case the salary will then be paid by the employer for a longer period of time before the insurance takes over. A shorter waiting period premium however, will cost the employer – and often the employee more. Assuming 50% of the premium is paid for by the employee.
But what if there is no insurance?
If the employer does not have sick-pay insurance for its employees, it does not mean that there is no coverage, but this coverage is controlled by the Swiss code of obligations as to how much, or how little of it the employee may have. In this case, the first thing employees need to look for is the “Scala” that the employer is using, which is usually in their employment contract. The employer follows the rules of their declared scala. There are three scalas : Berner, Zürcher and Basler
Scalas!
Each scala determines the length of time the employee must receive their salary at 100%. This depends on the length of service of the employee, with each of them starting at an obligation of 3 weeks within the first year of service, and increasing each slightly differently to around 6 months for an employee of 25 years. In each case the contract must have been entered into for a period of longer than 3 months.
An employer does not have to pay sick-pay during the trial period. It can therefore be a good idea to take out sick pay coverage privately during the trial period, or possibly to seek to extend coverage with the previous employer’s provider.
Scalas might give the employer and employee the opinion that a sick-pay insurance is not required. However, an employer obligation of up to 6-months, instead of a possible a 30-day waiting period, may make the employer reconsider taking this extra cost on board.
If an employee of 5 years service is absent from work for 6 months as a result of a tropical service but the employer has no sickness insurance but uses the Basel scala then the employer has an obligation to pay the salary at 100% for a period of 3 months. This means the employee has no income to pay bills for the final three months of recovery time rendering it prudent for both the employer and employee to have a sickness insurance which would last up to two years. This would then cover a potential absence of up to two years at which point the 1st and 2nd pillar insurances could take over.
Can an employee be given notice during an illness?
It is often thought that an employer cannot terminate the contract of an employee if the employee is ill. This is not true, but there are restrictions. And again, the years of service play a role in answering the questions surrounding each party’s rights.
- In the first year of service, the employer may not terminate the contract of a sick employee for 30-days.
- In the second to fifth year of service, this period is increased to 90-days and from the sixth year of service 180-days.
- Absenteeism as a result of pregnancy has its own set of rules.
- The employer’s obligation to pay 2nd pillar pension contributions also falls away after 90-days, and is picked up by the pension company in the event of continuing illness.
Finally, a potential termination during a period of sickness, does not mean that the employer’s sickness insurance company’s obligation cease. In fact these remain for up to 720-days, but the relationship with the terminated employee and the insurance company then becomes a direct one, rather than through the employer.
Lots of Administration!
In the event of an absence through illness which has been registered with the employer’s insurer, the employee may receive a letter from the employer’s insurer. The employer is unlikely to be aware of this, as illness is treated as a private matter.
The letter will probably ask for the employee to give permission to ignore the patient/doctor confidentiality rule. This is in order for the insurer to obtain information about the employee’s health situation and without this permission, may refuse to pay benefits. The insurance company may also request that the employee consult an independent doctor of their choice.
It may seem obvious that a doctor’s note is required for the employee to be registered as being off work ill and the employee contract usually states how long the employee has to obtain this (3-days is common). Often overlooked however, is the fact that the employee needs a doctor’s note to confirm that they are o% sick, and from which specific date, so that the insurance knows when to stop paying the employee.
Being ill and off work sick can be a surprisingly busy time administratively and certainly not really the type of thing to be dealing with whilst feeling under the weather. Overall there is a system that supports sick employees and their employer if the latter is absent from work for a given period of time. This enables the employee to be able to continue to pay bills without too much hardship.
As an employee it pays to be informed and understand what to do in the event of sickness. This can help reduce stress, during a time when you least need it.
Swissroll GmbH was founded over 20 years ago. During this time our team of experts has worked with hundreds of companies and literally thousands of contractors. Beyond our core function of payroll management, we offer advice to contractors coming to work in Switzerland for the first time. This includes advice on pensions. Swissroll: “More than just payroll specialists”
Contact us now on: enquiries@swissroll.ch
