Workers face increased WAO premiums
9 September 2004, AMSTERDAM — Salaried employees in the Netherlands will have to pay half of a more-expensive monthly premium for the new privatised WAO workers disability scheme, it was reported Thursday. Currently, employers pay the entire premium.
9 September 2004
AMSTERDAM — Salaried employees in the Netherlands will have to pay half of a more-expensive monthly premium for the new privatised WAO workers disability scheme, it was reported Thursday. Currently, employers pay the entire premium.
The WAO system is designed to support people who are temporarily or permanently unable to hold down employment due to a work-related illness or injury.
The insurance scheme is a significant drain on the Dutch economy as up to one million people of the country's 7.1 million-strong workforce were claiming the WAO at the turn of the millennium.
The coalition government of Prime Minister Jan Peter Balkenende has continued the policy of the previous government in trying to overhaul the WAO system and cut the numbers of claimants by getting people to re-enter the labour market.
A major plank of the government's policy is make the WAO more cost-effective and streamlined by bringing in private insurance companies alongside the social security authority UWV.
Companies and employers will have a choice between opting for the UWV or a private company to provide WAO cover.
To ensure the private insurers can compete with the UWV to provide WAO cover, the UWV will have to increase its premiums, newspaper De Volkskrant reported.
The insurance sector and the ministries of Social Affairs and Finance have reached a draft agreement and the full Cabinet is expected to discuss the plan on Friday.
Employers pay the full WAO premium under the current system. If the new WAO system comes into operation in 2006, employees will have to pay half of the new, higher premium. It is unclear if the government intends to compensate employees in some way.
Private insurance companies taking part in the WAO system will have to put aside a cash reservoir with large enough resources to pay the disability insurance for five years. The UWV won't have to do this and will be allowed to pay WAO benefit from the income derived from premiums.
Therefore the premiums of private insurers — who are being brought in to make the WAO more cost-effective — threaten to be far more expensive than the UWV.
The difference between private and UWV insurance is calculated to be as high as EUR 10 billion up to 2011. Insurance companies have demanded the UWV level the playing field by increasing its premiums to compensate for the difference.
Private insurers work closely with health and safety authorities, or arbodiensten, and back-to-work reintegration firms. This gives them one big advantage over the UWV as they can offer a full coverage package. The UWV is restricted to making WAO and social security payments.
[Copyright Expatica News 2004]
Subject: Dutch news