Several publications have appeared in The Daily Herald about the increase of the health insurance threshold from a salary of NAf. 67,816.32 to NAf. 120,000 per year. This amendment came into effect on August 1, 2022. This change means that almost everybody that is employed and earns less than NAf.120,000 per year will be compulsorily insured under the ZV Ordinance, of which the fund is managed by SZV.
According to the explanatory note, the motives for the change were financial as the expenses of the fund were more than the income of the fund. With more employees (with a higher salary) under the ZV insurance, there will be more income for the fund. Furthermore, the increase was compelled by the Council of Ministers of the Kingdom in the context of the country packages.
The total premium for the ZV is 12.5 of the gross salary of the employee. The employer must contribute 8.3% and the employee 4.2%. This means that the costs for the employer probably did increase. What also contributes to the costs for the employer is that the threshold for the Accident Insurance was also increased per August 1, 2022. At the end of this month, the newly insured under the ZV Ordinance will also receive a lower net salary.
The advantages for the employee in view of the compulsory premium they will be paying to SZV will depend on the ZV insurance package compared to their private insurance. In an article by The Daily Herald, an employee was complaining that while his private insurance had global coverage, the ZV only has local coverage. An advantage of being insured under the ZV is that dependents will also be insured under the ZV for the same premium amount.
Furthermore, if the employee or a dependent have a pre-existing condition that was excluded under the private insurance, the condition will probably be covered under the ZV. One of the biggest advantages would be that the employee is also insured for unfitness for work due to sickness for up to two years. Previously, he was only legally entitled to salary during sickness for a relatively short period of time (unless otherwise agreed).
The cons of the increase of the threshold are for the employer that may see his employee costs rise drastically with the increase of the threshold. Because the ZV system is based on solidarity, healthy people or people that lead healthy lifestyles that have a relative high salary will pay disproportionately more for health care that they may not use, whereas there is no incentive for people that live unhealthy lifestyles to take care of their health.
It also seems to me, that when introducing the increase of the threshold, the lawmaker overlooked that some other legislations are tied in to the ZV insurance. Yet the explanatory note makes no mention of such legislation. One example of such is Arbeidsregeling 2000 that arranges work and rest periods and entitlement to overtime payment. In article 3 of Arbeidsregeling 2000, it is established that this law is not applicable to employees who have an employment agreement with an income above the premium limit of the ZV ordinance.
It is, however, compulsory for the employer to apply the rules of Arbeidsregeling 2000 if the employee earns a salary lower than the premium limit of the ZV Ordinance. It is common that with higher paying jobs, employers and employees agree that overtime is included in the salary, but Arbeidsregeling 2000 determines that overwork needs to be paid in money or in free time.
Furthermore, the amendment of the law missed the opportunity to make it possible for employees to have ZV health insurance even if they work fewer than five days a week. Now an employee, who wants to work four or fewer days a week, cannot be insured under the ZV insurance and as such also does not contribute to the fund, as in accordance with the ZV ordinance employment, for fewer than five days a week is considered casual work. However, if an employee works five days for one hour a day, he can be insured under the ZV.
The social security laws, under which the ZV insurance falls, are due for a complete overhaul to address multiple issues: for example, that all people living in Sint Maarten (legally) can have access to healthcare, even if working only four days a week.