Covid-19 - Supplementary pensions and other additional social benefits
Employees who are temporarily unemployed as a result of the Covid-19 pandemic will continue to be covered by their group insurance, their hospitalization insurance and their disability insurance that the employer has taken out for them. The employer can postpone the payment of the premium for these insurances until 30 after September 2020. However, the employer can also choose an opt-out. This means that he can decide not to continue all these insurances during the period of temporary unemployment due to the Covid-19 pandemic. All this is laid down in a law of 7 May 2020, which has been published in the Belgian Official Gazette of 18 May 2020.
The massive temporary unemployment resulting from the Covid-19 pandemic has implications in many areas, including supplementary pensions and other additional social benefits. Periods of temporary unemployment are normally not taken into account in this context. For example, the period of temporary unemployment is normally not taken into account for the building-up of a supplementary pension capital: the period of temporary unemployment will thus not count for the career on the basis of which the supplementary pension is calculated. When an employee dies during a period of temporary unemployment, his surviving relatives do normally not receive an early death benefit as provided for by the group insurance. An employee who falls ill during a period of temporary unemployment can normally not claim the coverage of the hospitalization insurance or the disability insurance of his employer.
In order to indemnify the employees and their family members against these far-reaching adverse consequences, the insurance companies had already taken some measures themselves. For example, they allow employers to continue the coverage of the group insurance despite the temporary unemployment. Employers may also request that the payment of group insurance premiums be postponed until after September 30, 2020.
These measures taken by the insurance sector have now been incorporated by the legislator into the Law of 7 May 2020. At the same time, the scope of these measures has been extended. For example, they now also apply to institutions for occupational retirement provision (IORP’s). Moreover, they also apply to hospitalization and disability insurances that are not part of a group insurance policy.
Specifically, the scheme includes the following elements:
- The insurance company or the IORP must adequately inform the employer of the choice he can make. Either he continues the insurance during the period of temporary unemployment due to the Covid-19 pandemic and further covers his employees and their family members. In that event, the employer must continue to pay the premiums, but payment can be postponed until after September 30, 2020. Or the employer decides not to continue the insurance coverage during the period of temporary unemployment caused by the Covid-19 pandemic and will thus not pay the insurance premiums (opt-out). In the latter case , employees and their family members will no longer be covered by these insurances during that period. However, there is one exception to this principle: death coverage must always be guaranteed during the period of temporary unemployment relating to the Covid-19 pandemic. The surviving relatives therefore continue to be entitled to the payment of a compensation in the event of the death of an employee during his period of temporary unemployment relating to the Covid-19 pandemic.
- Within thirty days of receiving this information, the employer shall inform the insurance undertaking or the IORP of the choice he has made: either continuation of coverage during the period of temporary unemployment due to the Covid-19 pandemic with possible deferral of the premium payment, or suspension of coverage during the period of temporary unemployment (opt-out). If the employer does not inform the insurance company or the IORP of this choice within the said period of thirty days, it can be assumed that he wants to continue the coverage during the period of temporary unemployment due to the Covid-19 pandemic.
- Subsequently, the employer must inform his employees about what actually will happen to their coverage during the period of temporary unemployment due to the Covid-19 pandemic. For example, he must provide them with the necessary information as to the premiums that they have to pay themselves. In case the insurance coverage is continued during the period of temporary unemployment, the employees have normally the obligation to continue to pay their personal premiums during the same period. However, the employer may also decide to defer the payment of those personal premiums beyond 30 September 2020 and to spread their payment more in time after that date.
The law of 7 May 2020 remains into force until 30 June 2020. However, it can be extended by royal decree.