Employees are compulsorily insured for the WIA (Work and Income according to Labour Capacity Act). The WIA premium is entirely borne by the employer and consists of a fixed basic premium and a differentiated premium, depending on the risk. The current premiums can be found at here.
WGA and IVA
The WIA consists of two schemes:
- the WGA (Partially Disabled Workers Act), for employees who are between 35% and 80% incapacitated for work or who are not permanently fully disabled;
- the IVA (Income provision for the fully disabled).
Own-risk carrier
An own-risk carrier is an employer who assumes all risks under the WGA himself (own-risk bearing for the IVA is not possible). This means that the employer:
- bears all costs of WGA benefits during the first 10 years of the employee's or former employee's incapacity for work;
- is responsible for the reintegration of the employee or former employee for 12 years.
Of course, the self-insurer does not pay a WGA premium to the UWV. An own-risk carrier can transfer the WGA risk to a private insurer.
An employer can become self-insurer twice a year: on 1 January and on 1 July. The application must have been made no later than 13 weeks before the intended commencement, i.e. no later than 31 March or 1 October. A guarantee declaration must be submitted with the application.
Change from 1 January 2017
From 1 January 2017, an own-risk carrier will bear the total WGA costs. Currently, it is still possible to bear only the WGA risk of permanent employment contracts. The risk of flexible employment is then borne by the UWV, for which the employer also owes a premium to the UWV. Employers who are already self-insured must submit a new guarantee declaration to the UWV before 1 January 2017.
The changes in the rules are a good reason to (re)consider becoming self-insurer or, on the contrary, bringing these risks back to the UWV. This is more than just setting off the premiums payable at the UWV against the private insurer's offer. Your adviser at VWGNijhof will be happy to list the pros and cons for you.