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Sick Leave: From April 1, covered by HZZO for insured persons up to 70 years old

The amendments to the Law on Mandatory Health Insurance, effective from April 1, 2023, introduced a new provision regarding sick leave compensation for insured persons over 65 years of age. According to the health regulations that were in effect until March 31, 2023, insured persons who reached the age of 65 and continued to be employed were not entitled to sick leave compensation covered by HZZO in the event of illness; instead, they were entitled to salary compensation at the employer’s expense for the entire duration of sick leave. These rules applied to all cases of justified work incapacity, even in the case of work-related injuries.

The salary compensation at the employer’s expense regarding mandatory public contributions was equated with salary payment, meaning that employers bore the burden of sick leave compensation in gross amounts until the employee’s recovery or termination of employment. This limitation in health regulations significantly complicated the employer’s decision to extend the employment of a worker who had reached 65 years of age and had at least 15 years of pensionable service, even though the Labor Law allowed for it.

For the self-employed and craftsmen

Insured persons engaged in self-employment and who were mandatorily insured were in a similar position. Craftsmen and individuals performing freelance professions over 65 years of age were not entitled to sick leave compensation covered by HZZO, and their obligation to pay contributions did not cease after the 43rd day of sick leave, as prescribed in the case of receiving compensation covered by HZZO. Namely, a self-employed person during sick leave covered by HZZO has their contribution obligation suspended, and this applied only to insured persons up to 65 years of age; after reaching 65 years, they were required to pay contributions for their social insurance even during sick leave.

From April 1, 2023, the age limit for entitlement to compensation covered by HZZO has been raised to 70 years and at least 15 years of pensionable service, so that insured persons over 65 years of age will, starting from the 43rd day of sick leave, be entitled to sick leave compensation covered by HZZO in the case of work-related injuries, from the first day of work incapacity. In addition to new cases of work incapacity, this change also applies to insured persons under mandatory health insurance who were on sick leave on the date of the entry into force of the amended Law on Mandatory Health Insurance, i.e., on April 1, 2023. Two situations are possible in this regard.

Caught on sick leave

The first situation concerns insured persons over 65 years of age who were on sick leave until the 42nd day on April 1, 2023. If they are employed, their sick leave compensation until the 42nd calendar day of sick leave is determined as prescribed for sick leave at the employer’s expense, as it was before the amendment of the Law, with the obligation to pay prescribed public contributions from the salary and on the salary. Starting from the 43rd day of sick leave, the employer will determine the amount of sick leave compensation covered by HZZO based on the data on the average net salary paid to them in the six months preceding the month in which the sick leave began. The employer will present this data in a salary certificate, pay the employee the compensation, and refund the paid amount from HZZO. It should be emphasized that the amount of sick leave compensation covered by HZZO is limited to 565.04 euros per month.

Craftsmen, freelancers, and other self-employed individuals over 65 years of age who were on sick leave on the date of the entry into force of the amended Law but still within the 42-day period are in a similar position. Starting from the 43rd day of sick leave, they will be entitled to compensation covered by HZZO, and the amount of compensation will be determined based on the basis on which they paid contributions in the six months preceding the month in which the sick leave began, and is presented in the Insurance Basis Certificate form. If a self-employed person owes contributions, they are not entitled to salary compensation covered by HZZO; however, as long as they are on sick leave, their obligation to pay contributions for mandatory social insurance is suspended.

What this means for employers

The second situation involves employees and other insured persons over 65 years of age who were on sick leave for more than 42 calendar days on April 1, 2023, meaning that their employer had already been paying compensation at their expense for some time after the 42nd day. From April 1, the employer is no longer obligated to do so; they are only required to determine the hourly basis for the employee based on the average salary paid to them in the six months preceding the start of the sick leave and, based on this historical data, determine the amount of compensation covered by HZZO, respecting the maximum compensation limit of 565.04 euros per month. Self-employed individuals will act in the same manner, except that they will present historical data on the bases on which they paid contributions in the Insurance Basis Certificate form.

The raising of the age limit for entitlement to sick leave compensation covered by the social insurance institution should encourage all labor market participants to decide to retain individuals in the workforce for as long as possible. These new provisions are in line with that effort.

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