Exemption from contributions

A supplementary health insurance plan doesn't always run smoothly. Employees may be on extended leave, take parental leave, take a sabbatical, or care for family members. The premium waiver provision specifies what happens to insurance coverage and the obligation to pay premiums during these periods.

The Basic Principle

Insurance coverage remains in effect, but the obligation to pay premiums is waived for a specified period. This means that employees can continue to access their benefits without the employer having to pay during this time.

That may sound like a minor detail, but it has two very practical effects: The employer doesn't have to worry about deregistering the employee during periods of absence, and the employee doesn't lose their protection in a situation where they often need it the most.

Common Triggers

• Inability to work: often starting in the seventh week, that is, after the end of continued pay
• Parental Leave: With a Maximum Duration Set by Collective Bargaining Agreements
• Leave of Absence and Unpaid Leave
• Family Care Leave
• Sabbatical, to the extent provided for in the collective bargaining agreement

Which of these situations are covered, when the coverage takes effect, and how long it lasts vary significantly depending on the insurer and the plan. Some plans cover only inability to work, while others cover the entire range of situations.

Two models

Insurers implement the exemption in different ways:

• Included in the plan: The exemption is part of the plan, and the premium is calculated accordingly.
• As an add-on option: The waiver costs an additional fee and can be selected when you purchase the policy.

Whether the additional cost is worth it depends on the workforce structure. In a company with a high rate of parental leave or in industries with above-average rates of long-term absences, it pays for itself more quickly than in a small, stable workforce.

What Happens Without a Premium Waiver

Without this option, the obligation to pay contributions continues even if no wages are paid. The employer then has three options: continue making payments, deregister the employee for the duration, or reach an agreement on a case-by-case basis.

Deregistration is the most unpleasant option because, depending on the plan, re-enrollment may involve waiting periods or a health screening—and because it affects employees who are already in difficult life situations.

What to Look for When Comparing Options

• What situations are covered —only inability to work, or also parental leave, caregiving, and leave of absence?
• When does the exemption take effect, and how long does it last for each instance?
• Is it included, or is there an extra charge?
• What applies when resuming —a seamless transition or re-enrollment?

Conclusion

The premium waiver is one of those options that go unnoticed during normal operations but prove invaluable when it really counts. It’s important to consider this when comparing plans—not because of the savings on premiums, but because it prevents you from having to decide whether to cancel your coverage during periods of inactivity.