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Changes for employers in the payment of sickness benefit

Thursday, 21. May 2009 kell 12:18

As of 01.07.2009, the procedure for the payment of sickness benefit will change, applied for certificates for sick leave according to which leave from work begins on 1 July 2009 or later.

Changes are due to updates in the following legislation:

Changes in the payment of sickness benefit:

  • Sickness benefit shall be paid to the insured person starting from the 4th day of his illness (currently it is paid starting from the 2nd day);
  • From the 4th to 8th day of the insured person’s illness, the sickness benefit shall be paid by the employer in the amount of 80% of the employee’s average wages;
  • Starting from the 9th day of illness, the sickness benefit shall be paid by the Health Insurance Fund;
    The employer is not required to pay the benefit if the reason for leave is:
    • Occupational disease (2),
    • Accident at work (5),
    • Accident at work in traffic (6),
    • Complication/illness caused by accident at work (7),
    • Injury upon defending the interests of the state or society and upon preventing criminal offence (8),
    • Transfer to a lighter job (17) and
    • Illness or injury during pregnancy (19).

In such cases, sickness benefit shall still be paid by the Estonian Health Insurance Fund, starting from the 2nd day of illness and pursuant to the procedure and rate applied prior to 1 July 2009.For the types of benefits listed, more detailed information on benefit rates is available on the website of the Estonian Health Insurance Fund.

Main changes in submitting certificates for incapacity for work:
If the insured person has several employers, the doctor shall give the insured person as many certificates for incapacity for work with the same number as the insured person has employers.

The employer shall keep the originals of certificates for sick leave paid by him as of 1.07.2009 and shall submit to the Health Insurance Fund copies of said originals, accompanied with required entries.

Submission of all certificates for sick leave (incl. those lasting up to 8 days, pursuant to which the employer himself has paid benefit) to the Estonian Health Insurance Fund is obligatory as the Health Insurance Fund relies on the entries of initial certificates upon paying for the follow-up certificates. Likewise, it is still necessary to maintain official statistics of sickness benefits (incl. statistics of use of certificates and sickness days) and monitor the justification of sickness benefits.

The employer shall submit the certificate for incapacity for work or its copy, along with the referral for certificate for incapacity for work and other necessary documents, to the regional department of the Estonian Health Insurance Fund within seven calendar days after the day of receipt of the certificate for incapacity for work from the insured person, and does it in the following manner:

  • Submits the originals of the insured person’s certificate for care leave, certificate for maternity leave and certificate for adoption leave,
  • Submits the original of the certificate for sickness leave if the certificate is not subject to payment by the employer,
  • Submits copies of all certificates for sickness leave paid by the employer.

Example of the submission of certificates for sick leave and payment of benefits as of 01.07.2009:
The employer shall receive certificates for sick leave from Martin, Kalle and Kati:

  1. The reason for leave from work according to Martin’s certificate for sick leave is “Illness” and the period of leave from work is 29.06.2009 – 03.07.2009.
    Martin’s employer fills in the referral for certificate for incapacity for work and submits it to the Estonian Health Insurance Fund along with the certificate for sick leave within 7 days. As Martin’s certificate for sick leave begins before 1 July 2009, the new procedure for the payment of sickness benefit does not apply to him.

  2. The reason for leave from work according to Kalle’s certificate for sick leave is “Illness” and the period of leave from work is 01.07.2009 – 18.07.2009.
    Kalle’s employer makes a copy of the certificate for sick leave, fills in the referral for certificate for incapacity for work and submits both to the Estonian Health Insurance Fund within 7 days. The employer shall then calculate and pay Kalle’s sickness benefit for the period of 04.07.2009 – 08.07.2009 and does so not later than on Kalle’s pay day (but not later than within 30 calendar days after the submission to the employer of the duly prepared certificate for sick leave). To this end, the employer shall calculate, on the basis of Kalle’s wages for 6 months prior to the illness, the amount of average daily wages pursuant to the procedure for the payment of wages established by the Regulation of the Government of the Republic (let us assume that this amount is EEK 500). To find out the sum of the sickness benefit, the employer takes 80% of EEK 500 and multiplies it by 5 days (400 x 5 = 2000). Income tax is deducted from the benefit, 0.21 x 2000 = 420. Thus, the amount of sickness benefit paid to Kalle by the employer is EEK 1,580.

    Kalle also receives sickness benefit from the Estonian Health Insurance Fund for the period of 09.07.2009 – 18.07.2009. To this end, the Health Insurance Fund shall calculate the average income per calendar day pursuant to the 2008 data of the Tax and Customs Board of the social tax calculated for Kalle. According to the Tax and Customs Board, the amount of social tax calculated for Kalle in 2008 formed EEK 39,600, thus Kalle’s income in 2008 was 39,600/ 0.33 = EEK 120,000. To find out the average income per calendar day, the income shall be divided by 365 (120,000 / 365 =328.77). To find out the amount of the benefit, 80% shall be taken of the average income per calendar day and the result will be multiplied by the number of days to be compensated (10 x 328.77 x 0.8 = EEK 2630.16. Income tax is deducted from the benefit 0.21 x 2,630.16 = 552.33. Thus, the amount of sickness benefit paid to Kalle by the Estonian Health Insurance Fund is EEK 2078 (upon payment the Health Insurance Fund rounds the benefits to full kroons).

  3. The reason for leave from work according to Kati’s certificate for sick leave is “Illness or injury during pregnancy” and the period of leave from work is 01.08.2009 – 10.08.2009.
    Kati’s employer makes a copy of the certificate for sick leave, fills in the referral for certificate for incapacity for work and submits both to the Health Insurance Fund within 7 days. As the reason for leave from work is “Illness or injury during pregnancy”, the employer shall not pay sickness benefit and Kati shall receive sickness benefit from the Estonian Health Insurance Fund similarly to the previous procedure (starting from the 2nd day of illness and in the amount of 80% of the average income per calendar day).

Changes on the form of certificate for incapacity for work
As of 01.07.2009, the wording of some of the fields and titles on the form of certificate for incapacity for work will also change. For instance, the field “Date of the decision of the Labour Inspectorate in case of impossible transfer to another job” shall be replaced with “Temporary refusal to perform duties or release from performance of duties”, where the employer shall write the date as of which the employee temporarily refused to perform duties pursuant to §18(2) of the Employment Contracts Act, or the date when the employee was released from the performance of duties pursuant to Public Service Act.
The new form of certificate for incapacity for work is available on  the website of the Estonian Health Insurance Fund.

Please pay attention to the fact that changes only concern the payment of sickness benefit. Payment for care allowance and maternity benefit is still carried out by the current procedure of the Health Insurance Fund.

Additional questions regarding the changes in the payment of benefits for incapacity for work, taking effect in 01.07.2009, can be submitted to the Estonian Health Insurance Fund via the following e-mail address: tooandja|a|haigekassa.ee

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