Quadripartite sickness funds talks break down

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At a meeting in October 1997, Luxembourg's social partners failed to find even the beginnings of the solution to the deficit in the country's sickness insurance funds.

The "sickness funds quadripartite" (Quadripartite des caisses de maladies), a four-sided committee made up of representatives of government, employers' associations, trade unions and service providers (eg hospitals and doctors), met on 3 October 1997. The meeting was chaired by the Minister of Social Security, who was accompanied by the Budget and Health Ministers.

The general aim of the "quadripartite" for the sickness insurance scheme is to produce a policy providing health insurance cover for the future. On this occasion, it met to draw up proposals for rectifying the sickness funds' deficit which stands at LUF 862 million for 1996 and is expected to top LUF 1 billion in 1997. Negotiations broke down after four hours.

The sickness funds

Luxembourg's main sickness insurance funds are as follows:

  1. the blue-collar workers' sickness fund (Caisse de maladie des ouvriers, CMO);
  2. the private-sector white-collar workers' sickness fund (Caisse de maladie des employés privés, CMEP);
  3. the civil servants' and public employees' sickness fund (Caisse de maladie des fonctionnaires et employés publics, CMFEP); and
  4. the self-employed workers' sickness fund (Caisse de maladie des professions indépendantes, CMPI).

These are brought together under the umbrella of the Union of Sickness Funds (Union des caisses de maladie, UCM), which has a general responsibility in all matters, subject to the competencies that lie with the individual funds.

For private sector workers, the main sickness benefits take two forms: cash benefits and healthcare benefits.

Cash benefits

These are paid for a maximum of 52 weeks and cover the full salary that the insured person would have earned in gainful employment. The minimum benefit level is the statutory minimum wage of LUF 46,275 per month while the maximum is five times the minimum wage (LUF 231,374). Blue-collar workers are covered by the CMO fund from the first day of sickness, whereas white-collar workers in the private sector continue to be paid their salary by their employer for the remainder of the month in which they fall and for three months thereafter - after that, they are covered by the CMEP.

Healthcare benefits

Consultations, services, medical, dental and paramedical care and medicine are paid for according to the conditions, systems and rates laid down by the UCM.


The blue-collar CMO is funded through a contribution of 9.2% of gross pay, shared equally by the employee (4.6%) and the employer (4.6%). The white-collar CMEP is funded in the same way except that the rates are lower - 2.6% of pay from the employee and 2.6% from the employer.

It falls to the UCM, as the body with authority to make decisions, to ensure there is an overall budget that does not run up a deficit, and which must also hold reserves of 10% of total expenditure. With the current deficit, it follows that there are only two solutions:

  • reduce statutory benefits; or
  • increase contributions.

The positions of the partners involved


The trade unions have always been opposed to a reduction in sickness benefits. They have made it quite clear that they could not accept a reduction of cash benefits or the introduction of waiting days. Sickness fund benefits are seen as social benefits that could not be abandoned in any circumstances. For the unions, as a last resort, contributions would have to be raised to rebalance the funds.


Employers' associations have stated that they are categorically opposed to an increase in contributions. In fact, they are insisting on larger co-payments from the insured persons to cover certain benefits and the introduction of a financial contribution from employees to pay for cash benefits; it is this, in their view, that has been mainly responsible for the current deficit. As far as medicine is concerned, the employers have called for more transparency and a review of control mechanisms and of penalties when the system is abused.

For the employers' associations, "the competitiveness of enterprises must not be compromised by wage costs rising in response to slippage in social benefits."

Service providers

Representatives of doctors and hospitals have been criticised by the other social partners for causing some of the deficit themselves, by prescribing medicine and signing employees off work without good enough reason. Apparently, doctors' fees rose by 23% between 1994 and 1995. The service providers have announced that they wish "to continue to find solutions with a view to keeping the situation under control".


The Government has come out against an increase in contribution rates on the grounds that it would add to payroll costs. Moreover, it has adopted a number of other measures, particularly in relation to taxation, which are intended to reduce the charges that are a general burden on employment.


The reasons for the failure of the negotiations lie in the diametrically opposed positions of the social partners: some of them want to hang on to their social gains while others refuse to accept additional charges.

It is worth recalling that health insurance expenditure stands at LUF 34 billion and accounts for 5.7% of Gross Domestic Product (GDP). Reserves stand at LUF 2.6 billion, a figure that might evoke envy in most EU countries. The current deficit is therefore not dramatic, but it should be enough to encourage all partners to introduce more efficient control mechanisms in the future so as to deal with some known abuses.

The UCM annual general meeting, which is due to take place on 12 November 1997, will have to come up with some solutions. As the problem has not been resolved through the "quadripartite", the danger is that the solution will be determined on the basis of a majority vote. It is impossible to predict the outcome at this stage, but some parties are bound to be dissatisfied. (Marc Feyereisen, ITM)

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