Stricter health insurance rules spark debate among social partners

New and stricter government regulations on the Swedish national health insurance system came into effect in January 2010. As thousands of people lose the right to sickness benefits, this move has been highly criticised by trade unions and other actors of society concerned about the possible alienation of individuals and weakened employment security. After 180 days, employees on sick leave will have to take up some work if they can.

Background

In 2008, the Swedish government introduced a major reform of the national social and health insurance system which sets a limit of 180 days of sick pay. This is a notable difference from previously when no formal limits applied, which resulted in very long periods of sick leave. If an employee is considered to be able to work after 180 days, sick payment will cease under the new system and employees will have to return to work or risk losing their existing employment (SE0901019I).

As 2010 begins, the new and tightened rules have come into effect, resulting in thousands of people losing the right to sickness benefits.

Characteristics of new health insurance system

According to the government, the purpose of the reform is that the social and health insurance system must create stronger incentives for employees to return to work. Research shows that long periods of sick leave reduce the chance of an employee returning to work, and the government underlines the importance of targeted measures at an early stage of absenteeism due to sick leave.

The Swedish Social Insurance Agency (Försäkringskassan) will scrutinise the working capacity of people on sick leave. During the first 90 days, sick pay will be granted if it is not possible for the employee to perform their usual work; after that period, sick pay will only be given for an additional 90 days if it is not possible to perform any other work at the same employer. After 180 days, sick pay will be given only if it is not possible for the employee to perform any kind of work at any employer anywhere in the country.

Effects of reform

On 1 January 2010, 24,000 persons lost the right to sickness benefits and another 32,000 individuals are expected to lose it during the year. A number of these people are entitled to unemployment benefit; however, many people left employment insurance when the government heavily increased the insurance premium a few years ago and they thus lack protection.

Some people have not participated in the labour market for years and it will be particularly difficult for them to find new employment. Concerns have been raised that more people will be forced to apply for social welfare allowances.

Reactions of social partners

The new regulations have caused considerable debate among the social partners. The government states that the aim of the new regulation is to build a bridge between social insurance and employment policies. However, the Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) and the Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) instead see a risk of employees falling through the safety net between the Swedish Public Employment Service (Arbetsförmedlingen) and Försäkringskassan. The former service might consider an employee too sick to work and the latter agency might deem the same employee too well to be on sick leave.

The Minister for Social Security, Cristina Husmark Persson, emphasises that the objective is to create stronger incentives to return to work; she considers the new regulations as a way of welcoming people back to work and not as a means of affecting employment security. However, several trade unions have disagreed with this view. The trade union for professionals in the private sector, namely Unionen, as well as the Union of Civil Servants (Statstjänstemannaförbundet, ST), the Swedish Association of Health Professionals (Vårdförbundet) and the Swedish Union of Local Government Officers (Sveriges Kommunaltjänstemannaförbund, SKTF) argue that employment security is indeed threatened as the new regulations imply that employees on sick leave will have to give up their employment if they are unable to return to work within six months. Trade unions are also critical of the lack of preventive and rehabilitation measures, which means that employers do not have to take responsibility for sick-listed employees by providing treatment and company medical services.

Adjustments to ease regulation

The strong criticism from trade unions and other actors has compelled the government to redefine the regulations to some extent. After some medical doctors came forward to protest about what they see as unreasonable consequences for people diagnosed with illnesses such as cancer, the government has introduced exceptions from the 180-day rule for seriously ill people. Temporary special rules have also been introduced to make it easier to claim unemployment benefit during the transition period, in order to prevent people from losing all social welfare benefits and help them back into the labour market.

However, trade unions believe that these adjustments are not effective enough as they see a risk of employees being forced to work even though not feeling well. The unions claim that the reform is counterproductive as it could eventually lead to an increased number of registered sick employees.

Commentary

The nature of the debate is highly ideological and shows clearly the different attitudes of the government and trade unions on who is to be included as a part of the labour force and who is to be considered as a beneficiary of sick payment. Thus, it is a battle concerning the extent, purpose and target groups of the social welfare net.

Mats Kullander and Ellinor Häggebrink, Oxford Research

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