Stricter sick leave rules results in insurance savings

Hungary’s National Health Insurance Fund (OEP) managed to achieve a positive budget balance in 2008, according to recent findings. The savings are thought to be linked to the first stage of a health reform in early 2007, introducing stricter rules for sick leave and the supervision and review of the incapacity for work status by OEP doctors. As a result, the number of sick days taken and sick leave expenditure have shown a decline in recent years.

In 2008, the National Health Insurance Fund (Országos Egészségbiztosítási Pénztár, OEP) recorded a positive budget balance in its funds. The accumulation in OEP savings is linked to the fact that employees often choose not to see a doctor due to fears that they may lose their job if they are sick. However, the reverse can also be true: in order to avoid problems at work, employees may opt for sick leave. It has also been observed that in cases of company bankruptcy, employers may encourage their employees to resort to sick leave.

In Hungary, there is no separate insurance fund for workplace accidents. Anecdotal evidence suggests that because of this, less severe workplace accidents are often made to appear as domestic accidents so that the employer can avoid having to pay extra compensation.

Regulatory context

For the first 15 days of their incapacity for work, employees are entitled to sick leave (betegszabadság), which the employer must pay for. After this period, employees are entitled to sick pay (táppénz) – which should amount to between 60% and 70% of the average daily wage, depending on the length of employees’ health insurance contributions. This amount is payable by the OEP. The maximum length of sick pay has remained unchanged over the past 11 years: people with a severe illness are entitled to receive sick pay for up to a maximum of one year.

Trends in sick leave

While there has been no significant change over the past 10 years in the number of employees entitled to sick pay, the number of sick days taken shows a decreasing trend (see table below). Moreover, the level of expenditure on sickness allowance decreased in 2007 compared with 2006.

Data on sick leave, 1998–2007
  No. of people entitled to sick leave No. of sick days Cost of sick leave (in million HUF)
1998 3,530,000 41,700,000 41,255
1999 3,433,000 41,900,000 49,205
2000 3,465,000 41,200,000 56,140
2001 3,474,000 42,600,000 64,206
2002 3,480,000 44,400,000 80,864
2003 3,521,000 45,200,000 98,936
2004 3,485,000 39,200,000 96,240
2005 3,486,000 37,400,000 97,024
2006 3,541,000 36,300,000 99,954
2007 3,520,000 33,000,000 97,389

Note: HUF 1 equals €0.00367 as at 14 February 2010.

Source: Hungarian Central Statistical Agency ( Központi Statisztikai Hivatal, KSH)

The trends show that the higher the age of the employee, the greater the number of sick days taken. Younger employees usually return to work after one or two weeks, while older employees are sometimes absent from work for as long as one to three months. This trend may be related to the fact that young people tend to recover more quickly from an illness and may also be more motivated to continue earning money as soon as possible. Older people tend to be more fragile and many people close to retirement age may instead opt for a disability pension or early retirement.

Underlying principles and supervisory measures

The principles establishing the state of incapacity for work have been elaborated to assist general practitioners (GPs) and supervising doctors at the OEP in their work. Such principles have been applied since October 2004, which is when the number of sick days was determined for each illness. It is likely that the use of such guidelines explains the decrease in the length of sick leave due to back pain, musculoskeletal diseases (MSD), mental and behavioural disorders, and depression.

Supervision and review of the state of incapacity is carried out by a supervising OEP doctor, who has the right to re-examine the patient in the presence of a GP, as well as to review the relevant documentation. The supervising doctor can also refer the patient to a specialist, and propose the discontinuation of sick pay provision if they see fit.

In 2007, supervising OEP doctors inspected 74,262 general medical practices, as well as examining more than 288,000 patients and reviewing over one million documents. The work of the 276 supervising doctors, employed by the OEP on a consultancy basis, is coordinated by 30 full-time head physicians.

Inspection guidelines are in place that were developed on the basis of relatively objective criteria. The guidelines include the number of sick days necessary for recovery from various illnesses. Although not completely rigid, the guidelines provide unified criteria for physicians to determine the duration of the incapacity for work.

The main reasons behind the incapacity for work have consistently been illnesses of the respiratory and locomotor system. In recent years, anxiety disorders have become more common; in such cases, doctors established that the necessary period for recovery was 10 weeks, after which an assessment of the therapy needs to be carried out.

Commentary

An important aspect of ensuring the balance in the sick leave budget is that insured employees should only resort to sick leave if it is justified and for as long as necessary. As a result of the supervisory work carried out by the OEP doctors, employees seem to be increasingly aware of the fact that sick pay is only granted if the severity of the illness and the employee’s insurance justifies it.

Katalin Balogh, Institute for Political Science, Hungarian Academy of Sciences

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