Comments and suggestions regarding changes proposed by the European Commission

On 13 December 2016, the European Commission presented a proposal for amending the EU Regulation on the coordination of social security systems. The Commission’s aim is to make the complex coordination rules fairer and user-friendlier. This should make them easier to enforce and avoid fraud. The National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) has now commented on the proposal. 

 

The proposal provides for changes to accessing social benefit systems of the Member States by economically inactive EU citizens; provisions for the posting of workers; benefits for the unemployed and people requiring long-term care; family benefits; and technical regulations. The European Representation published an article on this in December 2016.  

The Commission’s objectives and the initiative for modernisation are welcomed

The GKV-Spitzenverband welcomes the initiative to modernise the coordination Regulation and the European Commission’s objectives. Of particular relevance to the German statutory health and long-term care insurance funds are the coordination of long-term care services, regulations on posted workers and people who work for several employers, various administrative regulations and several technical changes.  

Long-term care benefits: need for change

The European Commission proposes separate rules for coordinating long-term care benefits. The aim is to codify the coordination of these services as per case law from the Court of Justice of the European Union (CJEU). The following amendments are proposed: 

 

• Including the need for long-term care as a separate, independent risk 
• Including a definition of what is meant by a long-term care benefit 
• Introducing a separate Chapter on the coordination of long-term care benefits 
• Providing a detailed listing of long-term care benefits in the Member States 

 

The proposed provisions for long-term care benefits are aligned with current regulations for sickness benefits.  

 

The GKV-Spitzenverband welcomes the goal of creating a clearer legal framework for long-term care benefits, for example, by defining long-term care benefits and providing a list of existing benefits in the Member States. However, the introduction of a separate Chapter on long-term care benefits may lead to unwanted deviations from the current coordination. This can lead to significant difficulties for EU citizens in exercising their rights and an unfair distribution of the burden between Member States.  

 

The introduction of a separate Chapter on long-term care benefits will mean that the risk of illness and the risk of long-term care will be strictly separated from one another in the future. However, the prerequisite for the independent coordination of long-term care benefits, which is separate from sickness benefits, is that all Member States have specific benefits in kind for long-term care, which is not the case. The European Commission’s proposal to introduce a new Chapter on long-term care benefits, as it currently stands, holds the risk of causing difficulties for insured persons or could even result in them losing benefits. This disadvantages insured persons compared to the current legal situation and is not compatible with the Commission’s aim to make the legal status quo more transparent and user-friendly.  

 

The risk of a possible change in jurisdiction or the loss of entitlements is particularly high in situations where pensions are drawn from several Member States and there are no benefits in kind for long-term care in the home country. Up until now, this risk has not existed. Since long-term care benefits, according to CJEU case law, are regarded as sickness benefits, the right to health care in the event of an illness can currently can be used as a starting point if there is no entitlement to long-term care benefits. This ensures that responsibility for sickness benefits and long-term care benefits does not fall apart. The person concerned is subject to the basic principle of social coordination in accordance with legislation of only one Member State.  

 

A better, less elaborate way of achieving the desired result would be to supplement the provisions for sickness benefits with specific rules on long-term care benefits. By adapting the current rules on sickness benefits it is possible to clarify the coordination of long-term care benefits for insured persons without having to change jurisdiction or losing entitlement rights.  

Coordination of social security systems for posted workers

The European Commission has also proposed that the term “posted worker” in the coordination Regulation be given the same meaning as found in the Directive on the posting of workers in the framework of the provision of services (Directive 96/71/EC).  

 

This reference to the Directive on posting workers does not have any discernible added value under social insurance legislation. The regulatory areas of the coordination Directive and the posted workers Directive differ significantly. For example, Article 12 of Regulation (EC) No 883/2004 specifies that the posting period may not exceed 24 months, that the person must undertake a normal activity which is carried out by their employer in the Member State and it forbids the replacement of a previously posted person. The posted workers Directive does not contain such requirements. In order to prevent unfair practices and cases of misuse within the framework of the coordination Regulation, the proposal provides that a document issued by an institution is only valid when all mandatory information has been completed. If there are any doubts to the validity of the document, the issuing institution must react within a specific period of time. The approach taken by the proposals is correct, but there is no possibility for imposing sanctions in the event that the issuing institution does not respond to a request for clarification or fails to withdraw the document.  

 

The issuing institution cannot guarantee that the information which was used as the basis for issuing the Portable Document A1, as provided by the employer, is correct. It is simply assumed that the institution duly assessed the relevant facts.  

Summing up

The GKV-Spitzenverband expressly welcomes the EU Commission’s initiative to modernise coordination legislation. In particular, the proposal to include a definition of long-term care benefits will contribute to greater legal certainty.  

 

However, in order to be able to coordinate long-term care benefits in its own Chapter separate from sickness benefits, there must be comparable benefits in all Member States which can then be made mutually available. But this is not the case. This results in significant problems such as possible changes to jurisdiction and additional expenses in cost accounting. The worst-case scenario is that insured persons even lose their entitlements. However, these serious drawbacks can be avoided by supplementing the rules on sickness benefits with specific provisions for long-term care benefits. It is not necessary to adjust the term “posted worker” in the coordination Regulation to fit with the meaning found in the Directive on the posting of workers in the framework of the provision of services. 

 

The Commission’s proposal can be viewed here.