Result of leave negotiations unclear. What should insureds know about Brexit?

On 29 March 2017, Her Majesty’s government declared that it intended to leave the EU and thus triggered the two-year deadline preceding Britain’s exit and stipulated by the EU Treaty. In the meantime, the Brexit deadline has been extended and is set to end no later than on 31 January 2020. The question that remains unresolved relates to the point in time and conditions of the exit (Brexit).

 

This is the reason why the Deutsche Sozialversicherung (German Social Insurance) is preparing different scenarios including consequences it may have on insureds and all those entitled to a pension.

 

This will have implications for the health and care insurance system as well as for the accident and pensions insurance system. The above applies to the gainfully employed connected to the United Kingdom, to students matriculated in the UK, beneficiaries of a German pension including their family members as well as British subjects living in Germany and all those intending to claim pension entitlements once the Brexit process is complete.

Soft Brexit

The withdrawal agreement is the agreement defined in the EU Treaty to be concluded between the candidate for departure and the EU. It stipulates all terms and conditions governing the severance and regulations required for the transition phase. The withdrawal agreement successfully negotiated between the EU and the government of the United Kingdom, rejected more than once by Parliament and recently renegotiated, stipulates a transition phase which will last until 31 December 2020. Such phase may be subject to a one-year or two-year extension. During this period, regulations concerning the coordination of social security systems will remain in force (e.g. in respect of tourists, expats, pensioners, students) so that insureds and those entitled to a pension will continue to have the same entitlements as before.

 

In case of an occupational accident or an occupational disease, they may use the European Health Insurance Card (EHIC) or an entitlement document to obtain medical treatment in the United Kingdom or have their care allowance transferred to there. In case of an occupational accident or disease, also British subjects who are covered by the National Health Service (NHS) could still be indemnified in the EU on the basis of the EHIC or the provisional replacement certificate or said entitlement document issued in the UK. Moreover, in order to acquire pension rights, German and British time accounts could be tallied up so that the minimum period of insurance of each pension type can be attained.

Hard Brexit

Should we be confronted with a no-deal Brexit, i.e. without any rules governing the severance and without any transition period, neither the European social security coordination rules nor the Directive on the Application of Patients’ Rights in Cross-border Healthcare would be applicable. This is why the manifold benefits, which would apply in relation to the UK during its EU membership or else during a transitional phase following the UK’s departure based on a deal, will be excluded after a no-deal Brexit.

 

The Social Security Agreement signed by the Federal Republic of Germany and the United Kingdom on 4 April 1960 could possibly be reinstated. It is true that it includes requirements concerning the applicable law, e.g. in respect of secondments or exemption agreements, but is not congruent with the coordination law in force. This, however, does not include, among other things, care insurance.

Getting ready at the federal level

With the aim to avoid any transitionless lapse of existing benefits, the Federal State legislator has passed a bill on transitional arrangements in the field of Social Security (BexitSozSichÜG in short) in case of the UK’s departure from the EU. Inasmuch as this unilateral step in relation to the United Kingdom is possible, the idea is to ensure short-term grandfathering, to maintain trust and to avoid social hardship in support of those particularly concerned by Brexit.

 

In concrete terms, this means that insureds permanently residing or having resided in the United Kingdom will neither lose their health or care insurance coverage nor be obliged to take out concurrent policies as a result of Brexit. Situations arising out of membership rights and eligible insured periods accrued in the United Kingdom shall even now be taken into account.

 

As the provision of assistance in the form of benefits in kind as stipulated in the United Kingdom in case of a no-deal Brexit will not be applicable, rules on cost recovery for persons permanently residing in the UK and having declared their adherence to the statutory health insurance fund (“GKV” in German) in accordance with the BrexitSozsichÜG are expected to provide relief.

 

Provided, however, that benefits due on account of an occupational accident or occupational disease are claimed, cost recovery shall be granted according the German Code of Social Law VII.

 

In the field of pension insurance, all those benefit rights acquired within the framework of the statutory pension insurance scheme and ascertained during the UK’s EU-membership will be preserved. In case of a pension entitlement claimed after a hard Brexit, such periods of insurance that have been accrued in the UK may as a rule and in accordance with European law be taken into account beyond the exit day.

 

The umbrella organisations of the German social insurance system have issued a joint statement on the implications a no-deal Brexit may have for employers and employees in insurance and contribution law, to be published at short notice in case of a no-deal Brexit.

Information offered

The GKV-Spitzenverband has published Brexit-related information at https://www.dvka.de/de/informationen/brexit/citizens.html. This website describes possible implications arising in connection with the Brexit by asking questions and giving related answers to the target group of employers and gainful workers, insureds, British citizens residing in Germany, students and service providers.

 

The German statutory accident insurance system (Deutsche Gesetzliche Unfallversicherung) has published Brexit-related information at www.dguv.de.

 

The German Pension Insurance (Deutsche Rentenversicherung) has released information on Brexit at  www.deutsche-rentenversicherung.de. Once it has been made clear when and under what circumstances the United Kingdom will leave the EU, all those concerned will be proffered tailor-made support.