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With absence insurance, you are insured for the costs you incur when your employees fall ill

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Expert absenteeism for years

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All about absence insurance

Absenteeism insurance is also called sick leave insurance or sick pay insurance. With absence insurance, you are insured for the costs you incur when your employees fall ill.

When an employee gets sick, you as an employer are required to continue paying wages for 2 years.

You will also face other costs, such as replacement staff, loss of production and reintegration costs. All of these combined can add up considerably.

Therefore, absenteeism insurance can help.

What is absence insurance?

Does your employee fall ill? Then as an employer you are obliged to continue paying wages for 2 years. This is called the obligation to continue to pay wages. The costs for a sick employee can be considerable. In addition to continuing to pay wages, you may also have costs for replacement personnel, possible lost revenue, costs for absenteeism counseling and reintegration costs. Especially when your organization is not that big, it is not always easy to pay these costs. That's why you can take out absenteeism insurance. With absence insurance you are insured for the costs when your employees fall ill.

When to take out absenteeism insurance?

Taking out absence insurance is not mandatory. So when is it wise to take out absenteeism insurance? If an employee is sick for a long time, this often brings high costs. When in doubt about taking out absenteeism insurance, it is important to look carefully at your company's financial capacity. Suppose that several employees are sick for a long time, can you absorb the costs of absenteeism yourself? Or will/can you not cover the costs yourself in that case? The premium for absence insurance may seem high, but the cost of a sick employee is much higher still. The fact that the likelihood of (a lot of) sick leave in your organization may be small does not really matter.

What does absence insurance cost approximately?

To calculate the premium for absence insurance, an insurer uses a premium percentage. The premium for absence insurance can be calculated by multiplying this premium percentage by the company's total payroll costs. On average, the premium is between 1.5% and 5.5% of total payroll costs. The amount of the percentage depends on several factors. An insurer looks at:

  • The composition of your staff (age, number of part-timers, etc.)
  • The sector or industry in which you work
  • The absence figures of the last 3 years
What does absence insurance cover?

The coverage of an absenteeism insurance may differ per insurer. In any case, the coverage of an absenteeism insurance includes the costs of continued payment of wages of a sick employee for the first two years. However, a sick employee has even more costs, because your employee will probably return to work after the absence. That is why some insurers include the following costs in their policies:

  • The employer's costs
  • The absence management
  • The reintegration

The coverage can differ from one insurer to another, so always check your insurer's policy conditions.

Is absence insurance mandatory?

No, taking out absence insurance is not mandatory. As an employer, you decide whether or not to purchase absence insurance. Although taking out absence insurance is not required by law, it is often a wise choice. Did you know that a sick employee costs you an average of €250 per day? The biggest cost is the continued payment of wages. In the Netherlands, you must continue to pay the salary of a sick employee for two years. This must be at least 70% of the gross salary, but many collective bargaining agreements stipulate that you must continue to pay 100% of the salary during the first year. This can vary from one CAO to another. In addition, of course, you have to deal with all the other costs, such as reintegrating the employee and perhaps hiring a replacement.

What is covered by sick leave?

There are several types of absenteeism. The most common is sick leave. Absenteeism and sick leave are often considered the same thing, but absenteeism is not always related to illness. Absenteeism means an employee's failure to work due to some reason. Absenteeism occurs when an employee is unable to fulfill their employment contract due to demonstrable medical reasons. These can be physical complaints, such as the flu but also psychological complaints and private circumstances.

If your employee reports sick, it is important that you, as an employer, have insight into the reason for absence. Sometimes the same employee reports sick several times a year (frequent short-term absenteeism). Although in principle you do not need to do much in the case of repeated short-term absence, it is a good idea to view this repetition as a signal. Frequent short-term absence often precedes long-term absence. By understanding the reason, you can anticipate this and look for a solution to help the employee.

Types of absence

There are different types of sick leave, namely:

  • Short-term sick leave
  • Frequent short-term sickness absence
  • Long-term sick leave
  • Unauthorised absence

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