Published On: Sun, Oct 3rd, 2021

Minister Ottley’s insurance-plan draws criticism

PHILIPSBURG — The announcement by Minister Omar Ottley (Public Health) that he intends to increase the salary-ceiling for insurance under SZV from 67.816 to 120,000 guilders (from $37,886 to $67,039) per January 1, 2022, has drawn criticism from insurance companies and from the Employer Council. They warn that the measure would lead to job losses, increased costs for businesses and lower net salaries for employees.

The Employer Council – an association of the Hospitality and Trade Association (SHTA), the Marine Trades Association (SMTA), the Indian Merchants Association (IMA) and the Timeshare Association (SMTA) addressed the issue with Minister Ottley in a letter dated September 7.

Click here to read letter to Minister Ottley>>>

The Council points out that the labor force is 21,000-strong, while SVZ insures 35,000 people. This is because dependents of insured employees do not contribute any premiums. “Two-thirds are not contributing,” the Council wrote.

“The government proposes to freeze the reimbursement for loss of wages but it does not include civil servants and SZV-employees in the funding for healthcare and accident insurance (ZV and OV) and it does not add a premium for dependents.”

A key concern for the Council is the intention to implement the measure retroactively. “This will cause havoc on the payroll, force people to be uninsured and charge them for a service you did not provide.”

The Council furthermore points to the premium-increase of 10 percent. “This will be for the account of high-income earners who already pay more wage taxes. This is not applied to high earners in the public sector, thus placing an undue burden on the private sector.”

The Council states that there are more than 2,000 civil servants and that they represent the highest paid group of employees on the island. The 115 SZV-employees go home with “a higher average salary than civil servants.”

Lastly, the Council notes that privately insured employees are in the higher tax bracket. “Employers would have to increase their salaries by more than 8 percent to give them the same net.”

The Insurance Association (SMIA) and the Insurers Brokers Association (SIBA) also expressed their concerns in a letter dated September 27, signed by their respective representatives, Robert de Vries and Dwayne Elgin.

“The decision is motivated by the need to cut ZV-OV deficits that stood at 291 million guilders (around $162.6 million) at the end of 2020,” they wrote.

But the measure will lead to increased costs for businesses, a reduction of the net wage for employees, a reduction in turnover tax, wage taxes and other social tax contributions and to uncertainty about coverage and continuity of care, the two associations point out.

They also state that the private insurance industry employs 300 people and that the measure will result in a loss of at least 30 percent (90 employees) of this work force.

Click here to read the press release from the Employers Council>>>

The associations urge the minister to conduct an urgent impact and feasibility study, and to consider a phased implementation and alternative insurance options that make it possible to choose between SZV and private insurance.

The phased implementation is necessary, the associations say, to prevent employees who have a private insurance contract from paying double premiums.

The associations also react to a statement by the minister that he wants to have all employees and resident registered at SZV by January 1, 2023. “This is an apparent plan to establish National Health Insurance.”