Changes within the statutory accident insurance system

The act for modernization of the accident insurance system (UVMG): the legislative instrument for reform of the statutory accident insurance system not only has a long name, but also substantial content. The most important changes at a glance:

Adjustment for excess inherited obligations: inherited obligations of structural origin are to be redistributed

The UVMG replaces the previous adjustment system of the BGs by a new system, the adjustment for excess inherited obligations. Under this system, inherited obligations which are attributable to structural change (the "excess inherited obligations") in particular will be borne mutually in future by all BGs. In practice, this means: firstly, each BG raises pensions obligations approximating to its structural obligations. The structural obligations are those which would have been imposed upon the BG had it always registered as many (or as few) occupational accidents and diseases as in the present year. The part of the BG's own pensions obligations which exceeds this mathematically determined value is assigned to a mutual fund. A part of the mutual fund is covered by the structural obligations of the BGs with negative inherited obligations – i.e. those BGs which at present, based upon the accidents and occupational diseases currently occurring within their respective sectors, would be levying premiums which are too low.

The excess is then distributed among all the BGs. The legislator has defined the following algorithm for this purpose: 70% of the excess inherited pensions obligations is to be distributed according to remunerations, i.e. economic performance; 30% according to new pensions, i.e. risk. The new system will be phased in gradually; the process is expected to be completed in 2013.

Background:
The inherent concept of excess inherited obligations was conceived by the autonomous administration. It is intended to ensure that the premiums levied by BGs remain commensurate with risk in the future. In sectors of declining economic importance, this is no longer the case, since legacy obligations inherited from times in which accidents were generally more common are now being distributed between fewer companies. Despite the falling accident rate, the premium remains constant in this case, or may even rise. Conversely, in sectors exhibiting strong expansion, the problem is the reverse. These sectors are effectively growing faster than their obligations. Their current premiums do not therefore reflect the actual risk.

Consequences for employers

The adjustment for excess inherited obligations has a direct impact upon the premium paid to the BG. Businesses in declining sectors, such as large parts of the manufacturing industry, may anticipate a drop in premiums. In growing sectors, such as the service sector, a trend towards rising premiums may be anticipated. Special arrangements may however be made in certain cases. Non-profit businesses for example must contribute towards financing of the structural obligations; they are however exempted from contributions to the mutual fund (and thus from funding of the excess inherited obligations). For the part of the excess obligations which is distributed according to remunerations, an allowance of total wage costs is made corresponding to six times the average remuneration for each company. Many small businesses will also benefit from the new arrangement. Experts within the accident insurance system estimate that the new system will bring relief to up to 1.5 million businesses. Only rarely will companies in sectors which will be subject to greater obligations face additional obligations exceeding 0.2% of the total wage costs.

Abolition of the documentation of remuneration: new reporting duties increase bureaucracy

At present, businesses report their accident insurance data to their BG on an annual basis. They report, by means of documentation of remuneration, the total wage costs paid to their employees, how many hours the latter have worked, and how working hours and total wage costs are distributed over the hazard tariff activities within the company. As of 2012, documentation of remuneration in this form will cease to be required. It will be replaced by the extended reporting method, which will become mandatory for employers as of next year. The new method functions as follows: instead of a single annual report for the entire company, the employer will in future report the accident-insurance-related data together with the annual remuneration report for the total social insurance premium, i.e. for each of his employees. For this purpose, a further six fields will be added to the remuneration report in which the employer will state the following information for the employee:

• The company's BG membership number
• The BG plant number
• The number of hours worked by the employee
• The remuneration paid to the employee which is subject to mandatory insurance premiums
• The hazard tariff activity to be assigned to the employee (two fields)

These data must also be reported when the employee's registration is cancelled, or for example in the event of a change in health insurance institution.

Background

With enactment of the second SME relief act, responsibility for plant audits with regard to accident insurance has passed from the BGs and public-sector accident insurers to the pensions insurance institutions. In future, the latter will check, on behalf of the accident insurance institutions, whether the employer has reported the correct data relating to the statutory accident insurance. The pensions insurance system wishes to process and check these data for each individual employee, since it also checks all other data (i.e. the reported data on the health, nursing, unemployment and pensions insurance) for each employee. This was the background to the enactment of the new provisions. The Federal government estimates that abolition of the documentation of remuneration will also reduce the costs of bureaucracy by €56 million.

Consequences for employers

The BGs and public-sector insurers have issued explicit and public warnings that the new arrangements for the reporting procedure will above all mean one thing for employers: more bureaucracy. The National Regulatory Control Council has measured the bureaucratic expenditure entailed by generation of the documentation of remuneration. It has not however measured the costs which will be caused when the documentation of remuneration is abolished and the data must be reported by different means. In the opinion of the accident insurance institutions, certain aspects were consequently neglected in the calculations. These include:
Personnel costs: input of the data will be more time-consuming. Should data be found retrospectively to be incorrect, the entire data record must be cancelled, including the data relating to the other branches of the social insurance system. The record must then be corrected and resent.

Loss of flexibility: should an employee be employed in more than one hazard tariff activity, the employer must generate one or more additional reports. Sector-specific solutions for simplification of the procedures by which the total wage costs are assigned to hazard tariff classes are also now rendered obsolete.

Costs of software: when purchasing new wages accounting software for the coming year, employers must also ensure that the applications include the module for the accident insurance. It can be assumed that such products will become more expensive.
Expenditure for external wages accounting: should the remuneration reports be generated by an external accountant, the employer must also anticipate higher fees for the service.