Topics:
Telework / Remote Work / Social Security
The topic of remote work has become even more important since the Corona pandemic. At that time, the topic was particularly relevant for us with regard to cross-border commuters to Switzerland. Due to the Corona entry restrictions, cross-border commuters were no longer able to commute to work to Switzerland every day. Based on the allocation criteria in the EU / EFTA (Agreement on the Free Movement of Persons / AFMP), this would have led to a subordination under social security law in the country of residence (e.g. in France, Germany or Italy) and no longer in Switzerland (place of employment principle). AHV, IV, BVG, UVG, etc. would therefore have been replaced by the local social security systems in the countries of residence. This was undesirable for a variety of reasons – effort, costs, benefits, equal treatment, permanent establishment risk, etc.
The EU / EFTA had agreed accordingly on special Corona transitional regulations and a new multilateral agreement has now emerged from this.
Persons who work in the country in which their employer's registered office is also located are allowed to carry out up to 50% cross-border telework (maximum 49.9% of working hours) in the country of residence, without having to be responsible for social security in the country of residence. However, not all states have signed this agreement yet.
https://socialsecurity.belgium.be/en/internationally-active/cross-border-telework-eu-eea-and-switzerland
As mentioned, this only applies to teleworking and to the states that have signed the agreement. Otherwise, the «old» 25% rule applies.
Related to the topic of teleworking from the country of residence, the topic of workation has also gained in importance. Combining vacation and work – that sounds tempting. Many employers want to make this possible for their employees to a certain extent, e.g. for two weeks per year. However, there are many challenging aspects to consider. Social security, labour law, taxes, etc. Regarding the obligation to pay social security contributions: If this remains in the home country, there is little to consider from an insurance point of view, the need for additions is small. In the area of health and accident insurance as well as in the area of assistance services / repatriation, there may be gaps in coverage. It is important to note that CTI insurance, i.e. business travel insurance paid by the employer, does not cover workation. Workation is not considered a business trip from an insurance perspective. If an employer wants to insure workation, he must take out a separate insurance cover or add it in his CTI insurance and, of course, pay a premium for this. Otherwise, the employee can take out individual travel insurance or supplementary insurance with a health insurance company.
If the social security subordination moves to the host country (country of residence), many questions arise and there is a substantial need for insurance coverage. In principle, the well-known insurance vehicles for expats could be used here, i.e. International Health Insurance Plan (IPMI), International Risk or Pension Plan (IGP, IPP), but a certain minimum insurance period must be available. On the one hand, this is stipulated by the insurance conditions, and on the other hand, of course, the administrative effort must also be kept within limits. In practice, however, an employer is unlikely to have any interest in such a constellation and would want to avoid such short-term workation stays in countries where the social security subordination is becoming an issue.
Suspension versus Continuation
Anyone returning from an assignment to Switzerland will be deregistered from their employer's international insurance solutions (IPMI, IGP, IPP) and reintegrated into the Swiss system. As far as health insurance (KVG) is concerned, this is completely unproblematic. Either a new KVG must be concluded or the so-called «Entsandten-KVG» (KVG for seconded persons) must be converted back into a «local KVG» (premium according to place of residence). However, supplementary insurance might become a problem if there are health problems. If this problem is only thought of upon return, then it will be too late. The issue of reintegration upon return to Switzerland must be clarified at the beginning of the assignment. There are two possible solutions:
- Suspension: Depending on the provider / health insurance, the supplementary insurance can be suspended (a premium needs to be paid). However, some health insurance companies do not offer this or charge a very high suspension premium. Insurance conditions can also be very unfavourable; it is possible that follow-up treatment of illnesses / accidents that occurred during the suspension period is not covered.
- Continuation: The employer can include a continuation option in the international health insurance plan (IPMI plan). This allows returning employees to take out certain supplementary insurance cover with the IPMI insurer’s local health insurance partner without medical underwriting.
With both options, there are details to consider. In general, however, the continuation option via the IPMI plan is much more advantageous. We are happy to help.