Collective insurance

What is collective insurance?

Collective insurance is a single insurance contract that protects many people at the same time. The insurer’s contracting party is not the individual but an employer, an employers’ association, a professional association or an employees’ organisation. The insured persons are defined as a “group of insured persons”, for example “all employees working 20% or more”.

In health insurance, you mainly come across collective insurance in two forms:

• Collective daily sickness allowance insurance. The employer insures its employees against loss of earnings due to illness. Many of these contracts are governed by the Insurance Contract Act (ICA). There is also voluntary daily allowance insurance under the Federal Health Insurance Act (KVG), which can likewise be taken out collectively.
• Collective contracts for supplementary insurance. Employers or associations negotiate terms with an insurer for their members’ supplementary insurance. This is often referred to as a “collective discount”. These contracts are governed by the ICA; exactly what they offer is set out in the contract concerned.

Basic health insurance must be kept clearly apart. There, each person takes out their own contract, and the insurer must charge all insured persons the same premiums in principle. An employer cannot get you a cheaper premium for basic health insurance. Premiums differ only by canton, premium region, age group, deductible and insurance model, and you can compare them in the premium calculator.

How it works

Collective daily sickness allowance insurance usually works like this:

1. Conclusion by the employer. The employer chooses the insurer, the insured share of salary, the waiting period and the benefit period. The insurer sets the premium in the contract. Whether and how much of it employees co-finance through a salary deduction is set out in the employment contract or the staff regulations.
2. Information for you. The employer must inform you about the essential content of the contract, about amendments and about termination, in writing or in another form that allows proof by text.
3. When you fall ill. If you are ill and unable to work, the employer reports the case to the insurer. Once the waiting period has expired, the insurer pays the daily allowance, depending on the contract either to the employer, who passes it on with your salary, or directly to you. However, you have your own entitlement against the insurer.
4. Leaving. If you leave the company, your cover under the collective contract ends. Whether you can switch to individual insurance is governed by law for KVG contracts and by the contract for ICA contracts. This is the right of transfer.

Collective insurance often replaces the statutory continued payment of salary during illness. Without insurance, the employer must pay the salary for a limited time in the event of illness: for three weeks in the first year of service, then longer depending on the length of employment. A different solution is permitted if it is agreed in writing and is at least equivalent for you.

Legal basis

Some special rules apply to collective insurance under the ICA. Art. 3 para. 3 ICA obliges an employer that takes out collective personal insurance to protect its employees to inform them about the essential content of the contract and about its amendment and termination. Under Art. 95a ICA, the beneficiary has an independent right to claim against the insurer as soon as the illness or accident occurs. Art. 2a para. 4 ICA excludes the right of withdrawal for collective personal insurance. In collective daily allowance insurance, under Art. 35a para. 4 ICA both parties may cancel ordinarily and after a claim, unlike in supplementary insurance, where these rights belong only to the policyholder. Under Art. 46 para. 3 ICA, claims under collective daily sickness allowance insurance become time-barred after two years.

For voluntary daily allowance insurance under the KVG, Art. 67 para. 3 KVG specifies who may take out collective insurance: employers for themselves and their employees, employers’ organisations and professional associations, and employees’ organisations for their members. Under Art. 77 KVG, premiums may differ from those of individual insurance but must be set so that the collective insurance is at least self-financing. Art. 71 KVG gives a right to transfer to individual insurance when you leave the group.

In basic health insurance, Art. 61 para. 1 KVG stipulates that the insurer charges its insured persons the same premiums, unless the law provides for an exception. Continued payment of salary by the employer is governed by Art. 324a of the Swiss Code of Obligations (CO); para. 4 allows a different arrangement that is at least equivalent.

Example: daily allowance under the collective contract

Marco is 38, works full time and earns CHF 6,500 a month. His employer has collective daily sickness allowance insurance under the ICA. The contract values in the table are assumptions for illustration; the actual values are set out in Marco’s staff regulations and the collective contract.

What this means for you

As an employee, it is worth knowing three things:

1. What cover do you have? Ask the HR department about the insured share of salary, the waiting period and the benefit period. Your employer must inform you about them.
2. What happens when you leave? Before you resign, check whether you can transfer to individual insurance and within what deadline. This is particularly important if you are ill or have a gap before your next job.
3. Do you need your own daily allowance insurance? Self-employed people and people without a collective contract have no automatic protection against loss of earnings due to illness.

For discounts on supplementary insurance: compare the benefits, not just the discount. A discount on insurance you do not need saves nothing. Also watch out for possible double insurance if you have similar cover through your employer and privately. You can find the insurer profiles under health insurers. For questions about your situation, you can request advice.

Common mistakes

• Expecting a collective discount in basic health insurance. There is none. The basic health insurance premium is the same for all of an insurer’s insured persons in the same region, age group, deductible and model.
• Missing the transfer. With KVG daily allowance insurance, you have three months after the written notification. With ICA contracts, the deadlines in the contract terms apply.
• Believing only the employer can make claims. You have your own entitlement against the insurer.
• Underestimating the limitation period. Claims under collective daily sickness allowance insurance governed by the ICA become time-barred after two years, not five.

How we build examples and comparisons is explained under how we calculate.