Overcompensation

What is overcompensation?

Overcompensation occurs when, after an accident or during an illness, you receive money from several social insurance schemes at the same time and the total is higher than what you would have earned without the event. Swiss social insurance is meant to make good a loss, not to produce a gain. The prohibition of overcompensation ensures that benefits are not simply added together.

The term comes from the Federal Act on the General Part of Social Insurance Law (ATSG). It applies to all social insurance schemes subject to the ATSG: health insurance under the Federal Health Insurance Act (KVG), accident insurance under the Accident Insurance Act (UVG), invalidity insurance, old-age and survivors’ insurance (AHV), military insurance and the income compensation scheme.

In health insurance, overcompensation mainly plays a role for the daily allowance. For the costs of medical treatment, the question hardly arises, because only one social insurance scheme ever pays for the treatment. A distinction must be made from double insurance: there, you are insured against the same risk with two insurers. Double insurance can lead to overcompensation, but it does not have to.

How it works

The calculation always follows the same pattern:

1. Determine the upper limit. The decisive figure is the presumed lost earnings, i.e. what you would have earned without the accident or illness. Added to this are additional costs caused by the event and any loss of income suffered by relatives.
2. Add up the benefits. Only benefits of the same kind and purpose arising from the same event are taken into account. A daily allowance is compared with another daily allowance, not with reimbursement of treatment costs.
3. Reduce. If the total is above the upper limit, the responsible insurer reduces its benefit by the excess. AHV and IV pensions, helplessness allowances and integrity compensation remain untouched.

For the costs of medical treatment, there is a fixed order: first military insurance pays, then accident insurance, then invalidity insurance and finally health insurance. Only one of them covers the treatment. That is why your health insurer does not pay for an accident as long as the accident insurer is responsible.

For daily allowances from health insurance, there is a protective rule: if your daily allowance under the KVG is reduced because of overcompensation, you are still entitled to the equivalent of 720 full daily allowances. The benefit period is extended accordingly.

Legal basis

Art. 69 para. 1 ATSG prohibits the coincidence of benefits from different social insurance schemes from leading to overcompensation, and limits the calculation to benefits of the same kind and purpose. Para. 2 defines the limit (lost earnings, additional costs, loss of income suffered by relatives). Para. 3 governs the reduction and excludes AHV and IV pensions as well as helplessness allowances and integrity compensation. Art. 64 ATSG sets the order for medical treatment, Art. 66 ATSG the order for pensions.

For health insurance, Art. 78 KVG requires the Federal Council to prevent overcompensation. Art. 110 of the Health Insurance Ordinance (KVV) states that benefits of the same kind from accident, military, invalidity and old-age and survivors’ insurance as well as the income compensation scheme take precedence. Art. 122 KVV governs the limits for benefits in kind and the case where you have a daily allowance under the KVG with several health insurers. Art. 72 para. 5 KVG guarantees the equivalent of 720 daily allowances in the event of a reduction. In accident insurance, the daily allowance is 80 % of the insured earnings (Art. 17 para. 1 UVG); the supplementary pension is set out in Art. 20 para. 2 UVG. Benefits received without entitlement must be repaid under Art. 25 ATSG.

Example: daily allowance from two health insurers

Tom is 45 years old and self-employed. He has taken out voluntary daily allowance insurance under the KVG with two health insurers: CHF 150 per day with insurer A and CHF 100 per day with insurer B. Because of a longer illness, he is fully unable to work. His presumed lost earnings are CHF 200 per day; he has no additional costs. The amounts are a worked example; the rules come from Art. 122 para. 2 KVV and Art. 69 para. 2 ATSG.

A second pattern concerns pensions after an accident. If someone has insured earnings of CHF 80,000 and an IV pension of CHF 30,000 per year, the accident insurer calculates as follows: 90 % of CHF 80,000 is CHF 72,000; minus the IV pension of CHF 30,000, this gives a supplementary pension of CHF 42,000. The UVG pension for full invalidity of 80 %, i.e. CHF 64,000, is the upper limit. This example also uses fictitious amounts and the percentages from Art. 20 UVG.

What this means for you

More insurance does not automatically mean more money. For you, this means:

1. Do not buy daily allowance cover twice. Before taking out a second daily allowance insurance, check whether you are already insured through your employer or another health insurer. A second policy increases the premium, but benefits are reduced when a claim arises.
2. Align the insured amount with your income. If you are self-employed, insure a daily allowance that matches your actual earnings, not more.
3. Report all benefits. Tell each insurer which other benefits you receive arising from the same event. Later repayment claims are more cumbersome than a correct reduction from the start.
4. Check supplementary insurance separately. For insurance under the Insurance Contract Act (ICA), the ATSG does not apply, the contract does. The rules are in the general terms and conditions.

The profiles under Health insurers show which health insurers offer which types of insurance. You compare basic health insurance premiums in the premium calculator. For complex cases involving several insurers, you can request advice.

Common mistakes

• Submitting treatment costs twice. Only one social insurance scheme ever pays for the treatment. After an accident, that is the accident insurer, not the health insurer.
• Assuming the AHV or IV pension will be reduced. These pensions are always paid in full. Other benefits are reduced, for example the pension from accident insurance.
• Comparing apples with oranges. Only benefits of the same kind are added together. A daily allowance is not offset against a hospital bill.
• Applying the ATSG to supplementary insurance. For ICA contracts, the contract terms apply.

You can find more terms relating to work and accidents in the Glossary.