Coronavirus and temporary unemployment of employees - AG Employee Benefits

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business woman in times of temporary unemployment due to coronavirus

Published on 19/05/2020

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Coronavirus (COVID-19): Full details of the new legislation on temporary unemployment

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​On the 18​th of May 2020, a new law was published in the Belgian Official Journal on extraordinary measures to provide additional support for the more than 1.2 million people who have been temporarily laid off in Belgium as a result of the coronavirus crisis. This includes continuing supplementary pension contributions and maintaining risk covers, plus the option to defer premium payments until 30 September 2020. AG extends the corona measures on supplementary pension contributions and risk covers until 31 December 2020. You will find the full details below.


Update: Now, many companies still need to make use of the temporary unemployment measures, and this need will probably remain high even after September 30th. With this in mind, AG has decided to extend the corona measures on supplementary pension contributions and risk covers until 31 December 2020. That means that supplementary pension contributions and risk covers will be maintained until the end of this year, also for your staff members that have been furloughed. The extension of the measures beyond 30 September is an AG initiative and no longer provided by law. As such, it requires a (temporary) amendment to your pension scheme. As a pension plan sponsor, you will need to comply with the requirements arising from the modification of a pension scheme and notify your plan participants about this temporary continuation.​

Update:​ Effective 1 October, there will be a change in the legislation concerning the conditions for temporary layoffs. You will now have two options to choose from if you need to put your staff on furlough:  "COVID" temporary unemployment or "regular" temporary unemployment. AG will cover both types of temporary layoffs, with no distinction between the two, until 31 December 2020.

Quick refresher: Under normal circumstances, what happens with contributions towards a supplementary pension and the different risk covers if your staff member has been temporarily laid off?

Temporary unemployment means that your staff member's employment contract has been suspended. This generally means that s/he stops accruing a supplementary pension and that the risk covers (death, hospitalisation, outpatient care, income protection and waiver of premiums) will also be terminated.

Under normal circumstances, as an employer, you must report the temporary unemployment to AG, and premium payments will then be suspended.

In some cases, however, the pension plan regulations and/or policy do allow for the continuation of supplementary pension contributions and risk covers in the event of temporary unemployment. In these cases, the policy terms and conditions continue to apply and the covers remain intact. There is no need for you to take any further action. It is therefore important to check the specific wording of your pension plan regulations or insurance agreement(s).

If you have set up a cafeteria plan for your staff members, then the various guarantees included the plan will count a single commitment, and the suspension (or continuation during any periods of temporary unemployment) will apply to all of the guarantees.



What about temporary unemployment due to the coronavirus crisis?

But circumstances these days can hardly be considered normal. Which is why Belgian lawmakers have made an important exception to the above principle, valid until 30 September 2020. If your staff members have been furloughed due to coronavirus (COVID-19), they will remain enrolled in the insurance plans (supplementary pension/death/hospitalisation/outpatient care/income protection/waiver of premiums) that you have taken out for them, and their covers will remain intact. In addition, the legislation allows you to defer premium payments until 30 September 2020.



What does continuing supplementary pension contributions and maintaining risk covers mean in practical terms?

The supplementary pension plans, healthcare insurance plans (hospitalisation, outpatient care expenses) and occupational incapacity plans (income protection, waiver of premiums) will automatically be continued for furloughed staff members while they are temporarily out of work as a result of the coronavirus crisis. This applies to both full and partial coronavirus-related unemployment.

Under the new legislation, maintaining the guarantees is the default option. So there is no need for you to take any further action. You don't even have to report the temporary unemployment to us.


What about family members who are also enrolled in the corporate-sponsored supplementary healthcare plan?

The legislation on maintaining the covers also applies to family members of furloughed staff members.


As an employer, do you have to apply this solution?

As an employer, you can also opt to suspend the covers during the period of coronavirus-related temporary unemployment, with the exception of death benefit coverage which must be maintained until at least 30 June 2020.

Any suspension of coverage will apply per commitment. If your staff members have their covers via a cafeteria plan, your decision will apply to all of the covers included in that plan. In any event, death benefit coverage will continue until 30 June 2020. Note that the option you select must be the same for the entire group of furloughed staff members. For example, you cannot choose to keep the covers for your Board members and suspend them for ordinary employees.

If you decide to suspend the covers, you must notify us within 30 days of your intention to suspend coverage for staff members that are temporarily unemployed as a result of the coronavirus crisis. If the first coronavirus-related temporary layoff is later, the 30-day period will start to run from the beginning of temporary layoff in your company or organisation. In both cases, we will jointly discuss the terms and procedures with you. We will then stop sending out premium notices, and all covers will be cancelled. 

This means that contributions will no longer be set aside for your staff member's supplementary pension during this period. In addition, s/he cannot make any claims against the policy(ies) you have taken out with AG and will not be entitled to any refunds or other compensation. You will still need to comply with the formalities and all statutory requirements towards your staff member. So be sure to notify your staff members if you suspend coverage.



How can you inform us of your decision?

  • If you opt to continue contributions to a pension plan and to maintain the risk covers, there is no need for you to take any further action. Under the new legislation, continuation and maintenance are the default options until 30 September 2020​. AG extends the corona measures on supplementary pension contributions and risk covers until 31 December 2020. 
  • ​​​If you wish to suspend contributions to a supplementary pension and the risk covers for the period of temporary unemployment, you will need to call your usual AG contact person or e-mail us at corona.ebhc@aginsurance.be within 30 days of receiving this notification.
  • ​​​Already informed us of your intentions? Then no further action is needed from you.

The legislator has provided us the necessary time to embody your choices in a separate document. We will contact you again later in this regard.



Very important: inform your staff members of your decision

Whatever option you select (to continue the covers or suspend them temporarily), make sure you communicate your decision clearly to your staff members as well as the consequences. The law requires you to inform your affiliated employees comprehensively about this matter.​

  • Do you want to continue contributions to a supplementary pension and maintain the risk covers? Then clearly explain what the consequences of this decision are on any individual contributions your staff members may have to make. Also be sure to clarify the conditions for withholding a portion of the staff member's salary and how the deductions will be spread over time.
  • ​​Rather not continue contributions to a supplementary pension or maintain the risk covers during the period of temporary unemployment?  Be sure to inform your staff members and explain the consequences to them (see 'As an employer, do you have to apply this solution?'). Also mention that death benefit coverage will be maintained until 30 June 2020.



Have additional questions about the new legislation and the extraordinary measures?

In that case, please get in touch with your usual AG contact person. Alternatively, you can send your question to our special coronavirus e-mail address: corona.ebhc@aginsurance.be.

On our website, you will also find an extensive coronavirus-related FAQ section.​