Introduction of partial sickness allowance

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

The possibility to get partial sickness allowance was introduced in Finland from the beginning of 2007. The purpose of the partial sickness allowance is to support the return of an employed person to working life after a relatively long period of incapacity for work. However, the start has been rather slow and considerable less people have used the system in the first half of 2007 than had been estimated beforehand.

Purpose of health policy or idea

Purpose of the partial sickness allowance is to support the return of an employed person to working life after a relatively long period of incapacity for work. The payment of partial sickness allowance requires that an employee has previously been working fulltime, the employee has been in normal sickness allowance for at least 60 consecutive working days, the working time of this fulltime-employed person will be reduced temporarily to 40-60 percent of the working time and that the employee's wages are cut correspondingly. Both employee and employer have to approve the arrangement. Partial sickness allowance paid by the Social Insurance Institution is always half of the normal sickness allowance and it can be granted for a maximum of 72 working days in two year period. The definition of incapability to work ws not changed by the reform, so a person must meet the same eligibility criteria as required to get full sickness allowance.

Sickness allowances are paid by the statutory National Health Insurance (NHI) scheme. The scheme is run by the Social Insurance Institution (SII, Finnish acronym KELA), with about 260 local offices all over the country. SII falls under the authority of parliament. Funding for NHI comes from the state budget (28 % in 2006), insured (33 %) and employees (38 %). NHI covers also part of outpatient drug costs, part of medical costs of private sector, part of the costs of occupational health care, compensation of travel costs to health care units and maternity leave allowances.

Employees can apply for part-time sickness allowance with the Social Insurance Institution. Applications must include among other things a medical evaluation by a physician testifying on the applicants working capacity. In the case of a self-employed person, partial daily allowance could be paid if the applicant can present a reliable account of a comparable reduction in working time and earnings.

Main points

Main objectives

The objective of the partial sickness allowance is to support the return of an employed person to working life after a relatively long period of incapacity for work.

Type of incentives

Possibility to receive partial sickness allowance from the National Health Insurance

Groups affected

Employees, Employers, Social Insurance Institution

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

The reform is rather innovative, but implementation has been rather slow and public visibility low. The reform did not raise any major controversies. Employer and employee organisations had already approved of the reform before the bill was passed to parliament.

Political and economic background

The Ministry of Social Affairs and Health set up a working group in 2003 to examine the possibilities to creating a system of partial daily allowance or partial rehabilitation allowance within the system of sickness allowance. The working group consisted of members from the Ministry of Social Affairs and Health, the Ministry of Labour, the Ministry of Finance, the Social Insurance Institution, labour unions and the Finnish industry. The working group produced a final report in June 2004. Based on this report the government passed the bill to parliament in December 2005.

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

Before the working group was set up in 2003, this idea was for example brought up in parliament and in the Social Insurance Institution. Partial sickness allowance has been used for some time in other Scandinavian countries (Sweden, Denmark and Norway).

Initiators of idea/main actors

• Government

• Parliament

• Patients, Consumers

• Others

Approach of idea

The approach of the idea is described as:
new:

Stakeholder positions

The reform did not raise any major controversies and was not opposed by any group. Both employee and employer organisations were represented in the working group set up by the Ministry of Social Affairs and Health and they had already approved of the reform before the bill was passed to parliament.

Actors and positions

Government
The Ministry of Social Affairs and Health	very supportive		strongly opposed
Parliament
The Parliament	very supportive		strongly opposed
The Social Insurance Institution	very supportive		strongly opposed
Patients, Consumers
Employees	very supportive		strongly opposed
Others
Employers	very supportive		strongly opposed

Influences in policy making and legislation

Parliament accepted the legislation reform with only minor changes in April 2006. The main concern presented in parliament was that the requirement of having been in full sickness allowance for 60 consecutive working days before having the possibility to enter partial sickness allowance is in some cases too long. Already before the reform, after 60 days a patient needed a more extensive physician examination to evaluate his current capacity to work and check which rehabilitative measures are appropriate. Some members of parliament believed that in order to avoid chronification of an incapacity to work, 60 days might be a too long period of time to start reintegrating a patient into worklife. However, the majority finally decided to keep this time limit.

Legislative outcome

success

Actors and influence

Government
The Ministry of Social Affairs and Health	very strong		none
Parliament
The Parliament	very strong		none
The Social Insurance Institution	very strong		none
Patients, Consumers
Employees	very strong		none
Others
Employers	very strong		none

Positions and Influences at a glance

Adoption and implementation

Employees and employers are the key actors in the implementation. They were also actively participating in the preparation of the legislative proposal. The success of the reform depends on that both employer and employee view partial sickness leave as a reasonable option, also financially.

Monitoring and evaluation

The Social Insurance Institution will regularly monitor the use of partial sickness allowance.

Review mechanisms

Mid-term review or evaluation

Dimensions of evaluation

Outcome

Results of evaluation

In the first half of 2007 only about 1 000 persons received partial sickness allowance. It was estimated before the reform that the system would be used by 9 000 persons in the first year. For the majority of them allowance was granted due to mental health problems (38 %) or musculoskeletal diseases (35 %). Mental health problems were a more common reason to receive partial sickness allowances than to receive normal sickness allowances during the same period. The largest occupational group receiving partial sickness allowance were employees in the social and health care sector (27 %, while of normal sickness allowances this group comprises 19 %). The majority of persons receiving partial sickness allowance were women (70 %).

Expected outcome

The implementation of the partial sickness allowance has been rather slow and considerable less people have used it than it had been estimated. It is possible that the system must be altered somewhat if some specific obstacles can be identified which prevent the use of the system. One potential obstacle is poor awareness of the partial sickness allowance among employees, employers and health care professionals.

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

The reform has marginal impact on health care services.

References

Sources of Information

Working Group Memorandum of the Ministry of Social Affairs and Health 2004:8 http://www.stm.fi/Resource.phx/publishing/documents/1964/summary_en.htx

Author/s and/or contributors to this survey

Lauri Vuorenkoski

Suggested citation for this online article

Lauri Vuorenkoski. "Introduction of partial sickness allowance". Health Policy Monitor, October 2007. Available at http://www.hpm.org/survey/fi/a10/3