SOCIAL SECURITY Both employer and employee contribute to different security funds, which provides the following benefits: Health Care, Old age, Widow s and Orphan s Benefit. There is also a social security plan for Wage Compensation and Industrial Accidents for which only the employer pays a contribution. Recently the Government has integrated the various health care schemes into one general health insurance fund called AZV (Algemene Ziektekosten Verzekering). AZV provides health care coverage for the entire population. GENERAL HEALTH INSURANCE REGULATION (AZV) The AZV is the obligatory General Health Insurance of Aruba. It is regulated in an ordinance adopted in 1992, which became effective as of January 1, 2001. It describes among other who is insured by the AZV, which medical expenses are covered and the premium that must be contributed by everyone. The AZV is a comprehensive health insurance program with minimal restrictions on access to health care services. It s an innovative and progressive healthcare program. The AZV was designed to integrate the financing of healthcare with management of medical care services and assurance of the quality of medical care provided to individuals. The health insurance plan incorporates a broad network of practitioners for the containment of costs and the utilization of services. The Administrative Body of the AZV According to the AZV-law an independent body must manage the General Health Insurance, i.e. the Administrative Body of the AZV. The governance structure and operation of the AZV incorporates representation from the various economic sectors on the island, i.e. employers, employee organizations, professionals and the government. These representatives appoint a director and a management team for the Administrative Body, who is responsible for carrying out the plans of the Board and to take care of the daily management of the AZV. The Administrative Body is a social and public insurer who together with others is in charge of providing medical and healthcare that is accessible to anyone, affordable and of good quality. It is furthermore responsible for the registration of the insured, the administration and control of the medical and healthcare providers billing claims and the making of payments. The involvement of the representatives of the different economic sectors of the Aruban society contributes to broad support and commitment to the long-term success of the AZV. Registration with the AZV According to the AZV law, everyone who is registered at the Civil Registry is by law insurable by the AZV, and required to contribute in the AZV insurance premium if they enjoy an income on which they pay income tax or the AOV/AWW premiums. However, in order to make use of the AZV medical and healthcare benefits, a person still has to register at the office of the Administrative Body. Once registered the insured will receive a certificate of registration as proof of registration with the AZV. 68
With this certificate the insured will be able to receive medical and healthcare benefits at the expense of the AZV. To be eligible for registration with the AZV, a person has to: be registered as a resident in the Civil Registry or; if he/she is not registered in the Civil Registry, that person must proof that he/she pays income tax or the obligatory social premiums. Submitting the most recent payslip(s) or a statement from the employer can achieve this. Not insured with the AZV are: individuals and their family members, whom as residents, are exempt from participation in the social insurances on the grounds of international agreements to which Aruba is a contracting party; individuals and their family members, whom as residents, are employed elsewhere with a legal entity established elsewhere in the Kingdom and enjoy an income thereof; those whose freedom has been lawfully taken away. In some cases it is possible that someone is registered in the Civil Registry, but already has a medical insurance abroad. In that case one can ask the Administrative Body for an exemption whereby the following applies: the person has a similar health insurance abroad with a similar coverage as the AZV and; this health insurance is based on a legislation. The AZV Premium Everyone with a taxable income has to pay the AZV premium. The AZV premium is 7.5% of the fiscal income, of which the employee has to pay a maximum of 1% of the total premium and the employer has to pay at least 6.5% of the total premium for each employee. The maximum amount of premium that can be paid is at the moment AFL. 3697, - per individual. The fiscal income includes all kinds of income, from part-time work to income derived from rent and self-employment. There are no different premiums for the different employment sectors, positions or education levels. However there is a sliding scale for low-income retirees and those without an employer or whom are selfemployed. (See: Table 12 below) Each month, the employer, will withhold the employee s percentage from his salary. Payment of the AZV premium to the Tax Collector takes place together with that month s income tax and AOV/AWW premiums (AOV= Old age Insurance, AWW= Widow and Orphans Insurance), whereby one and the same form is used. Payment has to occur no later than the 15 th of each following month. The Government contributes also substantially to the funds of the AZV. (See: Table 14) 69
Table 14: The main Financial Contributors Total expenses AZV (AFL.) Share of total expenses (%) Fiscal contribution of the Government 126,000,000 55.51% Premiums 101,000,000 44.49% Total Expenses AZV 227,000,000 Source: Administrative Body AZV The Benefits of the AZV The benefits of the General Health Insurance for AZV insured comprise comprehensive medical and pharmaceutical insurance, with a limited range of dental services. As an AZV insured an individual has access to various forms of medical care with no additional payment. Only for a limited number of provisions or treatments will the insured have to pay the medical/healthcare provider or institution an out of pocket contribution. Some provisions are only covered by the AZV if the Administrative Body has given its prior approval for the treatment. The provisions that are covered by the AZV are: Family doctor: the insured is free to choose his/her own family doctor. Medical specialist: for this provision the family doctor needs to give a referral and in some cases the Administrative Body has to give its prior approval. Physical therapist: the family physician needs to give a referral and the Administrative Body has to give its prior approval. Dentist: For insured 13 years and older the dental coverage is limited and includes only: pain relief by means of the pulling of teeth or molars and the necessary abscess incisions, surgical care and dentures. Prior permission is required for surgical care and dentures. In case of a complete set of dentures, a contribution of AFL. 200, - per jaw is applicable, and in case of a partial set of dentures, a contribution of AFL. 100, - per jaw. The dental coverage for insured up to age 13 includes almost all-dental care. It is only covered by the AZV once the insured has received a dental record card. The dentist will give this card only after the teeth of the insured have been examined and declared in order. The cost of this examination is for the insurer s own account. The dental care for the insured up to 13 years old includes: an annual examination, an annual preventive maintenance treatment, the filling of teeth and molars, the application of fluoride once a year, the sealing of permanent molars. Surgical dental care and orthodontic care with the exception of bridges and crowns are also covered. For orthodontic care a contribution of AFL. 75, - per month of treatment is applicable and the insured also has to receive prior approval from the Administrative Body. In case of a filling a contribution of AFL. 15, - is applicable per filling. 70
Obstetrician: the insured has the option to choose who shall guide the pregnancy, the obstetrician or the family physician. Either the obstetrician or the family doctor can do a referral to a gynecologist and then only in case if it is considered a medical necessity. The supervision of the delivery by an obstetrician does not require prior approval by the Administrative Body. Hospitalization: the AZV covers all expenses of hospitalization, including treatment in the third class. If the insured wants to be in a higher class, he/she will have to pay the difference him/herself or has to take out a supplemental insurance. Hospitalization always requires prior approval from the Administrative Body, usually permission is requested by the treating physician through the hospital. In case of an emergency however, the insured can be admitted without prior approval from the Administrative Body. In that case permission for hospitalization still has to be requested from the Administrative Body within 4 days of admission. Medical treatment abroad: permission for medical treatment abroad is covered by the AZV only if the Administrative Body has given prior approval for the treatment concerned. The treating medical specialist applies for approval on behalf of the insured, by submitting a request to the Medical Commission of the AZV. This Commission advises the Administrative Body on the medical necessity. When handling the request the Commission determines whether the treatment is a medical necessity, whether the treatment is part of the care covered by the AZV, and whether it cannot be done (adequately) in Aruba. In case of an emergency, the Administrative Body can decide within moments. Medical costs made abroad without prior approval from the Administrative Body will not be covered by the AZV. If an insured decides to go abroad at his own initiative, either for vacation or business, any medical costs made abroad are at his/her own expense, and as such will not be covered by the AZV. The AZV has made various agreements with hospitals abroad, in Miami and Houston in the United States, the Netherlands, Curacao, Venezuela and Colombia. All the hospitals were chosen based on the quality of the medical care offered and the costs thereof. There is no maximum to the amount of medical cost that is covered by the AZV for medical treatment abroad as long as the request for medical treatment abroad has been approved by the AZV. Which hospital the patient is referred to depends on the desired treatment. When sending an insured abroad for medical treatment not available in Aruba, if possible the Administrative Body will take the preference of the patient into consideration as much as possible. Sometimes the patient requires medical supervision during the flight abroad. If that is the case, it will be arranged by the AZV. Even when medical supervision is not required, the AZV will generally allow the patient to be accompanied during a (lengthy) stay abroad. The following will be covered when an insured goes abroad for medical treatment with the permission of the AZV: The cost of the tickets for the patient and the companion; generally the tickets are arranged by the AZV. The costs of admission and treatment of the patient. 71
Hotel expenses for the companion and if necessary for the patient. A fixed amount of day-to-day allowance to cover the necessary travel and accommodation expenses for the companion (and the patient if necessary), such as meals, transportation, and clothes. In most of the countries to which patients are referred, the AZV has made arrangements with an organization abroad to guide the insured while abroad and who can help with the giving of information. These organizations are in constant contact with the AZV and can pass along any questions the insured may have during their stay. Medicines: the AZV employs a positive list of medicines that contains most of the medicines that are covered. Most of the medicines that are prescribed by a physician or medical specialist are delivered by the pharmacy and are covered by the AZV. For a number of these, the treating physician or medical specialist needs to request a written authorization from the Administrative Body on behalf of the patient. The medical or pharmaceutical advisors then decide (together with the physician) if the prescribed medicines will be covered and therefore delivered by the pharmacy. The patient will then receive an authorization form on which is mentioned the quantity to be delivered by the pharmacy over a given period of time. Almost all the medication that can be bought without a prescription, the self care medicines, are generally not covered, with the exception of those medicines that are also mentioned on the positive list. If medically necessary the doctor will prescribe one or more of the medicines required for treatment. The pharmacist usually will give medicines for a period of 30 days or less. For chronic illnesses such as diabetes and asthma, the insured is given medicines for a maximum of 3 months. Birth control pills are given for a maximum of 6 months. Antibiotics and chemotherapeutics are given for no more than 15 days. Dietetic preparations such as Ensure, are covered if certain criteria are met and with prior approval from the Administrative Body. Bandages are covered only in case of a serious injury or disease and where long-term aftercare is necessary. The wound care of simple injuries or bandages for short-term injuries such as sutured wounds, scrapes and ankle sprains are not covered. With the certificate of registration of the AZV, the insured can pick up the prescriptions at his/her pharmacy of choice. Auxiliary medical devices: the distinction is made between: Medical devices that can be obtained as property, such as arm- and leg prosthesis, breast prosthesis, visuals and hearing aids, and syringes and; Medical devices that are exclusively given on loan, such as wheel chairs and resuscitators. To purchase, alter, repair or replace medical devises the insured requires prior approval from the Administrative Body. In some cases, such as orthopedic shoes or elastic support stockings, the insured has to pay a contribution. In case the medical device has been given on loan, the insured can be asked for a deposit. 72
Provisions that are not covered by the AZV are for instance: Class insurance for the hospital, glasses (covered only from a strength of ± 10), dental care for adults (only limited coverage), and care abroad while on vacation. General physicals, such as a physical for a driver s license, a job related physical, a physical to obtain a work and resident permit, and a general medical exam. The cost of a medical specialist if the referral is not deemed necessary by the family physician and he has not given a referral. Over the counter medicines and those that do not require a prescription from the family physician. The cost of laboratory tests that do not appear on the AZV laboratory form. A few forms of medical specialist treatments: in-vitro fertilization, the reversal of a voluntary sterilization and all organ transplants other than kidney and bone marrow transplants. The AZV does not offer supplemental insurance of any kind. For those provisions that the AZV doesn t cover the insured can take out a supplemental insurance with a private insurance company. There are at the moment several private insurance companies that sell both individual or group supplemental insurance. SOURCE: Uitvoeringsorgaan AZV Frankrijkstraat 7, Eagle Phone: 297 820228 Fax: 297 830977 E-mail: uoazv@setarnet.aw Website: azvaruba.com WAGE COMPENSATION INSURANCE REGULATION The employer must insure each employee earning up to an annual maximum of AFL 42.296.00 (as per January 1, 2001) for wage compensation due to illness. The contribution for this insurance is 4% of the employee's salary and is paid fully by the employer. The monthly premium has to be transferred by the employer before the 15 th of the following month to the Social Security Bank. ACCIDENT INSURANCE REGULATION Regardless of income, the employer for must insure each employee for on-the-job accidents. The premium is not fixed, but varies, depending on the risk from industry to industry. 73
The premium is calculated on the basis of the worker s salary. Employers pay between 0,25% and 2,50% of the employee's salary up to a maximum annual income of AFL 49,296.00. (US$ 27,539.66) The monthly premium has to be transferred by the employer before the 15 th of the following month to the Social Security Bank. OLD AGE AND WIDOW/ORPHANS INSURANCE REGULATION At the age of 60, every citizen is entitled to an Old Age Pension. The Old Age Pension amount depends on the years the person was insured. The premium for the Old Age Pension, Widows and Orphans Pension is 13,5% of the annual income, of which the employee has to pay 4% and the employer 9,5%. In case of a self-employed, the premium is 13.5%. The maximum annual premium amounts to AFL 6,655.00. (See: Table 15) Table 15: Summary of Premiums 2002 AZV AOV/AWW Threshold for social AFL 49.296 49.296 security contributions Maximum premium 7,5% 3.697 13,5% 6.655 Employer s contribution 6,5% 3.204 9,5% 4.683 Employee s contribution 1% 493 4% 1.972 Source: Inspectie der Belastingen SOURCE: Sociale Verzekeringsbank L.G. Smith Boulevard z/n Phone: 297 872785 Fax: 297 875532. 74