As an employer in the Netherlands you can choose to become a self-insurer (Activiteitenbesluit eigenrisicodrager, ERD), or own-risk carrier. If your employee falls ill or faces disability issues, you will have to pay the benefits and the costs of reintegration yourself, instead of the Employee Insurance Agency (Activiteitenbesluit Uitvoeringsinstituut Werknemersverzekeringen, UWV). Read more on your options here.
Employees are compulsory insured for sickness and disability. You pay the premiums for these employee insurances to the Dutch Tax and Customs Adminstration (Activiteitenbesluit Belastingdienst). If you choose to become a self-insurer you pay less in premiums. If an employee falls ill or faces disability issues you bear the risk: you need to pay the benefits yourself.
You can become a self-insurer for:
- the Sickness Benefits Act (ZW)
- the Return to Work of Partially Disabled Persons Scheme (WGA, part of the WIA Capacity for Work Act)
You can determine if being a self-insurer is useful for you by comparing the extra costs (for instance for an absenteeism policy and extra health and safety services) with the premiums and risks of illness and disability in your sector.
Self-insurer in case of illness
If your employee falls ill, you have to pay the first 2 years of wages (this is called the continued payment of wages obligation, in Dutch). In some instances (in Dutch) you can apply for benefit through the Sickness Benefit Act. Then UWV pays this benefit. If you are a self-insurer for the Sickness Benefit Act you pay these benefits yourself. You can become a self-insurer for employees who:
- do not have a 'regular' employment contract such as homeworkers and interns
- worked for you (and were insured) and became sick within 4 weeks after leaving employment
- were employed on a temporary contract that ends during their illness
You can find more information on your duties and responsibilities as a self-insurer on UWV’s website (in Dutch). Among others these imply that you pay the benefits and that you provide absenteeism and reintegration support.
If you are a self-insurer for the Sickness Benefits Act (ZW) you pay a lower premium. You pay the basic premium plus the Return-to-Work fund (Activiteitenbesluit Werkhervattingskas, Whk) without the part for flexible workers (Activiteitenbesluit ZW-Flex). You can calculate your premium (in Dutch) on UWV’s website.
Please note: continuing payment of a sick employee's wages for 2 years does not mean you are a self-insurer for ZW. This obligation applies to all employers.
Self-insurer for the Return to Work of Partially Disabled Persons Scheme (WGA)
Is your employee ill for more than 2 years? Then they can apply for a WIA-benefit under the Work and Income Act (Capacity for Work Act, Activiteitenbesluit Wet werk en inkomen naar arbeidsvermogen, WIA, in Dutch). If they are partially incapacitated for work, they are eligible for a WGA-benefit (in Dutch).
You can choose to become a self-insurer for the WGA (in Dutch) for employees with a permanent contract who are partially disabled for work and are eligible for the WGA. You then pay the benefit yourself, instead of UWV. UWV has a Dutch-language checklist to help you decide.
You can read more on your duties and responsibilities (in Dutch) on UWV’s website. Among others these imply that next to the benefit itself, you pay the costs of reintegration and you supply support for the reintegration process.
If you are a self-insurer for the Return to Work of Partially Disabled Persons Scheme (WGA) you pay a lower premium. You pay the basic premium plus the Work resumption account (Activiteitenbesluit Werkhervattingskas, Whk) without the WGA premium. You can calculate your premium (in Dutch) on UWV’s website .
How to apply to become a self-insurer?
You apply to the Dutch Tax and Customs Administration if you want to become a self-insurer for the Sickness Benefits Act (in Dutch) or for the Return to Work of Partially Disabled Persons Scheme (WGA, in Dutch). Note that if you apply for one of these options this does not mean you are automatically a self-insurer for the other.
You can have the self-insurer commitment start on 1 January or on 1 July. Your application must have been received 13 weeks before these dates at the latest (therefore, before 2 October or before 1 April).
If you are a starting entrepreneur you can become a self-insurer from the moment you become an employer.
You can choose to bear the financial risk entirely on your own, or take out full or partial insurance with a private insurer. These insurers often also support in the reintegration process. The Dutch Association of Insurers offers an overview of insurers (in Dutch).
You can read more on being a self-insurer in English on the Tax Administration’s website but please note that the information is tailored to those not established in the Netherlands, so there may differences to your situation.