Health insurers: cap on executives' salaries (cross-border guide)

Context

In brief

• The lower house approves the bill with 157 votes
• 27 against and 8 abstentions on the bill
• The Federal Council proposed a cap equivalent to the seven ministers’ compensation
• The dossier now goes to the Council of States

Key facts

• Subject → amendment of LVAMal
• Proposed cap → compensation no higher than the highest class under the Federal Personnel Act
• Transparency → names, salaries and employment rate of executives
• Vote → 157 in favour, 27 against and 8 abstentions
• Next step → Council of States

The lower house approved the amendment to LVAMal with 157 votes in favour, 27 against and 8 abstentions. The bill provides that health-insurance fund executives receive compensation no higher than that of the highest class established by the Federal Personnel Act.

The text amends LVAMal, identified in the source as the Federal Act on the Supervision of Social Health Insurance. The bill concerns basic health insurance, described in the source as social insurance paid through mandatory premiums. The proposal combines the remuneration limit with a transparency objective: publishing the names, salaries and employment rates of the various executives.

The debate in the chamber

A minority had called for the matter not to be considered. Its arguments were a possible increase in bureaucracy and limited potential savings on healthcare costs. The Federal Council, on the other hand, supported a different benchmark: setting the maximum compensation of executives at that of the seven ministers.

Brigitte Crottaz (PS/VD), speaking on behalf of the majority of the Social Security and Health Committee, defended the bill, arguing that the remuneration of some executives reaches levels that are difficult to explain. According to the member of parliament, transparency should concern not only the amount, but also the identity and employment rate of executives.

Valérie Piller Carrard (FR) added that the salaries of executives at the main insurance groups also increased last year, while premiums continued to rise. Andri Silberschmidt (PLR/ZH) defended the minority and called the bill «homeopathic». In his view, the costs for insured persons attributable to salaries in basic coverage amount to 3 francs per person per year, less than an espresso in Zurich. The Radical Liberal also argued that most of executives’ salaries would be generated through supplementary benefits.

Operational details

Two benchmarks for the same cap

The point requiring the most attention in the parliamentary debate is the benchmark chosen for the cap. The lower house linked the maximum remuneration to the highest class under the Confederation's personnel law; the Federal Council, by contrast, had indicated that of the seven ministers. These are two different criteria, and the source does not provide an amount in francs for either of them. Nor does it indicate the individual salaries of the executives. Readers can therefore compare the political parameters, but cannot derive a new maximum salary expressed in francs from this dossier.

The figure cited in the chamber comes from Andri Silberschmidt's position and concerns the costs for insured persons that end up in salaries for basic coverage. His calculation is 3 francs per person per year, less than an espresso in Zurich. The minority uses it to argue that the potential for savings on healthcare expenses is limited and that most executive remuneration comes from supplementary insurance. The majority, by contrast, insists on levels that are difficult to explain and on the growth in salaries at the major insurance groups despite the increase in premiums.

For those observing the effect on the family budget, the figure can be read alongside costo della vita in Svizzera, but it must not be turned into a general estimate of premiums: the source reports only the calculation attributed to the minority representative.

Transparency beyond the figure

The bill links oversight of remuneration to the publication of three elements: name, salaries and employment rate of the various executives. The discussion, therefore, concerns not only the maximum threshold, but also the possibility of associating each remuneration with the position and employment level indicated in the bill. To follow the issue of health insurers, this distinction avoids confusing the pay cap with the transparency required.

The boundary with supplementary insurance

Mattea Meyer (PS/ZH) had proposed banning “mixed funds,” legal structures in which both basic-insurance policyholders and supplementary-insurance policyholders are handled, in order to prevent a transfer of costs. The amendment was rejected by 129 votes to 63. The proposal by Basel-based Socialist Samira Marti to extend certain provisions to supplementary insurance was rejected in turn by 127 votes to 65. The source therefore records two extensions not accepted by the lower house.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

How to follow the dossier

To follow the dossier without conflating decisions already made, alternatives discussed, and proposals rejected, the reading can be organized into four checks. These are the points that emerge from the debate addressed by the lower chamber.

Four checks to keep separate

1. Subject matter. Read each update, checking that it concerns the amendment to LVAMal and the compensation of health-insurance executives. These are the elements at the center of the adopted text.

2. Parameter. Look for the reference to the highest class under the Federal Personnel Act. If the reference to the seven ministers appears, it instead concerns the approach proposed by the Federal Council.

3. Transparency. Check whether the three indicated elements remain in the bill: name, salaries, and employment rate of the executives. This check must be made separately from the pay limit.

4. Scope. Keep separate the bill on basic coverage, the proposal on «mixed funds» rejected by 129 votes to 63, and the extension to supplementary insurance rejected by 127 votes to 65.

The next step

The institutional sequence indicated by the source is clear: after the lower chamber's decision, the Council of States will have to rule on the dossier. This is the next check to make before considering the rule finalized. The available text does not close the process and does not allow either the pay threshold or the publication of the data to be presented as already operative.

When the next vote takes place, the first information to isolate will be the solution chosen for the limit; the second will concern transparency; the third will be the treatment of supplementary insurance. This sequence avoids attributing to the approved amendment amendments that have already been rejected.

To follow the issue, the guide to health insurers can accompany monitoring without confusing basic coverage with supplementary insurance. For a personal comparison of income, use calcolatore stipendio.

Source: swissinfo.ch