Harmonisation and coordination principles for social insurance in the European Union and lessons for China

Eloise O'Riordan – Research Associate, IBM Cúram Research Institute

…..but my Mandarin is too bad!

今天我想讲普通话… ..

European Union founded to promote peace & equality • Economic and political partnership – 28 European countries – 500

million inhabitants• Overall aim: promote peace; the values of human rights; equality; the

rule of law; and the well-being of its people• Mission is to bring countries together to pursue shared interests and

values• Purely economic focus has evolved into EU competence in other policy

areas including social policy• European social security developed using two different techniques:

Coordination and Harmonisation

European Union = “United in Diversity”

Coordination of Social Security – enabling free movement of labour

• Coordinates national social security systems to protect the security of migrating people

• Does not replace national systems with a single European one but guarantees rights in the area of:

– Sickness insurance– Pensions– Unemployment– Family benefits

• Each country is free to determine its own social security system• Benefits anyone who moves to another EU country to settle permanently, work

temporarily, study, or to take a holiday

Protects people’s social security rights when they go to work in another country

The four main principles of Coordination

1. Extension of coverage: You are covered by the legislation of one country at a time so you only pay contributions in one country.

2. Equal treatment or non-discrimination: You have the same rights and obligations as the nationals of the country where you are covered.

3. Aggregation of periods: When you claim a benefit, your previous periods of insurance, work or residence in other countries are taken into account if necessary.

4. Exportability: If you are entitled to a cash benefit from one country, you may generally receive it even if you are living in a different country.

The need for Coordination

If the regulations did not exist, Paul, according to national law alone, wouldnot be entitled to invalidity benefits in either of these states despite having been covered for a total of 13 years.

Paul is a migrant worker who became an invalid after having been covered for 4 years in a member state where an insurance period of at least 5 years is required for entitlement to invalidity benefits and then for 9 years in a member state where 10 years of insurance are required.

Harmonisation

• In extreme situations, harmonisation could lead to the unification of national law• In less drastic forms harmonisation can be used for the setting of minimum

standards • Harmonisation far less developed than the international law of coordination• The norms that exist result not from bilateral treaties, but from the work of

international organizations – the ILO has helped the development of social security at a national level, by setting minimum standards

One goal: the promotion of the idea of compulsory social insurance and its extension to as many groups of wage-earners as possible

Definition of Harmonisation:Direct intervention into the national social security law of Member

States by making states adjust their national laws to conform to the harmonisation regulations with the goal of streamlining systems

Enabling Coordination – EURES – The European Job Mobility Portal

• EURES (EURopean Employment Services) and its network helps workers search for a job across European borders, having in its database more than: – 1 million job vacancies in Europe– 760,000 CVs – 25,000 registered employers

• The main objectives of EURES are the following:– To provide advice and guidance to employees on work opportunities, working

and living conditions in Europe (EU/EEA/Switzerland)– To offer assistance to employers to attract workforce– To advise employers and workers in border regions

EURES promotes mobility in the labor market

Enabling Coordination – Electronic Exchange of Social Security Information (EESSI)

• EESSI is a set of standards that will help social security bodies across the EU exchange information more rapidly and securely

• At the moment there is no EU-wide system and most exchanges are still paper-based

• All communication between national bodies on cross-border social security files will take place using structured electronic documents

• Benefits include: – For the public:

• Faster management of claims• Faster calculation and payment of benefits

– For public administrations:• Standardized flows of information• Better multilingual communication thanks to common structured documents• Optimized verification and collection of data

Enabling Coordination – European Health Insurance Card

• A free card that gives you access to medically necessary, state-provided healthcare during a temporary stay in any of the 28 EU countries, Iceland, Lichtenstein, Norway and Switzerland

• Given under the same conditions and at the same cost (free in some countries) as people insured in that country

• 187 million (37%) Europeans currently hold a European Health Insurance Card

Some lessons to draw from the EU approach

1. Social cohesion and economic development can be brought about through applying coordination and harmonisation measures

2. Coordination can bring together diverse and separated systems 3. Information Technology is required to make coordination efficient4. Economic development can be facilitated by enabling labour

mobility5. Harmonisation provides consistency of basic coverage & minimum

standards that works towards poverty alleviation 6. Coordination and harmonisation are complex measures, achieved

over time, the degree and pace of which is a key decision

谢谢