Relapsing illnesses: Slowly progressing disease courses from an insurance law perspective

Diseases with slowly progressing, fluctuating courses, as is typically the case with relapsing illnesses such as multiple sclerosis or schizophrenia, but also with Hodgkin's disease, somatoform pain disorders and chronic mental disorders in general, are not only difficult to grasp medically, they also require special handling from an insurance law perspective. Without early planning, there is a risk of losing social insurance benefits. In this article, we explain the dangers to be aware of and how to proceed at the onset of illness. You will also find a checklist in our downloads that you can use to assess your own situation.

What are flare-ups?

Relapsing illnesses are characterised by their gradual and relapsing course (see e.g. BGer ruling 9C_142/2016 of 09.11.2016 E. 7.1). In the early stages, the disease is still more or less compatible with occupational requirements, which is why those affected often do not yet take any occupational or medical measures. Even when the relapses become more severe and the illness already has a clear impact on professional activities, those affected often try to keep the illness in check and keep it to themselves. In doing so, they push themselves to and often beyond their limits. Once they have reached their limits, they initially reduce their workload or even resign in order to look for a job with less demanding requirements. Those affected also accept financial losses and a deterioration in their insurance situation. The actual reasons for reducing the workload or changing jobs are often not openly communicated to the employer or doctor. As a result, no sick leave is taken or contact is made with the IV. All this only happens when the batteries are completely flat and nothing more works. Only then is the illness communicated to the employer, the registration with the daily sickness allowance insurance is made and later the IV is brought on board. At this point, those affected are already in a job with a lower workload or a lower income. In addition, there is a lack of comprehensive real-time documentation of the gradual progression of the illness and the associated reduction in the ability to work. From an insurance law perspective, this can have serious financial consequences. Some of these will be highlighted here.

Risks in the area of disability insurance

In disability insurance, the level of benefits depends on the degree of disability. In the case of fully employed persons, the degree of disability is determined by comparing the valid income with the disability income (income comparison): The income that you would earn if you were healthy is compared with the income that you can still reasonably be expected to earn with the health impairments. The difference, expressed as a percentage of the valid income, is the degree of disability. The higher the difference, the higher the degree of disability and therefore the higher the IV pension.

In the case of partially employed persons who also perform household tasks in addition to their professional activity, the restrictions in this area, the so-called area of responsibility, are also taken into account. A degree of disability is determined for the area of responsibility and the area of employment (mixed method), weighted proportionately and then added together. Experience shows that the degree of disability in the task area tends to be assessed more restrictively. A person in part-time employment therefore receives a lower degree of disability than if they were working full-time. For this reason, the workload prior to the onset of incapacity for work due to illness plays an important role in determining the degree of disability.

The amount of the invalidity income is also decisive. This is generally determined on the basis of the income from the previous employer. If the income cannot be determined sufficiently, statistical wages, so-called table wages, are used. The table wage is in turn determined on the basis of the last job performed. When determining the degree of disability, the occupational situation, in particular the salary level at the time of the initial incapacity for work, is therefore of great importance.

It becomes problematic when insured persons reorient themselves independently for health reasons, reduce their workload and quit their job in order to accept a job that is better suited to their illness. In most cases, this also means accepting a loss of salary. If they later become unable to work due to illness and register with the disability insurance fund, there is a risk of being categorised as partially gainfully employed or receiving too low an income. In the absence of documentation of the health history, it will be difficult to prove that the occupational reorientation was for health reasons. Disability insurance will assume that you worked part-time for reasons unrelated to your illness or that you voluntarily settled for a lower salary. The lower workload or the lower valid income results in a lower degree of disability and therefore also lower benefits from the IV. As an entitlement to retraining only exists from a degree of disability of approx. 20 per cent, and a pension only from a degree of disability of 40 per cent, there is even a risk of not receiving any benefits from the disability insurance.

Risks in the area of occupational benefits

Anyone who is disabled as defined by the IV is not only entitled to a disability pension from the 1st pillar, but also to a disability pension from the 2nd pillar, the occupational pension scheme. As relapsing-remitting illnesses appear gradually over years and those affected usually change jobs one or more times before the insurance companies become involved, the question arises as to which pension fund must pay the pension. This is decided on the basis of when a reduction in performance capacity of at least 20% has occurred in the previous profession or field of activity. The reduction in performance capacity must be apparent under labour law and the person concerned must be able to prove it. This is because the burden of proof lies with the insured person. Real-time medical certificates or documents from the employment relationship, such as minutes of appraisal interviews, warnings issued and documented or health-related reductions in workload and dismissals, serve as proof. If there are signs that an illness is affecting the ability to work, it is therefore important to seek medical treatment, have the incapacity to work confirmed by a doctor and communicate this to the employer. It is crucial that the health-related reduction in the workload or a reduction in performance determined and documented by the employer is documented. Otherwise, there is a lack of important evidence to prove that incapacity for work occurred while insurance cover was in force. Insured persons who reorient themselves independently for health reasons and change jobs to an activity adapted to their condition without taking appropriate precautions therefore also risk losing their entitlement to an IV pension from the occupational benefit scheme.

The situation is similar in the event of a health-related reduction in the workload without confirmation from the employer or the treating doctor that this is for health reasons. The mere fact that the workload has been reduced is generally not sufficient to prove a relevant incapacity to work during the employment relationship. In addition, a real-time medical certificate or confirmation from the employer confirming a reduction in the workload for health reasons is required. Without real-time documents, it is practically impossible to provide proof of a reduction in workload for health reasons. Subsequent assumptions or a retroactively determined medical-theoretical incapacity to work make it considerably more difficult to provide proof. Here too, the insured person must bear the consequences of the lack of evidence.

If there is no insurance cover when the incapacity for work occurs, which later leads to disability, there can be no entitlement to an IV pension from the occupational benefit scheme for this condition. The same applies if it cannot be proven that the incapacity for work occurred during the period of insurance cover. The situation is only different if, following a change of job, the insured person was able to work again for more than three months at a level of over 80% in an activity adapted to the condition and it can be assumed that the insured person will regain their ability to work on a permanent basis. In this case, the new pension fund is responsible for paying disability benefits. However, it should be noted that when entering into a new pension relationship - as with a (health-related) change of job - benefit restrictions are to be expected. If a health questionnaire had to be completed on joining, the pension fund will attach a health proviso to the pre-existing conditions. If the reserved risk materialises during the reservation period, only the statutory minimum benefits will be paid. When joining a new pension fund, it should also be noted that the scope of insurance cover is based on the level of employment and the insured salary at the time of the onset of incapacity for work. If, for health reasons, a lower level of employment or a less demanding position with a corresponding reduction in salary was chosen for the new job, the insurance benefits in the event of disability will be correspondingly lower. Before changing jobs for health reasons, it is advisable to speak to the doctor treating you to find out whether this is due to excessive demands on your health. If necessary, a sick note should be considered.

Finally, it should be noted that a reduction in salary due to a change of job or a reduction in workload can quickly lead to overcompensation. The pension funds can reduce the disability benefits if, together with other (social) insurance benefits, they exceed 90 per cent of the presumed loss of earnings. This is based on the invalidity income and therefore generally on the income from the last employer. The lower this is, the lower the overcompensation limit and thus the benefits from the occupational benefit scheme.