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Serbian Health Insurance Law Amendments Seek To Curb Sick Leave Abuses

Serbian Health Insurance Law Amendments Seek To Curb Sick Leave Abuses

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Legislation proposes to roll back rules to prevent employees misusing leave entitlement.

Serbian employers have faced major issues with staff absenteeism due to sick leave abuses, and the 2019 Health Insurance Law has done little to address the situation.

Under the law, employers are required to disburse statutory sick pay for the first 30 days of an employee’s sick leave, whereupon, on day 31, the National Health Insurance Fund (RFZO) assumes this responsibility. This has meant that sick leave abuses have had a significant impact on companies’ profits, as well as on their ability to effectively manage their business.

The current rules allow general practitioners (GPs) to order to 60 days of sick leave, and any longer periods have to be cleared by a first-instance medical board. The regulation has not only failed to prevent sick leave abuses but has actually promoted employee absenteeism.

The ability of GPs to approve sick leave of as much as 58 continuous days, with medical boards not able to review the decisions, has proven a major drain on the resources of both companies and the RFZO, which seems to have been the primary reason behind the initiative to amend the law.

The Serbian Government’s statement of reasons accompanying the amendments notes the practice of GPs ordering sick leave in contravention of official guidelines linking leave periods to diagnosis, as well as in the absence of appropriate substantiating documents and without the patients undergoing additional diagnostic procedures and specialist examinations. This, the Government suggests, has meant some company employees have wrongfully benefited from sick pay for longer than the statutory 60 days, resulting in financial damage for both employers and the RFZO. The health insurance budget earmarked for this purpose has been steadily increasing to stand at as much as 29.5 billion dinars (slightly more than 250 million euros) in 2023.

The proposed amendments to the Health Insurance Law in effect roll back the rules to what they had been before 2019, when GPs could order a maximum of 30 days of sick leave, with employers being responsible for sick pay for this period. The changes seem designed to reduce costs to the RFZO, but the long-standing sick leave abuse problem may persist, and companies may continue to shoulder the financial burden associated with it.

*Published in the first edition of the Vukovic & Partners Law Firm Western Balkan Newsletter

By Sabina Dautovic, Attorney at Law, Vukovic & Partners