Incoming Cabinet must tackle insurance

• By Wang Chuan-yu 王傳宇

Amid a surge in COVID-19 cases last year, the Bureau of Labor Insurance announced that all insured people, whether they were hospitalized or receiving homecare services, could apply for labor insurance benefits.

By the end of November, cases of injury and sickness had increased 8.6-fold compared with the whole of 2021, bureau data showed. The number of ordinary and occupational benefit cases last year exceeded 1.36 million, costing NT$4.96 billion (US$165.9 million at the current exchange rate). Compared with the previous year, the expenditure increased NT$1.8 billion.

This has demonstrated how useful and effective labor insurance can be. Insurance coverage provides people with a means to cope with insufficient income as a result of the COVID-19 pandemic. In this sense, it is also a mechanism for group risk control.

However, the financial condition of the nation’s labor insurance system, with its already strained budget, has worsened.

Three major sources contribute to labor insurance revenue: premium income, fund investments and government subsidies. From January to November last year, the premium income reached NT$408.08 billion and expenditures totaled NT$441.86 billion.

The shortfall is obvious. In terms of fund investment, accumulated losses totaled NT$238.2 billion by the end of November, with an earnings rate of minus-4.55 percent, Bureau of Labor Funds data showed. In December, the performance did not improve and a greater loss was expected.

The government has been increasing the amount of labor insurance subsidies every year. This year, a budget of NT$45 billion was allocated, showing that the fund gap is still growing.

Unfortunately, reforming labor insurance has not become a consensus in society. To avoid a financial crisis at the bureau, the nation must deal with several problems at a practical level.

For example, since pensions are to be paid based on the average value of the insurance in a 60-month period, many people raise their insured salary five years before their retirement.

In addition, some professional trade unions conduct “titular insurance,” while some corporations fail to enroll their employees in labor insurance. It is no surprise that the bureau has been facing financial problems.

Solving these problems would be more feasible than initiating a wide-ranging and direct reform. Moreover, if the government was to cope with these practical issues first, they would be less likely to create social conflicts.

For years, many have called for reforming the labor insurance system. The solution is almost always as follows: “Pay more, receive less and retire at a later age.”

Considerable changes would have to be made if people want to establish a more effective labor insurance system.

However, the political climate is unfriendly to such a proposal, given that the reform would require careful planning and it might take years for the public to see its results.

It is difficult to convince voters to support long-term reform, and as long as the voters are not interested, politicians would not consider the reform worth promoting.

After its losses in the nine-in-one elections in November last year, the Democratic Progressive Party should have known that the public wants change.

Now, a new Cabinet has been formed. Will labor insurance reform be listed on its agenda? Or will it be left to the next administrative team, again?

Wang Chuan-yu is a customer service staff member at the Bureau of Labor Insurance.

Translated by Yi-hung Liu