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Employers can become self-insurers under the Sickness Benefits Act (ZW) — financing sickness benefits for flex workers (sick agency workers, those with end-of-contract illnesses, no-risk policies) themselves instead of through the UWV. Advantage: direct control over reintegration and lower premiums. Disadvantage: financial risk in case of high absenteeism. The ZW self-insurance policy covers part of that risk. For employers with a high level of flex or large fluctuations in their workforce: a relevant consideration.
The short answer
- What: bearing the risk yourself for Sickness Benefits Act payments to flex workers and those suffering from end-of-contract illnesses.
- Alternative: UWV bears the risk (default).
- Advantage: control over reintegration + lower costs with low absenteeism.
- Disadvantage: financial risk in case of high absenteeism.
- Insurance: Sickness Benefit deductible insurance covers part of the risk.
What is the Sickness Benefits Act?
The Sickness Benefits Act (ZW) regulates sickness benefits for:
- Employees whose employment ends during illness.
- Temporary agency workers and flex workers with expired contracts.
- Employee no-risk policy (UWV sickness benefit).
- Unemployment benefit recipients who become ill.
Standard: UWV pays sickness benefit. Employer pays premiums via the UWV system.
What is self-insurance?
Employer chooses to pay sickness benefit themselves instead of through UWV. Responsibilities:
- Benefit for flex worker (70% of wages, max 2 years).
- Reintegration obligations (Gatekeeper also applies here).
- Administration and reporting to the UWV.
Advantages:
- Direct management of reintegration (no UWV intermediary).
- Lower costs with stably low absenteeism.
- Maintain employment during recovery.
Disadvantages:
- High financial risk associated with long-term absenteeism.
- Administrative burden increases.
- UWV fines for non-compliance with the Gatekeeper.
The sickness benefit deductible insurance
Insurance covering the financial risk of self-insurance:
- Reimburses wage costs during sickness benefit.
- Covers reintegration costs.
- Provides assistance with UWV procedures.
Premium: 1-3% of flex-wage bill — depending on industry and deductible.
Who is it suitable for?
- Employers with high flexibility: temporary employment agencies, project-based sector.
- Employers with a stable workforce: permanent employees with low absenteeism.
- Employers with a low differentiated premium: appears to exceed the UWV premium.
Less relevant for SMEs with a small, stable workforce without flex.
Combining with WGA deductible
Similar concept: self-insurance is also possible for WGA (partial disability after 2 years of illness). Often, both are combined: fully bearing the costs of both ZW and WGA oneself; this provides maximum control but also maximum risk.
Honest recommendation
For employers without flex workers: ZW self-insurance is usually not relevant. For employers with substantial flex (agency, project, temporary): calculate the costs involved to determine if it is advantageous. Calculate UWV premium versus self-insurance + insurance + administration. If the outcome is favorable: self-insurance is virtually mandatory to absorb large fluctuations in claims.
For other topics: absenteeism insurance, WGA deductible and insurance for SME companies.
Frequently Asked Questions
The employer chooses to pay sickness benefits to flex workers and employees whose contracts are ending themselves, instead of through the UWV. The default is the UWV; self-insurance is optional, with different financial and operational implications.
Employers with substantial flexibility (temp agencies, project-based work), or a very stable workforce with low absenteeism. Less relevant for SMEs with a small permanent staff without flex workers.
1-3% of the flex wage bill depending on the sector and deductible. Plus administration and reintegration costs not handled through the UWV. Compare with the UWV premium for a financial assessment.
Direct management of reintegration (no UWV intermediary), lower costs with stably low absenteeism, retention of employee employment during recovery, and a better information position regarding absenteeism trends.
High financial risk associated with long-term absenteeism, increased administrative burden, and UWV fines for non-compliance with the Gatekeeper Act. For unstable employers or poor risk management: financially unattractive.
Yes, employers often do both simultaneously. ZW for the first 2 years, WGA for thereafter. Maximum control and a consistent reintegration policy throughout the entire process. Maximum financial risk — insurance is essential.
Registration with UWV before January 1st for effective the following year. Requirement: sufficient solvency to cover the risk. Take out parallel insurance. For a smooth transition: engage an HR advisor or insurance advisor with sickness benefit expertise.
