Last updated: Thursday, February 21, 2019


Social Insurance: Two-sided Views

Posted: Thursday, September 27, 2018

Evading social insurance obligations is still common, but solutions to this reality are not effective. Many reasons are given for this reality, but the perception and responsibility of employers is key. They only care about their immediate interests rather than those of their employees. In addition, insufficient instructions for enforcement of new social insurance policies and laws also puzzle businesses.

At the “Workshop on Dialogue and Policy Update of Social Insurance Law 2018” recently held in Nghe An province by VCCI Nghe An Branch in cooperation with the Social Security Department under the Ministry of Labour, Invalids and Social Affairs, Mr Nguyen Duy Cuong, Deputy Director of the Social Security Department, said that over 14 million people hold social insurance, including nearly 14 million holding compulsory social insurance policies and about 250,000 holding voluntary social insurance policies. The insured currently account for less than 30 per cent of the workforce. Realising the goal of insuring 50 per cent of the workforce by 2020 in Resolution 21 of the Politburo is still very challenging. “In order to expand the coverage of social insurance, inclusive and consistent solutions are needed. In particular, current social insurance laws need to be flexibly amended to give the opportunity of getting pension allowances to all people beyond working age,” he said.

Mr Phan Duy Hung, representative of VCCI Nghe An Branch, said that the number of business startups in Nghe An province increases annually, with 1,777 counted in 2017 and a higher number expected for 2018. But, with nearly 14,000 active enterprises, just nearly 240,000 workers were insured as of the end of 2017, accounting for over 13 per cent of the local labour force - a very low rate. After more than two years of enforcing the Law on Social Insurance of 2014, effective on January 1, 2016, despite certain outcomes, it is still difficult for enterprises to adhere to the new law because of changing social insurance regulations and inconsistent regulations that lead to confusing settlement of claims from the insured and employers.

In fact, many enterprises in Nghe An province have trouble paying social insurance to workers. As noted by VCCI Nghe An and responded by business representatives at the workshop, in addition to some unattractive social insurance policies, especially voluntary social insurance, the complexity of enforcing the Law on Social Insurance is also blamed. Keeping a high share of social insurance and other payments for employees is currently a ‘substantial’ burden on enterprises. The downscaling or bankruptcy of not a few companies has also affected regulatory social insurance payment. In recent years, although the number of new companies has risen in Nghe An province, most are small, medium and even micro in scale, and they have low and volatile demand for labourers.

Apart from the disrespect for the law of many employers, authorities are also puzzled with emerging issues. The linkage among stakeholders such as the Provincial Social Security, VCCI and local business associations in social insurance policy communications to employers is not really effective. Mr Le Viet Thuc, Deputy Director of the Nghe An Social Security, acknowledged that while Nghe An Social Security is positively performing its task of special inspection on local violators of social insurance and health insurance in order to prevent and combat abuse and profiteering of social insurance funds, and supervising insured medical services to protect the rights and interests of the insured, social insurance declaration and premium payment for employees, social insurance and health insurance fund management, and insurance policy communications remain weak.

To address these difficulties, in the coming time, the social insurance sector needs to take more initiative and concentrate on carrying out such solutions as coordinating closely with relevant bodies, especially authorities, to strengthen and step up dissemination of and communication on social insurance laws and crimes concerning social insurance and health insurance specified in the Penal Code, to help businesses understand and abide by social insurance and health insurance laws; further accelerate administrative procedure reforms, apply information technology, modernise the social insurance and health insurance management system; and intensify inspections of social insurance and health insurance observance at employers. “VCCI Nghe An will further work with the Nghe An Social Security and related agencies to inform and mobilise enterprises to strictly adhere to insurance laws and raise social responsibility; organise more business and entrepreneur forums or dialogues on social insurance and health insurance policies to timely exchange, inform and resolve emerging issues relating to social insurance, health insurance, unemployment insurance; and report hardships and aspirations of enterprises in carrying out social insurance laws, to timely consider solutions or forward to competent authorities for solution,” said Le Van Thuc.

Duy Hung

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