Rising absenteeism has become a major HR challenge for companies. Absences, especially short-term ones, add up and generate significant direct costs, but also lasting organisational and human impacts. To be truly efficient, an absence management policy cannot be limited to just administrative monitoring or ad hoc measures; it has to be one part of a structured approach that combines prevention, steering and support.
However, implementing these types of measures requires financial means. In this context, income protection insurance is a lever that is still largely under-exploited. When well-calibrated, it can free up resources that are directly related to absences, providing the financial capacity to take targeted actions: manager support, training, trusted person measures or early case management, in order to maintain contact with the absent employee and facilitate a smooth and enduring return to work, etc. When these tools are already in place, this mechanism can also represent net and direct savings in social security contributions.
Short-term sick leaves represent a significant proportion of total absences in a company. Today, sick leave is funded primarily by the employer in the form of salary protection, which includes full payment of social security contributions.
Income protection insurance, on the other hand, covers sick leave absences after the waiting period, which is generally 30 or 60 days, depending on the company policy.
The principle is based on changing the legal nature of the benefit that is paid:
Income protection insurance is based on changing the legal nature of the benefit paid. Salary protection is replaced by a daily insurance benefit that is based on the net salary, after deduction of social security contributions. The employer no longer pays a salary, but an insurance benefit under the Swiss federal insurance law (LCA) and that is considered an insurance benefit and not a salary. As such, it is not included in the base for social security contributions. This generates savings through exemption from social security contributions.
This mechanism complies fully with Swiss law, is recognised by supervisory authorities and compatible with internal regulations and collective agreements, as long as they are established properly.
From an economic viewpoint, this is not a traditional insurance contract with a fixed and recurring premium. The cost to the organisation consists of:
These costs are proportional to the actual number of absences recorded, with no fixed structural premiums.
This type of approach allows for a perfect match between the measure’s cost and actual absences.
Ideally, implementing income protection insurance should be paired with a tool that accurately identifies short-term absences, something that is necessary for both HR and the insurance mechanism itself. Its deployment requires no specific contractual deadline, and it is backed by proven processes: monthly claims reporting, direct integration in payroll and HR systems, full traceability and no added administrative burden.
Exemption from social security contributions sometimes raises questions about the potential impact on old-age and survivors (AVS) insurance contributions. Available projections are based on scenarios of recurring absences over long periods (e.g., 30 or 60 days of absence per year for an employee, over 10 to 15 years). In extreme cases like this, the estimated impact on future old-age and survivors (AVS) pensions remains marginal, in the range of 0 to 2%, depending on the salary level.
On the other hand, the financial capacity freed by income protection insurance enables the company to structure an efficient absence management policy to reduce absenteeism. When combined with improved support for employees, it can help sustainably improve productivity. In this way, the company moves from a cost to a virtuous circle, reconciling economic performance with social responsibility.
For more information, contact: Elodie Avayou – elodie.avayou@biings.com or Goran Milosevic – gmilosevic@qualibroker.com
= CHF 55,000 in social security contributions saved each year
This saving can be used to finance an absence management mechanism, comprising:
This example includes some of our in-house HR solutions. Contact us for more information.
For a long time, this type of plan was the prerogative of very large groups that had the volumes required to negotiate terms with certain insurance companies. With no innovation, these solutions remained confidential and poorly disseminated.
Today, that situation has changed. Now, new partners are offering redesigned, easy-to-deploy plans with costs proportional to absences and not based on a fixed premium. This makes these solutions fully relevant and accessible to mid-sized businesses. Brokers are responsible for promoting these solutions that, while not new, are now available to more companies. In this context, brokers are key: they exercise active market monitoring, identify relevant developments and alert their clients to enable them to anticipate and adapt their insurance and HR policies.
This plan becomes relevant when there is a significant volume of short-term absences. It is intended primarily for companies having at least 80 employees and with a short-term absence rate of 2 to 3%.
Below these thresholds, especially in small companies, it is more difficult to reach an economic balance, which makes the scheme of limited interest.
At this point, no. At present, no concrete decision or plan aims to change this exemption. The elements raised in the AVS 2030 framework are currently general considerations, with no legislative application. So, current measures rely on a stable legal framework that we are monitoring closely to ensure they comply with the legislation in force at all times.
This article was published in Insurance Inside n°41 - March 2026.
Goran Milosevic - Technical manager Insurance of Persons
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