What you need to know about WIA
With a dangerous cocktail of risks threatening the sustainability of the Dutch Work and Income (Capacity for Work) Act (WIA), private parties cannot stand idly by and watch the system grind to a halt. "The question is not whether there will be a WIA intervention, but who will help shape it."
"Rather, it is about taking responsibility and being at the forefront of shaping solutions. This is in their own as well as the public interest," say Max Kaspers (Whayle) and Marcel van Delft (elipsLife). "The danger is that the situation becomes so badly derailed that anything that eases the pressure is given the green light."
Whayle prepared a WIA forecast for the coming years at elipsLife's request. The two companies are so concerned about the results that they want to share them more widely. They also call for private initiatives to prevent the system from crashing.
Kaspers and Van Delft made their appeal after analysing trends concerning the WIA. Whayle carried it out for elipsLife to gain a clear image of the risks around absenteeism and occupational disability. "We want to keep these risks insurable and also be able to explain to our customers why they are paying a certain contribution," says Van Delft. "Given the complexity, we prefer to be supported by specialists in this area."
Standing idly by and watching things grind to a halt is therefore not an option for us
A WIA analysis is currently so complex because of a multitude of disruptive factors, Kaspers explains. "These combine to form a dangerous cocktail that will significantly increase the risk in the coming years."
Whayle and elipsLife are so concerned about the emerging picture that they feel they should not keep their findings to themselves. "Anyone who operates within a system is partly responsible for it" is how Van Delft describes the collective feeling. "So standing idly by as things go off the rails is not an option for us."
Numerous factors influence risk
The dangerous cocktail that Kaspers and Van Delft refer to consists of a whole range of ingredients. Some of them have been in the picture for some time. For example, the Employee Insurance Agency (UWV) assumes that the WIA inflow will increase annually due to the rising state pension age, growth in the labour force and an increase in the group of employees for whom previously terminated WIA benefits can be restored.
Besides these usual suspects, however, there are other risk factors that are more difficult to assess. Kaspers sums up: "We are also seeing an ever-growing group of workers with mental health issues, including a striking number of young people. The effects of the corona pandemic have been added to this since two years ago. They consist first and foremost of long-term symptoms or a deterioration in already frail health following a Covid-19 infection.
It is so important to limit the period of inactivity as much as possible precisely because the distance between the workplace and the labour market is only increasing
Furthermore, UWV has been forced into taking all sorts of emergency measures for years due to ongoing capacity problems. The sharp increase in the number of WIA assessment requests in recent years is one of the causes. All this translates to an increase in the occupational disability risk."
Existing problems get bigger
Van Delft: "We also see that the pandemic magnifies long-standing problems. For instance, the UWV is currently granting many advances, as the examination backlog has increased further due to the restrictions during the corona lockdowns. And for sick flex workers entitled to sickness benefit, many first-year examinations are given too late or not at all. Not examining people not only means that they and their employers are financially insecure for longer. Above all, there is also a lack of clarity on reintegration and the guidance the sick person should receive. And that is even though it is so important to minimise the period of inactivity. Meanwhile, the distance from the workplace and the labour market is only increasing."
WIA inflow will continue to rise
The large number of uncertainties in is a particular concern of Kaspers and Van Delft. "The inflow into the WIA is already much higher than UWV expected," says Van Delft. "According to an initial UWV analysis, the 11% increase in 2021 (5,700 additional benefits) was more than double the initial expectation. One of the authors let slip at a public appearance that all his old statistics have fallen apart."
The reality is that we are currently leaving very many sick and partially disabled workers to their fate
Whayle and elipsLife, in their own forecast for the next few years (2022-2024), arrive at an overall 13% increase in inflows. Among flex workers, the figure is as high as 17%. These expectations are based on information from public data sources and reports, Kaspers explains. 'Among other things, the realistic assumption is that some 1,000 people with Long Covid will call on the WIA gate in the coming years. But the backlogs in the First-Year Sickness Insurance Assessment for the WIA examination also persist. And the inflow due to mental health complaints continues to grow."
Flex workers are suffering most
When considering these figures and calculations, say Kaspers and Van Delft, we must never forget that they are about flesh-and-blood people. "The reality is that we are currently leaving a lot of sick and partially disabled workers to their fate," says Van Delft. "Especially flex workers, who too often are not given the guidance they are entitled to."
"And that is even though there are plenty of opportunities to give people working prospects," adds Kaspers. "Getting there in time when someone goes off sick is key. But that is precisely what is not happening enough. Take those advances on WIA benefits: since they delay the start of reintegration, they reduce job opportunities. Such a shame!"
An intervention is inevitable
Besides the personal perspective, there is also the social angle. And on that point, Kaspers and Van Delft are adamant that the system is not sustainable with the current development of WIA risks. Kaspers: 'Politicians have so far limited themselves to emergency measures against the capacity shortage at UWV, such as a simplified WIA examination for over-60s. With one crisis following another, it is actually understandable, in a way, that a lot of attention and energy is being focused on other issues. But sooner or later, when it comes case of illness and disability, the tail will start wagging the dog."
We can raise our rates, but that won't solve the problems
Van Delft is also convinced that intervention is ultimately inevitable. He returns to the reasons for elipsLife and Whayle to go public with their forecasts: "The question is not whether there will be a WIA intervention, but who will help shape it. The private sector must take its share of responsibility in this. We can raise our rates, but that won't solve the problems."
Public and private together
Taking responsibility also has the great advantage of putting private parties at the helm in shaping solutions, says Kaspers. This, he says, is in both its own and the public interest. "Private administrators have accumulated a lot of knowledge and expertise in the field of sickness and disability and serve a significant part of the market. And not without success: about half of all large employers have a private solution, and research shows that it is often more effective than public implementation."
Van Delft: "Many problems can be solved if public and private parties pull together and exploit each other's strengths. Take the examination backlog at the UWV. There are good ideas about conducting some of the examinations privately, with public control of quality and independence."
We must guard against ill-considered measures
The most important thing is to avoid a situation where growing problems open the door to ill-considered measures, Kaspers and Van Delft believe. There have certainly been enough of them, Kaspers says. "Take one such idea to reduce the wage payment by one year. Or the idea of reducing employers' financial responsibility for benefits under the Return to Work (Partially Disabled Persons) Regulations (WGA) from 10 to 5 years. The arguments for such interventions are often very one-sided: in this case, the focus was almost entirely on reducing the employer’s burden. Even though we know that financial incentives are extremely effective. The second year of continued payment of wages is an incentive to consider the options of other work or another employer. And those ten years of WGA expenses play a big role in the decision to become self-insured and implement a private solution."
"The great danger is that the situation derails to such an extent that at some point, anything that reduces pressure gets the green light," says Van Delft. "That is what we must all avoid."
This article was written in collaboration with elipsLife and Whayle. Marcel van Delft is Head of Products & Pricing at elipsLife. Max Kaspers is Practice Lead Income and Non-Life at Whayle.