Michael Meier, Head of after-sales service for private customers, member of the board and the extended group management, Helsana Versicherungen AG, Switzerland

Extract from: "From decentralised to centralized arrears management"

[...] I would briefly like to explain how the health insurance system functions in Switzerland. Health insurance is obligatory in Switzerland. Every citizen must be health insured. Each citizen pays a per capita premium, which differs according to gender, canton of residence or age. The premiums range from 200–300 euros per person.

In Switzerland, every citizen has to be accepted into the obligatory health insurance system. This morning, you listened to presentations about creditworthiness controls and ratings. None of which helps us much, because we have to accept any and every customer.

Private insurance is different, however. We can use rating systems and can decide whom we want to have in the insurance scheme.

The obligatory health insurance scheme covers a basic catalogue of treatments. Additional insurance policies have to be taken out for any insurance over and above this basic catalogue, i.e. for everything that is only covered by private insurance. [...]

 

Arrears management

In 2008, we had to send out nine million bills, 1.5 million reminders and initiate 103,000 debt collection procedures. Debt collection procedures in Switzerland are the same as court default actions in Germany. Last year we were able to recover debts amounting to 156 million Swiss francs. We employ some 120 people in arrears management.

[...] Under health insurance legislation, we are obligated to collect every single debt. We cannot just say we are going to give up in the middle of the process. We are under obligation to chase every single debt right to the end, until we issue the certificate of unpaid debts. And what is very special is that the entire debt keeps adding up. There is no suspension of the debt claim at some point in time. We have to continue to honour the contract right up to the end. Only once the certificate of unpaid debts has been issued are we entitled to suspend benefits. This is why we have to see the entire default action, the entire collection process, through from A–Z.

We have total leeway in respect of the act governing insurance contracts, which applies to additional insurance policies. Here we can proceed just like any other insurance. We can choose what we want to do. We may even just send a reminder. Subsequently, we can suspend benefits immediately. Or we have the option of unilaterally terminating the contract and are under no obligation to provide the customer with renewed insurance cover.

This is the difference between private and obligatory health insurance. In the latter case, if a customer pays his debts after defaulting, the game starts again from the beginning. We are still forced to provide him with insurance cover. [...]

 

This is how it works.

Customers are sent a premium; the invoice is immediately payable. Then they are sent a reminder, followed by a second reminder before the issue is passed over to arrears management, which we call collection service providers. They issue yet another reminder. Court default actions are not initiated until this reminder does not produce the required success. We are very successful with the final reminder, which results in collection of about 30 per cent of all debts. [...]