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MOEL announces institutional reforms that expand protection for industrial accident victims and ease burden on small business owners

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Dec. 28, 2017

 

The Ministry of Employment and Labor (MOEL, Minister Kim Young-joo) has announced institutional reforms, including the 2018 IACI premium rates, revised criteria for recognition of chronic fatigue syndrome as work-related disease covered by IACI and revised criteria for calculation of IACI medical care benefits, which would strengthen protection for workers injured in industrial accidents and ease the burden of insurance premiums on employers.

 

*Pre-announcement of the related amendments (MOEL public notifications): Dec. 19~26, 2017, date of announcement: Dec. 29, 2017, date of enforcement: Jan. 2018~

 

The main contents of the amendments are as follows.

 

<1> 2018 IACI premium rates by type of business

 

The average IACI premium rate for all industries will be 1.80% in 2018.

 

From January 1st, 2018, accidents which occur while a worker is commuting to or from work via his/her ordinary routes or means will be covered by Industrial Accident Compensation Insurance (IACI). Considering that the insurance premium rate for commuting accidents (0.15%) is added, the general IACI premium rate  will be lowered by 0.05%p to 1.65% in 2018, compared with the previous year's rate of 1.70%.

 

In order to narrow the difference in IACI premium rates between industries, the total number of business types will be reduced by six to 45, compared with 51 in 2017, by integrating or abolishing similar business categories.

 

* Number of industries: 58 in 2016 → 51 in 2017 → 45 in 2018.

 

The maximum difference* between the premium rate for a particular industry  and the average premium rate will also be reduced to a factor of 17, compared with a factor of 19 in 2017.

 

* a factor of 20 in 2016→a factor of 19 in 2017→a factor of 17 in 2018 (coal mining and quarrying)

 

Meanwhile, a reformed merit rating system* will be applied starting in 2019 as a result of the amendment to the Enforcement Decree of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance which was approved at a cabinet meeting on December 19th.

 

*(Current system)±20% for workplaces with 10~29 employees, ±30% for workplaces with 30~149 employees, ±40% for workplaces with 150~999 employees and ±50% for workplaces with 1,000 employees or more

 

(Reformed system)±20% for workplaces with 30 employees or more

 

※Merit rating system: a system that allows individual workplaces' IACI premiums to be decreased or increased based on the incidence of industrial accidents over the past three years

 

As a consequence, the amount of premium discounts given to large companies is expected to decline, which would create additional downward pressure on the general premium rate, thereby further reducing the burden of IACI premiums on small workplaces.

 

*(Currently) amount of discounts given to all workplaces: 1.5576 trillion won, amount of discounts given to workplaces with 1,000 employees or more: 728.2 billion won (46.8%)

 

(After reform) amount of discounts given to all workplaces: 623.8 billion won, amount of discounts given to workplaces with 1,000 employees or more: 260.8 billion won (41.8%)

 

Moreover, a reformed benefit collection system* will be implemented from January 1st, 2018. It is expected to ease the burden on small business owners and reduce the current benefit collection system's side effects, such as business shutdown and concealment of industrial accidents.

 

*(Current system)There is no upper limit on the amount that can be collected (About 26 times the annual insurance premiums was collected in 2015.) (Reformed system) An upper limit will be imposed on the amount that can be collected (less than five times the insurance premiums that should have been paid).

 

※Benefit collection system:If an industrial accident occurs in a workplace which neglects to sign up for IACI coverage or to pay IACI premiums, part of the insurance benefits paid is collected from the employer.

 

<2> Broader criteria for recognition of chronic fatigue syndrome as work-related disease

 

The current criteria for recognition of chronic fatigue syndrome as work-related disease stipulate that if the number of hours worked over the 12 weeks prior to the development of chronic fatigue syndrome exceeds an average of 60 hours per week (64 hours per week on average over a four-week period), the disease is considered strongly related to work.

 

Even in cases where the number of hours worked does not exceed 60 hours, the longer the working time is, the more the chronic fatigue is work-related, and night or shift work, etc., may add to the worker's physical and mental strain. So it is required that all these factors should be comprehensively considered when judging the work-relatedness of chronic fatigue.

 

However, it has been pointed out that the working time threshold set at an average of 60 hours a week is too strict.

 

And since there are no clear judging criteria regarding those factors (night or shift work, etc.) that should be comprehensively considered, except working hours, it has been mistakenly perceived that only when the 60-hour threshold is met, can chronic fatigue be recognized as work-related.

 

The amendment announced this time will broaden the working time criteria by which to judge whether chronic fatigue is work-related or not into three-step criteria.

 

① The current 60-hour threshold will be an automatic recognition threshold.

 

※Automatic recognition threshold: If the threshold is met, a disease is automatically recognized as work-related unless there is any counterevidence that it was caused by the worker's personal illness.

 

② It will be clearly stated that the work-relatedness of chronic fatigue syndrome increases if the number of hours worked over the 12 weeks before its development exceeds an average of 52 hours a week. And there will be a new provision stipulating that chronic fatigue syndrome is considered strongly related to work if aggravating factors, such as shift work, are present.

 

*The following aggravating factors will be specified:① work with an unpredictable schedule, ② shift work, ③ work with a lack of holidays, ④ work that requires exposure to hazardous work environments (cold, temperature changes, noise), ⑤physically demanding work, ⑥work that requires business travel causing a huge time lag, and ⑦work involving mental strain

 

③ It will be clearly stated that even in cases where the number of hours worked does not exceed 52 hours, the work-relatedness of chronic fatigue syndrome increases if the worker is exposed to multiple aggravating factors.

 

Meanwhile, considering that working at night adds to the worker's physical and mental strain, it will be required that 30% of day-time working hours should be added when calculating the number of hours worked.

 

<3> Expanded list of items covered by IACI (i.e. benefit items) and improved recognition criteria

 

Currently, IACI medical care benefits are paid based on the national health insurance fee schedule, and the payment criteria are relaxed to recognize non-benefit items as benefit ones, if necessary for the treatment of industrial accident patients. The amendment announced this time will expand the benefit payment criteria to cover 22 new items, including wheelchairs, joint braces and hearing aids, from January 1st, 2018.

 

- Extending the list of benefit items

 

Rehabilitation assistive devices, such asinstallation-type electric lifts, shoulder braces and manual and electric wheelchairs, will be included as new benefit items.

 

The payment criteria concerning additional payment within durable years,  replacement or repair expenses, etc., will be expanded, too.

 

Moreover, various fees, including fees for written opinion on work-related disease, fees for written opinion on special rehabilitation treatment or hospital transfer, fees for written opinion on need for nursing care, medical record copying fees and total service usage fees, will be paid for by IACI.

 

- Relaxing the benefit payment criteria

 

IACI will provide broader coverage than the national health insurance scheme  as it will pay for hearing aids and neurocognitive function tests regardless of age.

 

In the case of burns requiring long-term treatment and high treatment costs, thus inflicting severe suffering on their victims, the criteria will be relaxed by extending the scope of burn victims eligible for benefits from those with burns of at least 40% of their total body surface area to those with burns of at least 60% of their total body surface area.

 

The government will continue its work to massively extend the list of benefit items to cover industrial accidents associated with many non-benefit items, such as burns and finger amputations.

 

Employment and Labor Minister Kim Young-joo said, "The criteria for recognition of chronic fatigue syndrome as work-related disease, which have remained unchanged since 2013 even though it has been argued that the threshold is too high, were greatly improved through this revision."

 

She went on to say, "The revision is expected to drastically increase chronic fatigue cases recognized as work-related."

 

She also added, "The government will do its utmost to create a win-win and people-centered IACI that aims to expand protection for workers injured in commuting accidents, etc., and reduce the burden of insurance premiums on small business owners."

Last Modifide Date   :   Fri February 2, 2018
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