Expats frequently are confused by insurance maze

Many expats are trying to do right and want to cover their domestic and maintenance employees with benefits and insurance as mandated by the law. Many feel the system in Costa Rica is too complex to understand. In fact, it is for most foreigners and locals alike.

Costa Rican workers find the system complex too. Others cannot cover themselves because it is overly expensive for them to do so.

One property owner in Guanacaste has three part-time workers. There is a housekeeper and two outside gardeners. He has Seguro Hogar Comprensivo, a comprehensive homeowner’s policy, with the Instituto Nacional de Seguros and said he feels his employees are covered. He does not have Caja insurance for them.

He asked his housekeeper if she had health insurance. She said her husband’s policy covers her.

He asked his gardeners if they had insurance, and they said, “Sure, we are covered by the Caja.” They do not understand they need to pay for a workers’ compensation policy for themselves.

Is this expat protected if one or more of these workers gets sick? Is he covered if they break their neck on the job?

Who will be stuck with the bills? To answer these questions, it is necessary to understand the system. Here is a brief summary:

The Caja is short for the Caja Costarricense de Seguro Social.  This translates into English as the Costa Rican department of social security. The organization establishes benefits for everyone insured. Compulsory contributions by the state, employers and workers pay for the system. It covers sickness, disability, maternity, old age and death.

The Caja supplies health care to individuals.  The insurance coverage includes general medical attention, hospitalization, pharmaceuticals, and dentistry. There are three basic types of policies:

1. Obrero Patronal or employer paid insurance for employees.

2. Trabajador Independiente. Self- employment insurance.

3. Asegurado Voluntario. Voluntary insurance paid by those who do not work, for example, students.

The Instituto Nacional de Seguros is called INS. This translates into English as the institute for national insurance. This organization covers occupational accidents and work-related illnesses, as well as transit accidents among other risks.

INS supplies workers’ compensation for work related risks. There are five types. Each of which is discussed in detail on May 25:

RT Obligatoria (obligatory workers compensation): This is the policy businesses use to insure workers.

RT Hogar (home workers compensation): This policy come in two flavors: one or two domestic workers with one occasional worker.

Seguro RT Patrono Asegurado (workers compensation for business owners): Owners insuring themselves when they are not on a payroll.

Seguro RT Independiente (self-employment insurance): This policy is whattheydo060815for self-employed people, for example, a real estate agent operating in Costa Rica working for him or herself.

Seguro RT Adolescente (adolescent work hazard insurance): This policy is for the underage children working for family members in a family business.

In summary, every worker in this country is required to have two insurance policies: A health policy with the Caja Costarricense de Seguro Social and the riesgos de trabajo,   workers compensation, policy with the Instituto Nacional de Seguros,

Now back to our expat.

The housekeeper: She is probably covered under the expats Seguro Hogar Comprensivo policy for a work-related accident. However, she is not covered for a health issue.  Her husband’s policy may provide some benefits, but if the Caja finds out she is working, they will sue the expat.

The law is very clear. Even part-time workers require complete coverage. Claims for non-paid benefits never expire.  If the Caja gets its teeth into a collection action,  the penalties and interest are severe.

The gardeners: Based on their answer to the expat’s query, they do not have workers’ compensation insurance. The Caja does not provide this type of coverage. If they get hurt, the expat will be responsible for all expenses and indemnification – even for life – for any accident.

If they get sick outside the job, and have their own policies, they might be covered, but if the Caja finds out they work without workers’ compensation, the expat would be on the hook for not having them covered with health insurance.

The best plan it seems is to have no workers. Some people have opted for this solution. However, most expats living in Costa Rica are retired and want to take it easy. Employees are necessary for most. It is a pain to set up a legitimate payroll and expensive to pay all the costs associated with having helpers around.

Understanding how the system works is a good start to decide what one should do.

Garland M. Baker, a certified international property specialist, is a 45-year resident and naturalized citizen of Costa Rica. His firm’s team provides multidisciplinary professional services to the country’s international community.  Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info, a free reprint is available at the end of each article.  Copyright 2015, use without permission prohibited.

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