03 December 2019 14:24

Mandatory health insurance fees will be collected starting April 1, 2020

At the plenary session of the Milli Majlis held on December 03, 2019, amendments to the Law of the Republic of Azerbaijan "On Health Insurance" were adopted. According to the amendment to the law the benefit package of mandatory health insurance will not consist of basic and additional components. The package will cover both outpatient and inpatient medical services.

According to the law, starting January 1, 2020, a mandatory health insurance fee of 90 manat will be applied per person for the calendar year from the state budget. A 2% mandatory health insurance fee will be deducted from the monthly salary fund of employers and employees up to 8000 manat in public and oil sectors. The mandatory health insurance fee to be deducted from the monthly salary funds over 8000 manat will be 0.5%. This means that, for example, if a citizen earns 8500 manat monthly, 2% of the 8,000 manat and 0.5% of the remaining 500 manat will be charged for mandatory health insurance. A 1% mandatory health insurance fee will be deducted from the monthly salary fund of employers and employees up to 8000 manat in non-public and non-oil sectors. The compulsory health insurance fee to be deducted from the monthly salary fund over 8000 manat will be 0.5%. From 2021, it is expected that a 2% mandatory health insurance fee will be deducted from the monthly salary fund of employers and employees up to 8000 manat in the aforementioned sectors. A 2% mandatory health insurance fee will be deducted from the monthly revenue of natural persons engaged in the provision of services (works) under civil-legal contracts up-to-and-including 8000 manat and 1% from the monthly revenue over 8000 manat. 

A 4% mandatory health insurance fee will be deducted from the minimum monthly wage for individuals (individual entrepreneurs, private notaries, bar association members) registered as taxpayers under the Tax Code, except for the temporary suspension of business or other taxable transactions. Under the law, the collection of compulsory health insurance fees—except for compulsory health insurance fees paid from the state budget—as well as insurance fees imposed on tobacco products, alcohol, and energy drinks will start on April 1, 2020.

Under Article 15-2.3.6 of the Law, from 2023, a 48% mandatory health insurance fee will be deducted from the minimum salary for independent payers for the calendar year. For example, the minimum monthly wage in the country is 250 manat. 48% of this amount—120 manat per calendar year—is charged as a mandatory health insurance fee.

Also, the article of the law "Exemption Amount and Term" has been deleted and replaced with the article "Co-financing Amount.” The sum of co-financing refers to the amount of loss or damage caused by an insurance event that is not covered by the mandatory health insurance and paid by the insured. The amount of co-financing is determined by the service package and paid directly to the healthcare provider. Co-financing will begin on April 1.

Under the law, the entire population is considered to be insured and have equal rights to access the medical services provided in the benefit package. As to the scope of the law, it should be noted that this law does not apply to persons temporarily present in Azerbaijan Republic, persons with temporary or permanent residence in Azerbaijan under the Migration Code (except military servicemen), accused persons held in pre-trial detention facilities, persons held in detention facilities (except detention units), except for expatriates, and persons without citizenship who received the status of a refugee in Azerbaijan Republic and received an asylum from the Representative Office of the United Nations High Commissioner for Refugees in Azerbaijan Republic.

Under the amendment to the law, compulsory health insurance will be implemented step-by-step during 2020, taking into account the sequence established by the Agency for the country’s administrative territorial units. It should be noted that the law will come into effect on January 1, 2020, after being signed by the President of the Republic of Azerbaijan.