Tax News Kosovo: New Administrative Instruction on the Implementation of the Law on Health Insurance
New Administrative Instruction
Following the approval of Law No. 04/L-249 on Health Insurance in 2014, the Minister of Health has recently issued Administrative Instruction No. 07/2016 on the Collection of Mandatory Health Insurance Contributions (“the Administrative Instruction”). The Administrative Instruction provides for the conditions and procedures for the payment and collection of the mandatory health insurance contributions in respect to the provisions of the law and it will be effective starting from 1 January 2017.
This is the first time that health insurance contributions will be mandatory in Kosovo. Previously, only pension contributions were mandatory and applicable only for Kosovo citizens.
The payment of health insurance contributions shall be made with payment institutions authorized to collect these contribution payments on behalf of the Health Financing Agency. The Health Financing Agency will operate until the establishment of the Health Insurance Fund.
Insured persons and payment of health insurance contributions
According to the Administrative Instruction, the payment of the health insurance contributions shall be mandatory for all Kosovo citizens (i.e. employed, self-employed and non-employed individuals) and foreign individuals residing in Kosovo (bearers of a residence permit issued by the competent authority in the Republic of Kosovo). For any employed individual, the employer (legal entity) shall have the obligation to declare the health insurance via the monthly payroll and pay it through licensed payment institutions. Self-employed individuals and other non-employed individuals shall be obliged to pay personally the health insurance contributions through licensed payment institutions.
Percentage and level of health insurance contributions
During the first 36 months from the start of the collection of contributions (i.e. January 2017), the mandatory health insurance contributions shall be calculated as 7% of the gross income equally shared by the employer (at 3.5%) and employee (at 3.5%). The payment of health insurance contributions must be made no later than the 15th of the following month.
The mandatory health insurance contributions for self-employed individuals shall initially be calculated for the first 36 months from the start of the collection of contributions at 70% of the amount of the individual’s mandatory pension contribution. The payment of health insurance contributions for this category must be made on a quarterly basis but no later than the 15th of the month following the quarter.
For the non-employed individuals, during the first 12 months from the start of the collection of contributions, the health insurance contributions shall be set at EUR 2 per month per person and are due for payment no later than the 15th of the following month.
According to the Administrative Instruction, the Health Inspectorate of the Ministry of Health may impose administrative sanctions on individuals or legal entities if they do not keep accurate records, fail to submit changes in the list of insured persons, refuse or provide false information about the insured persons, disagree to make corrections requested by the Fund or impede any audit of officials with respect to health insurance compliance.
In case of non-compliance, legal entities will be subject to a penalty set at 20 times the minimum wage in the Republic of Kosovo, and individuals – at 7 times the minimum wage.
Entry into force
Administrative Instruction No. 07/2016 dated 14 October 2016 entered into force seven days after the date of signing, while the process of collection of health insurance contributions becomes effective starting from 1 January 2017. Administrative Instruction No. 07/2016 dated 14 October 2016 is published on the webpage of the Ministry of Health of Kosovo.
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