What is Absenteeism Insurance?

The Dutch statutory sick-pay obligation (loondoorbetalingsverplichting) requires every employer to continue paying at least 70% of an employee's wages for up to two years during illness, in practice, many collective agreements require 100% in year one. Large organisations can absorb this risk from reserves, but for SMBs a single prolonged absence can represent a serious financial risk.

Absenteeism insurance operates with a waiting period (eigenrisicoperiode): the employer covers the wage costs for the agreed waiting period, after which the insurer takes over. Common waiting periods are 14, 30, 60 or 90 days. The longer the waiting period, the lower the premium.

Two main policy variants exist. The conventional absenteeism policy reimburses a percentage of the continued wages after the waiting period, typically 80 to 100 percent. The stop-loss policy only responds when the total absence rate in a given year exceeds an agreed threshold percentage. This is a cheaper option suited to organisations with historically low absence rates that want protection against an unexpected peak.

Many absenteeism policies also include supplementary services: case management, occupational health physician access, reintegration support, and prevention advice. These services can reduce total absence costs structurally and are often as valuable as the direct financial cover.

A single long-term sick employee can cost an SMB tens of thousands: two years of wages, temporary replacement costs, reintegration trajectories, and potential long-term disability (WIA) inflow. Without absenteeism insurance, small businesses carry this entire risk themselves.

A well-structured absenteeism policy provides financial certainty and access to professional reintegration support that helps employees recover and return faster, which is both financially and operationally beneficial.