Chile: Mandatory Individual Health Insurance

The recently enacted Law No. 21,342 (hereinafter referred to as the “Law”) establishes new obligations for employers to guarantee employees a safe return to the workplace. Among these measures, the Law establishes a mandatory individual insurance for employees in the private sector with labour agreements subject to the Labour Code, and who are performing their work in person, in whole or in part, to finance or reimburse hospitalisation and rehabilitation expenses to be paid by the employee and which are associated with the COVID-19 virus. Those employees who have agreed to work exclusively under remote work or teleworking modalities, are excluded from this obligation.

This insurance shall also include indemnity in the event of the insured’s natural death, occurring during the policy period, infected with or due to the COVID-19 virus. Employers who do not contract the insurance, in accordance with the terms indicated in the Law, will be responsible for the payment of the sums that correspond to what the insurer would have covered. At any rate, employers will be liable for any associated sanctions that are consistent with the provisions of the Labour Code.

The deadline for contracting the insurance is until 4 July 2021. Also, the value of the insurance policy will be i) annual; ii) paid in one installment; and iii) cannot exceed 0.42 UF (approximately USD 17.50) plus Value Added Tax.

The insurance coverage will be maintained in the event that the employment relationship is terminated for any reason and up to a period of 1 year as from the date of contracting the insurance. In any case, the employer’s obligation to provide the insurance will last for employees under the on-site modality of work hired up to the date that the COVID-19 public sanitary alert is set to expire.