Official Dispatch 1734/BHXH-QLT 2017 HCMC collection of social insurance, health insurance premiums; management of social insurance books

To: Employers in Ho Chi Minh City

On April 14, 2017, the General Director of Vietnam Social Security signed Decision No. 595/QD-BHXH promulgating the procedures for collection of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance premiums; grant of social insurance books and health insurance cards, which took effective from July 1, 2017.

Ho Chi Minh City Social Security requests employers in the City to access the address: http://bhxhtphcm.gov.vn/Resource/vanban/qd595.pdf to download the full text of the procedures and forms under Decision 595/QD-BHXH for reference and consistent implementation.

Ho Chi Minh City Social Security provides the following instructions on procedures for collection of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance premiums; grant of social insurance books and health insurance cards, along with several notes on implementing Decision 595/QD-BHXH as follows:

1. Decentralization of collection management

Newly established units register to participate in social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance for the first time at social security offices of districts or rural districts (hereinafter referred to as district-level social security offices), where the units register their business.

When the unit changes its business registration address to another locality, within 3 months, it must notify the district-level social security office where it is currently participating to change the location according to regulations. If the unit fails to notify the change of location, the current district-level social security office shall temporarily suspend the collection of social insurance premium and coordinate with the district-level social security office where the unit is going to register its business address to carry out the procedures for changing the place of participation.

2. Participants

2.1. Participating in social insurance, labor accident and occupational disease insurance, health insurance, and unemployment insurance at the same time

a) People working under labor contracts with a term of 3 months or more, including labor contracts signed between units and at-law representatives of persons aged under 15 years in accordance with the labor law;

b) Cadres, civil servants, and public employees as prescribed by the law on cadres, civil servants, and public employees. Particularly, cadres, civil servants, and public employees holding management positions are not subject to unemployment insurance contributions;

c) Managers of enterprises and cooperatives that are enjoying salary;

2.2. Participating in social insurance, labor accident and occupational disease insurance only

a) People working under labor contracts with a term of between full 1 month and under 3 months (except for probationary contracts as prescribed by the labor law), which take effective from January 1, 2018.

b) Employees who are foreign citizens working in Vietnam with a work permit or practice certificate or practice license issued by a competent Vietnamese agency (effective from January 1, 2018 according to the Government's regulations). For foreigners working under labor contracts with a term of 3 months or more, they must participate in compulsory health insurance.

2.3. Participating in retirement and survivorship funds only

a) Part-time staffs in communes, wards and townships;

b) Vietnamese guest workers defined in the Law on Vietnamese Guest Workers.

c) Persons on spouse allowance in overseas Vietnamese representative missions specified in Clause 4, Article 123 of the Law on Social Insurance;

d) Persons that are participating in, and persons having their period of compulsory social insurance premium payment reserved, who lack up to 6 months of social insurance contribution to be eligible for monthly pensions and survivorship allowance, are allowed to pay a lump sum for the remaining months to enjoy the regimes according to regulations.

2.4. Employees who are sent to study, practice or work at home or abroad while still receiving salaries paid by domestic employers must participate in compulsory social insurance and unemployment insurance;

2.5. Employees who sign more than one labor contract.

a) Employees with two or more labor contracts concurrently with different units shall pay social insurance and unemployment insurance premiums according to the first signed labor contract, and pay health insurance premium according to the contract with the highest salary.

b) In case employees sign labor contracts with more than one employer but have already paid social insurance premium and labor accident and occupational disease insurance at one employer, the remaining employers must pay labor accident and occupational disease insurance premium for the employees if such employees are subject to compulsory social insurance.

3. Premium rates

Premium rates shall be determined based on the monthly salary multiplied by (x) the contribution rate according to each respective fund source.

Of which, 25% of the social insurance fund shall be allocated to component funds as follows:

- Sickness and maternity: 3%

- Retirement and survivorship: 22%

4. Monthly salary on which social insurance premiums are based

4.1. Salary regulated by the State

a) For employees subject to the State-prescribed salary regime, their monthly salary on which compulsory social insurance premiums are based is their rank- or grade-based salary plus position-based, extra-rank working seniority-based or occupation-based seniority allowance (if any). This salary is calculated based on the basic salary.

The monthly salary on which compulsory social insurance premiums are based specified in this Point includes the reservation difference coefficient as prescribed by the law on salary.

b) For part-time staffs in communes, wards and townships, the monthly salary on which social insurance premiums are based is the basic salary.

4.2. Salary regulated by units.

a) The salary serving as the basis for contribution by employees includes:

- Salary stated in the labor contract.

- Salary allowances: Position-based or title-based allowance; responsibility allowances; allowances for hazardous, dangerous, and heavy work; seniority-based allowance; regional allowances; mobility allowances; attraction allowances; and other allowances of similar nature.

- Additional payments that can be determined with a specific amount of money, along with the agreed salary in the labor contract, and paid regularly in each salary period, taking effective from January 1, 2018.

b) Monthly salary on which compulsory social insurance premiums are based does not include: initiative bonuses; mid-shift meals; transportation, telephone, travel, housing, childcare, and small child support; assistance for employees with deceased relatives, employees with relatives getting married, employee birthdays, support for employees facing difficulties due to labor accidents and occupational diseases, and other support or allowances stated separately in the labor contract.

c) The monthly salary used as a basis for payment for enterprise managers or cooperative managers enjoying a salary is the salary decided by the enterprise or the general meeting of members, respectively.

d) The monthly salary for compulsory social insurance, health insurance, and unemployment insurance contribution must not be lower than the region-based minimum salary at the time of payment for employees doing the simplest jobs or holding the simplest titles under normal working conditions.

- For employees with jobs or titles that require training or vocational training (including employees trained by the enterprises themselves), such monthly salary must be 7% or more higher than the region-based minimum salary;

- For employees working in jobs or holding titles with heavy, hazardous, or dangerous working conditions; and jobs or titles with particularly heavy, hazardous, or dangerous working conditions, such salary must be 5% or more higher, and 7% or more higher than the salary of jobs or titles with equivalent complexity under normal working conditions, respectively.

e) If the monthly salary for social insurance, health insurance, and labor accident and occupational disease insurance contribution exceeds 20 months of the basic salary, the monthly salary for social insurance, health insurance, and labor accident and occupational disease insurance contribution must be equal to 20 months of the basic salary. If the employee’s monthly salary exceeds 20 months of the region-based minimum salary, the monthly salary on which the unemployment insurance premiums are based is equal to 20 months of the region-based minimum salary.

5. Methods of payment

On a monthly basis, no later than the last day of the month, units shall deduct the payments for social insurance, labor accident and occupational disease insurance, health insurance, and unemployment insurance premiums based on the monthly salary fund of the participating employees and simultaneously make deductions from monthly salary used as the basis for payment of social insurance, labor accident and occupational disease insurance, health insurance, and unemployment insurance premiums of each employee at the prescribed rate and transfer them at the same time to the collecting account opened by the social security office at the bank or State Treasury.

Note: When creating a payment order or payment slip, the unit must fully write down 3 criteria: name of the unit, code of the unit participating in social insurance, and payment content.

6. Calculation of late payment interest and arrears collection

6.1. Late payment:

If the unit is late in paying compulsory social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums from 30 days or more, it must pay the interest calculated on the unpaid amount of compulsory social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums.

6.2. Arrears collection:

a) Arrears collection due to evasion of payment: In case the unit evades payment, fails to pay enough for the number of people required to participate, fails to pay the full amount required to pay according to regulations, or misappropriates social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance contributions (hereinafter referred to as evasion) as concluded by the specialized inspection of the social insurance office or by the competent state inspection agency from January 1, 2016, then in addition to the payable amount as prescribed, the interest shall also be collected based on the unpaid amount, the duration of evasion and the late payment interest rate as follows:

- If the entire period of evasion of payment is before January 1, 2016, the interest shall be calculated according to the late payment interest rate applicable to 2016;

- For the period of payment evasion from January 1, 2016, onwards, the interest rate for late payment applicable to each year at the time of detection of the evasion shall be used.

- In case the unit requests to collect arrears, to combine the period of 6 months or more accompanied by an inspection conclusion from the social security office or inspection agency or a decision on handling administrative violations from a competent agency.

b) Arrears collection due to an increase in the salary for which social insurance, unemployment insurance, and labor accident and occupational disease insurance premiums have been paid for employees: In case the unit carries out arrears collection of social insurance, unemployment insurance, labor accident and occupational disease insurance premiums after 6 months from the date the competent person signs the decision or the labor contract (appendix to the labor contract) to raise the employee’s monthly salary level, salary rank, salary, or allowance on which the social insurance, unemployment insurance, labor accident and occupational disease insurance premiums are based, the amount of arrears for social insurance, unemployment insurance, and labor accident and occupational disease insurance premiums to be collected shall include the payable social insurance, unemployment insurance, and labor accident and occupational disease insurance premiums according to regulations and the arrears interest calculated on the amount payable.

6.3. The late payment interest rate at the time of interest calculation (%) shall be determined as follows:

- For compulsory social insurance, unemployment insurance, and labor accident and occupational disease insurance, the late payment interest rate shall be equal to 2 times the monthly average investment interest rate of social insurance fund of the preceding year announced by Vietnam Social Security.

- For health insurance, the late payment interest rate shall be equal to 2 times the monthly interest rate of the interbank market with a term of 9 months announced by the State Bank of Vietnam on its Portal in the preceding year. If the interbank interest rate of the preceding year has it term other than 9 months, the interest rate of the term preceding the 9-month term shall be applied.

6.4. The interest calculation formula is specified in Article 37 and Article 38 of Decision 595/QD-BHXH.

7. Regulations on management of periods of payment of social insurance, health insurance, and unemployment insurance premiums

7.1. If an employee does not work and does not receive a salary for 14 working days or more in a month (in the case of a 26-working-days-per-month regime), a social insurance premium for that month shall not be required. This period shall not be counted for social insurance benefits.

7.2. If an employee is on sick leave for 14 working days or more in a month as specified in the law on social insurance, he/she is not required to pay social insurance, health insurance, unemployment insurance, or labor accident and occupational disease insurance premiums but may still enjoy health insurance benefits.

7.3. If an employee is on maternity leave for 14 working days or more in a month, both the employee and the unit are not required to pay social insurance, unemployment insurance, or labor accident and occupational disease insurance premiums. This period shall be counted as the payment period of social insurance but not be counted as the payment period of unemployment insurance premium, and the social security office shall pay the health insurance premium for the employee.

a) If the labor contract expires while the employee is on maternity leave, the period from the start of the maternity leave until the end of the labor contract shall be counted as the period of payment of social insurance premiums. The time off to enjoy maternity benefits after the labor contract expires shall not be counted as the time for social insurance payment.

b) The maternity leave period of an employee who terminates his/her labor contract or employment contract or stops working before giving birth or adopting an under-6-month-old baby shall not be counted as the payment period of social insurance premium.

c) If a female employee returns to work before the end of the maternity leave period as prescribed, the maternity leave period from the start of the maternity leave until the return to work shall be counted as a payment period of social insurance premium. From the time the female employee returns to work, both the employee and the unit must pay for social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums.

d) In case the father or the direct fosterer, intended mother or father, or the direct fosterer enjoys maternity benefits without taking a leave, both the employee and the unit must continue to pay for social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums.

7.4. If an employee is suspended from work according to labor laws but continues to receive a salary, both the employee and the unit must pay social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums based on the salary paid to the employee during the suspension period.

8. Regulations on grant and management of social insurance books

8.1. Employees participating in social insurance who have not yet been granted a social insurance book shall take responsibility for filling out a declaration form for providing and changing information about social insurance and health insurance participants (Form TK1-TS), recording the social insurance number, filling information and taking responsibility before the law for the declared information.

For participants who have not been granted a social insurance number (including those who do not remember their social insurance number), they shall coordinate with the social security office or post office for grant of social insurance numbers.

Note: Units and employees may look up the social insurance numbers and household numbers of participants at the following address: https://baohiemxahoi.gov.vn/tracuu/Pages/tra-cuu-ho-gia-dinh.aspx.

8.2. Each employee shall be granted only one social insurance book with a unique social insurance number throughout their participation to monitor the payment and settlement of social insurance and unemployment insurance benefits as prescribed by law.

If an individual has more than one social insurance book, he/she must submit all books to the unit where the last social insurance participation is conducted to carry out the procedures for merging the books. If the time of payment of social insurance and unemployment insurance overlaps, the social security office shall refund to the employee the amount the unit and the employee have paid into the retirement and survivorship fund and the amount paid into the unemployment insurance fund (including the social insurance and unemployment insurance premiums paid by the employer), excluding interest.

8.3. Employees shall take responsibility for preserving social insurance books according to the Law on Social Insurance (2014). After the social security office hands over the separate sheet of the social insurance book confirming the payment period of social insurance and unemployment insurance premiums until 2016 to the employer, the employer shall take responsibility for handing over the social insurance book (including the cover of the social insurance book and separate sheets of the social insurance book or the unemployment insurance book and separate sheets of the unemployment insurance book) to the employee.

When an employee leaves his/her job, the employer shall prepare a dossier of employee reduction notification. Based on the dossier of reduction, the social security office shall print a separate sheet confirming the book of the next period and transfer to the employee (the employee is not required to resubmit the book to the social security office).

Note: The failure to provide social insurance books to the social security office to confirm that the subsequent participation only applies to employees of whom the participation has been reviewed by the social security office, and the separate sheets until 2016 have been printed and handed over to the employees for management.

8.4. Employees who reserve the period of paying social insurance and unemployment insurance premiums from their previous units then re-register to continue participating insurance must provide their social insurance books to confirm the subsequent participating period.

8.5. For unit owing payment of social insurance, unemployment insurance, and labor accident and occupational disease insurance premiums, if an employee is eligible for social insurance benefits or terminates his/her labor contract, the unit shall be responsible for fully paying social insurance, unemployment insurance, and labor accident and occupational disease insurance premiums, including late payment interest, as prescribed. The social security office shall confirm the social insurance book to promptly resolve social insurance and unemployment insurance benefits for the employee.

If the unit fails to fully paid the insurance premiums, the social insurance book shall be confirmed up to the period for which social insurance, unemployment insurance and labor accident and occupational disease insurance premiums have been paid. Once the owed amount is recovered, additional confirmation shall be updated on the social insurance book.

8.6. In case the unit relocates within the province or the unit changes its name, the confirmation of the social insurance book shall not be conducted.

9. Regulations on grant and management of social insurance cards

9.1. The health insurance card is valid corresponding to the amount of the health insurance contribution. The health insurance card becomes valid from the date the health insurance premium is paid. Medical facilities, upon receiving the health insurance cards from participants who visit for medical examination, shall check the health insurance card information on the data portal of the health insurance assessment information system to determine the validity of the health insurance card.

9.2. If the unit delays paying the health insurance premium for 30 days or more, the health insurance card becomes invalid. When employees incur medical expenses during the period on which the health insurance card is invalid, the social security office shall directly pay the medical expenses according to regulations after the unit pays full late payment of the health insurance premium.

9.3. Health insurance participants who are permanently or temporarily residing or working in a province or city may register for initial health insurance medical examination and treatment at a commune, district level, or equivalent; some provincial- or central-level medical facilities shall be notified quarterly by the social security office on the website http://bhxhtphcm.gov.vn/.

9.4. Health insurance participants may change their facilities of initial medical examination and treatment registration in the first month of the quarter.

9.5. Employees receiving sickness and maternity benefits shall continue to use the granted health insurance card without renewing it. For employees taking unpaid leave during the period on which the unit prepares a dossier for maternity leave, the actual use period shall be recorded from the month of maternity leave until the end of the validity period of the granted health insurance card.

9.6. Employees on long-period sickness leave or retirement shall continue to use the granted health insurance card until the end of the month in which the unit reports the reduction. Based on the list of reduction reports, the social security office shall prepare a List of people only participating in health insurance (using Form D03-TS) according to persons subject to long-period sickness or those receiving pension and monthly social insurance benefits. The new health insurance card shall be valid from the first day of the month following the month of reporting reduction.

9.7. When there is a reduction in the number of employees, the unit must promptly prepare a list of reduction reports and send it to the social security office via the electronic transaction system within the month (up to the last day of that month). If the reduction is reported after the last day of the month of reduction, the health insurance card value of the following month must be paid in full and the card is valid until the end of that month. The social security office shall not revoke cards in cases of reporting reduction.

For example: If an employee leaves on July 28, 2017, and the unit reports the reduction on August 1, 2017, the health insurance premium until the end of August 2017 must be paid; social insurance and unemployment insurance premiums for August 2017 are not required to be paid.

9.8. The unit must notify employees who leave their jobs that if they do not subject to other compulsory health insurance, they must register for household health insurance to receive medical examination and treatment benefits and ensure 5-year continuous participation according to the Law on Health Insurance.

Note: If the card renewal is registered 10 days before the old card expires, the validity period of the new household health insurance card will start from the expiry date of the old card. If the re-registration is carried out within 3 months after the old card expires, the new household health insurance card will be valid from the payment date.

9.9. From September 1, 2017, the social security office shall issue health insurance cards according to the social insurance numbers.

10. Time limit for declaration of dossiers

10.1. Units may compile dossiers of increase, reduction, and adjustment to the number of employees and salaries of the month on any day of that month via the electronic transaction system. However, to facilitate the monitoring and management of dossiers in cases of reduction or adjustment, units should compile dossiers once a month.

For example: Dossiers of August 2017, should be prepared in the period of between August 1, 2017, and August 31, 2017.

10.2. When there is an increase in the number of employees, the unit must promptly declare the increase, and the health insurance card shall be valid from the date of declaring dossiers via the electronic transaction system.

10.3. When there is a decrease in the number of employees, the unit shall report the reduction from the 1^st of the following month. However, the health insurance card value for the following month must still be paid. To avoid paying the additional health insurance card value for the following month, the unit may prepare a dossier to report a decrease for the following month starting from the 28^th of the previous month, but after reporting the decrease, it is not allowed to report the decrease incurred in the previous month.

For example: An employee quit his/her job on July 31, 2017.

- If the unit prepares a dossier for August 2017 and reports the reduction in the number of employees from August 2017 on August 1, 2017, the unit must additionally pay the value of the health insurance card for August 2017 and the card is valid until August 31, 2017.

- If the unit prepares a dossier for August 2017 and reports a reduction in the number of employees from August 2017 on July 28, 2017, the unit shall only pay social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums until July 2017, and the health insurance card is valid until July 31, 2017.

Note: After preparing a dossier for August 2017, it is not allowed to prepare dossiers for July 2017 during the remaining days of July 2017.

11. Forms for participation in social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance

11.1. Declaration form for providing and changing information of social insurance and health insurance participants (TK1-TS)

Prepared by the employee: Declare information about social insurances, health insurance, unemployment insurance participants, and household members when the employees do not have a social insurance book number or social insurance number.

Social insurance number may be looked up at the following address: https://baohiemxahoi.gov.vn/tracuu/Pages/tra-cuu-ho-gia-dinh.aspx

Time of preparation: When there is an occurrence.

11.2. Declaration form for providing and changing information of units participating in social insurance and health insurance (TK3-TS)

Prepared by the unit: Declare the unit's information when registering to participate in social insurance, health insurance, and unemployment insurance, and when the unit requests to change information.

Time of preparation: When there is an occurrence.

11.3. Information list (Form D01-TS)

Prepared by the unit: Summarize the unit's dossiers and papers and participants for use as the basis for arrears collection of social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums; re-grant, renewal, or modification of the content recorded on the social insurance book, health insurance card attached to the list of employees participating in social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance (Form D02-TS) or the declaration form for participation in social insurance, health insurance (Form TK1-TS).

Time of preparation: When there is an occurrence.

11.4. List of employees participating in social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance (Form D02-TS)

Prepared by the unit: for registration; arrears collection and adjustment of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance contribution; grant of social insurance books and health insurance cards for employees of the unit.

Complete the social insurance number; if there is no social insurance number, prepare Form TK1-TS as mentioned in Section 11.1.

Time of preparation: When there is an occurrence within the month (dossiers of August 2017 shall be prepared in the period between August 1, 2017 and August 31, 2017).

11.5. Notification of payment results of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance premiums (Form C12-TS)

Prepared by the social security office: based on the data in Form D02-TS, D02a-TS, Form C12-TS of the preceding month, data in the collection management software and payment documents in the month of the unit to prepare the Notification of payment results of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance premiums (Form C12-TS)

Time of preparation: The social security office shall prepare on a monthly basis and notify the unit before the 15^th of the following month. Upon receiving the notification, the unit should check and compare the data. If discrepancies are found, the unit should reconcile the data with the social security office.

The social security office shall provide for employers in Ho Chi Minh City form C12-TS with a digital signature at the website http://c12.bhxhtphcm.gov.vn.

- Units shall access the above address to create user accounts and register to download and receive Form C12-TS, using their valid digital signatures (Note: Units may use digital signatures of all legally recognized providers).

- User guides for account registration and Form C12-TS for download are available at the address: http://tinyurl.com/bhxhtphcm-c12.

Units wishing to receive form C12-TS signed and stamped by the social security office shall send a specific request for the month of request for the social security office to transfer by post.

Additionally, the social security office shall send Form C12-TS notifications to the email addresses registered by the units through the electronic transaction system (units must provide legal entity email addresses for information security and avoid using personal email addresses).

11.6. Notification of payment results of social insurance, health insurance, unemployment insurance, labor accident and occupational disease insurance premiums (Form C13-TS)

Based on the list of participants and the payment results of social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums in the previous year, the social security office shall notify the status of payment of social insurance, health insurance, unemployment insurance, and labor accident and occupational disease insurance premiums to employees on the e-portal: https://baohiemxahoi.gov.vn/tracuu/Pages/tra-cuu-dong-bao-hiem.aspx

(Forms attached herein).

This Official Dispatch takes effect from the date of its signing, previous regulations in contravention of Decision 595/QD-BHXH of the General Director of Vietnam Social Security are annulled./.