Health insurance funds now hold assets of more than €6.1 billion, accumulated with the money of Belgian citizens. They escape corporate tax and are exempt from the wealth tax on non-profit associations. While they are supposed to focus on reimbursing healthcare costs, they invest in shares, bonds, shops or even hotels. It is time to put an end to these privileges and subject health insurance funds to tax. The revenue generated, up to €165 million per year, would allow workers' taxes to be halved in their first year of employment.
These fortunes did not come from nowhere:
- Health insurance funds have extended their mandatory insurance coverage mission into more lucrative activities such as supplementary insurance.
- Strangely, they escape corporate tax entirely. Their private competitors, meanwhile, are taxed normally. The left accuses multinationals of dodging tax while introducing exemptions to ensure their own associations escape any taxation.
- Health insurance funds are exempt from the wealth tax that applies to non-profit associations, a tax paid by associations such as Action Père Damien or Les Petites Sœurs des Pauvres. The left has no problem taxing these associations, as long as the health insurance funds are left untouched.
- While efforts are being demanded from all sectors, the amounts allocated by the National Institute for Health and Disability Insurance (INAMI) for health insurance funds' management costs have increased by more than 15% in 2 years.
It is more than time to reform these structures, as health insurance funds are not meant to build up assets of this scale. Privileges must end, and health insurance funds must be subject to (i) corporate tax and (ii) the 0.45% wealth tax paid by all non-profit associations in this country, with an exceptional solidarity contribution of 1.35% in the first year. This is not a new tax but an alignment with the existing regime; the end of a privilege!
These measures, which could bring in up to €165 million a year, will not be mere budget savings, they will feed solidarity! With this money, we propose halving workers' taxes in their first year of employment.
1. A troubling finding
Today, every Belgian citizen is entitled to health and disability insurance by joining a health insurance fund. If they wish, they can also take out supplementary insurance (e.g. dental coverage), either with the aforementioned health insurance funds or with private providers.
Over the years, health insurance funds have amassed a fortune of nearly €6.1 billion. This money is not there to cover their activities: €5.2 billion (85% of the total) is invested in equity and bond portfolios. Only €350 million (6% of the total) sits in current accounts to cover the funds' operations. The rest is invested in property: offices, shops, hotels, leisure and holiday centres.
For example, the Mutualité Chrétienne owns hotels in France, Austria and even Switzerland. Solidaris holds shares in a 3-star château-hotel in Dinant, popular with luxury car enthusiasts. This list is not exhaustive.
It is alarming to note that these politicised organisations have amassed such fortunes at the expense of citizens, investing them in the markets or using them for events such as the Festival des Solidarités (Solidaris).
The finding is clear and undeniable: health insurance funds have forgotten their role, which is to help Belgians access healthcare throughout their lives in a spirit of solidarity and mutual assistance, far removed from profit-seeking.
At a time when the State is taking courageous budgetary measures, health insurance funds are sitting on huge fortunes. And all this amid a total lack of transparency.
It is said that this war chest constitutes a legally required solvency guarantee. But how then can one explain that this reserve is invested either in shares or in holiday centres? This argument does not hold up. Banks too are subject to solvency rules, yet they are taxed, more heavily than non-profit associations, and all in the same way.
2. Where does the health insurance funds' great wealth come from?
These war chests have been skilfully and quietly built up over the years thanks to anomalies:
- First, health insurance funds expanded their activities: rather than limiting themselves to the compulsory part of the insurance, they also offer supplementary insurance, an extremely lucrative activity.
Profit-seeking, so widely criticised by the left, has become the obsession of health insurance funds. These profits are then used for political sponsorship and disguised subsidies.
- Furthermore, they keep citizens in the dark about the financing of the basic healthcare reimbursement coverage. Rather than presenting themselves as an intermediary annually financed by INAMI and disclosing the existence of a free health insurance fund (CAAMI/HZIV), they let people believe it is their compulsory contribution that finances the mandatory reimbursements. Above all, they must not lose a member.
- Furthermore, they largely escape corporate tax and would thus have saved no less than €362 million since 2020. Over the same period, by way of example, a private player such as DKV had to pay €116 million in taxes.
Such a difference in treatment is unjustifiable. While the left constantly complains that companies do not pay enough tax (even though they pay 25% and cannot go below 15% under the rules applying to multinationals), it finds nothing wrong with politicised health insurance funds paying nothing at all.
- Finally, unlike any other non-profit association, health insurance funds pay no wealth tax. Every non-profit association in this country pays 0.45% annual tax on assets exceeding €500,000. If health insurance funds were treated the same way, this would bring in €27 million for state coffers. We also propose an exceptional solidarity contribution of 1.35% in the first year.
This amount corresponds to what the Government wanted to save by abolishing the copyright tax regime for the IT sector. They prefer to protect health insurance funds, even at the cost of disinvesting in tomorrow's technologies.
How can one explain that non-profit associations such as 'Action Père Damien' or 'Ensemble Contre le Cancer' have to pay while politicised health insurance funds are exempt? The left wants solidarity, but not with its own money.
The left worries that this measure, whose only purpose is to correct an unjust anomaly, would be passed on to policyholders. Claiming this is completely irresponsible:
- Before passing on what is nothing more than tax fairness to Belgian citizens, health insurance funds should review their inefficient operations.
- The left generally has no problem wanting to tax companies more heavily, even though they have no choice but to pass irresponsible tax increases on to the end consumer.
3. Obvious measures are needed
Health insurance funds are politicised organisations that benefit from unfair tax regimes, allowing them to amass fortunes at the expense of Belgian policyholders.
These are opaque structures, politically instrumentalised, and protected by the left.
It is essential to reform the system, make it transparent and efficient, and in short restore its original purpose: insuring Belgians for healthcare and disability while controlling costs and guaranteeing better accessibility.
Here is what the Mouvement Réformateur proposes:
- Subject health insurance funds to the same tax regimes as private players; this is not a new tax! It is unjustifiable that these structures enjoy privileges inherited from partisan considerations. Health insurance funds must be subject to (i) corporate tax and (ii) the 0.45% wealth tax paid by all non-profit associations in this country, with an exceptional solidarity contribution of 1.35% in the first year.
It is clear that other measures can be taken, measures designed to ensure efficiency, transparency and impartiality:
- Transfer the mandatory insurance activity to the CAAMI/HZIV.
- Strictly and firmly regulate the health insurance funds' ancillary activities, or even ban them.
- Hold health insurance funds accountable by imposing performance criteria.
If such measures are taken, the gains for state finances will be significant: substantial tax revenue and greatly reduced operating costs. These gains are estimated at €165 million per year.
Flagship measure
Halve personal income tax for workers in their first year of employment.
Other proposed measures
- Lower corporate tax for micro/small and medium-sized enterprises from 20% to 15% on the first €200,000.
- Reduce taxes for young self-employed workers by halving them for the first three years.
- Increase the rate of the supplementary voluntary pension for self-employed workers to 9.50%.
- Reduce taxation on company cars and strengthen the mobility budget.
- Abolish social security contributions for secondary self-employed workers.
In conclusion, reforming health insurance funds is a necessity to continue pursuing our goal of revaluing work.