How are enterprises fined for violating regulations concerning payment of health insurance premiums for employees in Vietnam?

Enterprises violating regulations on payment of health insurance premiums (“HIPs”) for employees is an act occurring in several places in Vietnam. BLawyers Vietnam points out some regulations and notes regarding this matter.

Health insurance

I. In what cases do employees have to pay HIPs?

According to the prevailing health insurance law, the following employees must pay HIPs:

  1. Employees working under labor contracts with an indefinite term;
  2. Ones working under labor contracts with a term of 3 months or more;
  3. Ones who are managers of enterprises receiving a salary;
  4. Officials, civil servants; and
  5. People who work part-time in communes, wards or townships according to the provisions of the law.

II. Liability of enterprises in paying HIPs for employees

By law, enterprises are liable for the payment of HIPs for employees. Accordingly, the HIPs rate and liability to pay for HIPs are as follows by law:

  1. The monthly premiums must not exceed 6% of monthly salaries, two-thirds of which is paid by the enterprises and the remaining one-third by the employees. During the time that employees have the right to take maternity leave under maternity benefits under the regulations of law on social insurance, a maximum premium equal to 6% of the monthly salary before maternity leave shall be paid by the social insurance organizations.
  2. The salary used as the basis for payment of HIPs is determined as follows: For employees who receive a salary according to the regulations of the enterprise, the basis for payment of HIPs is the monthly salary stated in the labor contract.

III. Fines for violations on paying HIPs

Enterprises that commit violations related to paying HIPs will be handled as follows:

  1. Depending on the nature and the severity of the violation, enterprises will be disciplined, administratively sanctioned, or examined for penal liability. If causing damage, enterprises must pay compensation in accordance with the law.
  2. Penalties for administrative violations are as follows:
    • For failing to pay HIPs for the entire number of employees required to participate in HIPs, paying HIPs for not enough people to participate in HIPs, paying HIPs late, or avoiding payment of HIPs, enterprises will be fined from 2 to 80 million Dong depending on the severity of the violation.
    • For the act of appropriating HIPs, enterprises will face a fine of from 20 million to 30 million Dong.
    • In addition, the enterprise is also subject to several remedies such as: (1) Forcing to refund the amount that the insured has lost (if any) or (2) Forcing to pay illegal profits to get into the health insurance fund.
  3. To pay the unpaid amount in full and pay an interest equal to twice the interbank interest rate on the amount and the time of late payment; if enterprises fail to do so, at the request of competent authorities, banks, other credit institutions, or the State treasury shall be liable to deduct money from the deposit account of the enterprise liable for paying HIPs to pay the unpaid amount, late payment, and interest of this amount to the account of the health insurance fund; and
  4. All expenses must be refunded to the employee within the scope of benefits and health insurance benefits paid by the employee while he/she has no health insurance card.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. We would love to hear from you.

Date: 13 May 2023

Writers: Tuyen Pham & Minh Truong

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