Supplementary medical insurance is the most valued benefit among employees. Premium medical insurance includes consultations with medical professionals and highly-specialized tests (that are difficult to access through mandatory insurance), as well as pregnancy, dental, vision, and medication, and also elective fees, surgical devices & consumables, required for inpatient care in addition to the state services.
Group life insurance and voluntary pension schemes are gaining popularity, among both employees and employers, and turn into must-have benefits for high-performing companies and business sectors.
The average cost of employer sponsored benefits in Bulgaria varies widely depending on the benefits supplied. The amount of up to BGN 60 per employee per month, paid by the employer for voluntary health insurance, life insurance or voluntary pension insurance is treated as tax free social cost for the employer.
Mandatory employee benefits in Bulgaria include contributions to the State-run pension and healthcare systems. Common supplementary employee benefits in Bulgaria include healthcare, accident insurance, group life insurance, and voluntary pension insurance. Perks include food vouchers, gym memberships, mobile phones, transportation benefits, and employee assistance programs.
Mandatory Employee Benefits in Bulgaria
1. Social Security System
The State Social Security system in Bulgaria is regulated by the Social Security Code. Contributions are mandatory for all employed and self-employed persons, administered/withheld through payroll for people under an employment contract, and paid to the state collective body, which is the National Revenue Agency (NRA). This agency distributes the funds to the respective state funds, which build the National Security Institute, which is responsible for the payment of benefits.
- Sick-leave payment up to 6 months, in case of a short-term disability or reduced ability to work due to general disease (80% of the average monthly security income) and due to work-related accident or occupational disease (90% of the average monthly security income)
- Sick-leave payment is also available for taking care of a sick child up to 60 days per year, and for a sick relative adult up to 10 days per year
- Maternity leave – pregnancy, childbirth, and raising a child to 1 year, 90% of the average security income for the last 24 months, for a total of 410 days and a monthly fixed amount of BGN 650 (it is planned to reach the updated minimum monthly salary for the country of BGN 710, as of April 2022) which is for caring for a child from 1 to 2 years.
- Disability pension in case of a 50% or more permanent disability due to general disease, work-related accident, or occupational disease
- Life-long old-age and full contribution period pension- this is the first pillar (cost-covered basis) of the 3pillar pension model, introduced in 2000.
- One-time cash benefit of BGN 540 in case of death and survivor’s pension depending on the security income of the deceased person and number of heirs
- Unemployment -60% of the average security income for the last 24 months, available for a period from 4 to 12 months depending on the contribution period
- Annual Paid leave of 20 days for employees under ordinary working conditions, defined by law, more days for sectors with heavier working conditions, agreed in a collective employment agreement
2. Healthcare System
The State healthcare system is regulated by the Health Insurance Act. Health contributions are mandatory for all Bulgarian citizens and all foreigners with long-term (5 years) and permanent residence permits.
For employed persons, contributions are administered through payroll, self-employed people should pay by themself, this is also valid for people who do not work.
For children, pensioners, and some socially vulnerable groups, these are paid by the State.
The National Health Insurance Fund is the state body that manages the health installments and distributes them to the respective medical care providers.
The state system is focused on inpatient services (arranged via clinic treatment paths) and on the health of children and retirees. A visit to the general practitioner is necessary to obtain a referral to a medical professional who has the right to order highly-specialized tests. Thus, consultations and diagnoses can be difficult-to-access for busy adults.
Dental care is limited, drugs are partially reimbursed for chronic diseases only.
3. Pension Model
Bulgaria has a three-pillar pension system:
- State Pension fund – the 1st pillar – mandatory, solidarity cost-covered model which provides life-long old-age pension, disability pension, and social pension
- Supplementary mandatory universal funds – the 2nd pillar – are mandatory for all born after 01.01.1960. Contributions can be paid to an individual inheritable account in one of the Universal pension funds, managed by private Pension insurance companies, or to the State Pension fund, which provides additional lifelong old-age pension
- Supplementary voluntary Pension funds – the 3rd pillar – are additional contributions to private pension funds, managed by Pension insurance companies, instalments can be paid by the insured person, shared with the employer, or sponsored only by the employer
Funds paid by the employer, or another third party cannot be received before the fulfillment of the state criterion for lifelong old-age pension, personal installments can be deducted at any time for a fee.
Contributions and key budget indicators
Contributions to the mandatory state system are calculated to the monthly security income of the insured persons with a legally defined ceiling of BGN 3,000 for the last 3 years, which is intended to be increased to BGN 3,400 in April 2022, and a defined minimum which depends on the economic activity, type of contract – employed or self-employed, and in general cannot be less than the state minimum monthly salary (BGN 650 in 2021 and estimated to become BGN 710 from April 2022).
Contributions are shared between the employee and the employer as follows:
|Deductions (2020):||Total||аt the expense of employee||at the expense of employer|
|State Social Insurance contributions: (disability, general disease, maternity, old age pension)||19.30%||8.38%||10.92%|
|Retirement (Supplementary Mandatory Pension Security, second pillar)||5.00%||2.20%||2.80%|
|Healthcare contributions (Mandatory medical insurance)||8.00%||3.20%||4.80%|
|Occupational Accident and disease||0.4-1.1%|
|Personal Income Tax is based on the net salary (gross salary minus all contributions)||10%|
Mandatory Benefits – private system
Work-Related Accident Insurance
It is legally defined that employers from economic sectors with accidents at work coefficient higher than or equal to the average for the country must provide group Accident insurance with an individual sum insured for an employee with at least seven gross annual salaries
Personal accident insurance is also mandatory for some employees with risk professions like policemen, military, firefighters, and for some employees in the state administration like judges, prosecutors, and others.
Business Travel Insurance
The employer is obliged to pay all medical expenses which may occur for their employees while on a business trip abroad, thus making this insurance highly recommended.
Voluntary Employee Benefits
Supplementary Medical Insurance
Medical insurance is the most valued benefit among employees.
This benefit provides outpatient care with immediate access to specialized medical professionals, expensive and highly-specialized tests, without a visit to the general practitioner.
The main in-hospital care services are sponsored by the National Health Insurance Fund, but the supplementary insurance includes reimbursement for elective surgery/treatment/childbirth fees, surgical devices, and minimally invasive consumables that are not paid by the mandatory insurance.
Premium medical insurance also includes medicines, vision, and dental care, with annual limits.
The covid-19 crisis boosted digitalization including mobile apps implemented to support this insurance with claim upload telemedicine online appointments and so on.
Group Life Insurance
This benefit, still underestimated, is gathering speed in the last years, especially with the coronavirus pandemic situation.
We see a growing interest at first-class employers to offer Life insurance for their personnel, realizing the importance of this benefit on one hand, and the competitive advantage they have in recruitment, since life insurance is getting popular and expected by employees, especially in the Hi-tech, outsourcing service, finance, and consultancy sector.
Supplementary Voluntary Pension Insurance
Together with Life insurance, voluntary Pension insurance is the next valued benefit after medical insurance. Typically supplementary pension insurance contributions are shared between the employer and the employee, with an average 2% rate on the monthly salary.
Bulgaria is turning into a preferred destination for technology and outsourcing companies, so a lot of modern benefits are stepping into the market, such as:
- Food Vouchers (used mainly by production enterprises)
- Gym cards /Multisport Cards, fitness and other sports facilities (swimming pools)
- Mobile Phones
- Transportation allowances and company cars for managers
- Employee Assistance Programs
Related Government Websites
- National Social Security Institute
- Ministry of Health
- National Health Insurance Fund
- National Revenue Agency