[Updated 3/27/23] Medical insurance is most important to employees in Italy. Private medical insurance helps employees avoid long waiting lists associated with state-provided medical care and can provide tax benefits. When asked to rank four other common benefits in order of importance, a typical Italian employee will say medical, disability (personal accident), death, and long-term care.
Alessandro de Besi
De Besi-Di Giacomo
There is none because the employee’s age, location, and job position affect the rates markedly.
Employee benefits in Italy are based on a company’s sector (and associated labor contracts) and an employee’s gender, age, salary level, and location. This is true for both mandatory employee benefits in Italy and supplementary employee benefits.
Mandatory Employee Benefits in Italy
Mandatory employee benefits in Italy are highly complex, and the information below is a simplified outline to give employers a basic idea about some of the required benefits. It is by no means an exhaustive list.
- All Italian citizens are entitled to the national health system. Employers and employees contribute to this system.
- Employees in Italy must make a mandatory pension contribution which can differ by type of activity or profession. Employers and employees contribute to this system.
- Employees must be covered for accidents at work through the mandatory state insurance program, which the national institute manages for accidents at work. The system has the right to recovery from the employer for any accident caused by employer negligence. Employers contribute to this system.
- Regarding short-term sickness, all employees are entitled to have their salary paid by the NHS. The exception is the first three days, which the employer must pay, but not more than five times a year. From day three to day 21 of a short-term sickness, employees receive 50% of their salary, which changes again after day 21. The benefit amount depends on the level of employment. Employers contribute to this system.
It is also important to know that individual labor contracts in certain sectors oblige an employer to buy specific insurance.
Supplementary Employee Benefits
When setting up benefit plans for Italian employees, you must know what the collective labor contracts provide for certain employment levels. There are many national collective agreements for each sector. It is important to ascertain which sectors the employer is part of and, therefore, which level of contract rules must be applied.
Two primary sectors drive most of the basis for labor contracts. The first is manufacturing which includes, amongst others, pharmaceuticals. The second is commerce which includes, amongst others, technical services and IT.
Four employee groups drive benefit design in each sector. The employee groups are executives, middle managers, employees, and blue-collar workers.
Executives in the Industrial Sector
For life insurance, the executive must be insured for a sum of €200,000 in case of death or total disability if they are single and for €300,000 for a family.
Personal accident insurance
For personal accident insurance, the employer must buy executives coverage for five times the annual gross salary for death (AGS) and six times the AGS for permanent disability.
The employer must enroll executives and their families into the FASI fund, which pays medical expenses up to a certain limit. This fund is usually handled through the payroll.
Long-Term Care Insurance
Employers have no obligations for this.
These plans are based on different sub-sectors and contracts like pharmaceuticals, chemicals, and so forth, and there are many rules. The main rule you should follow is that if there are more than 50 employees, the employer must pay TFR (severance fund) into a pension fund or the INPS (Italian institute of social security). A company needs to have an individual company agreement to set up an integrative pension fund plan.
Middle Managers, Employees, and Blue-Collar Workers in the Industrial Sector
For this employee level, the employer is not obligated to provide life insurance, personal accident, medical, or long-term care.
These plans are based on different sub-sectors and contracts like pharmaceuticals, chemicals, and so forth, and there are many rules. The main rule you should follow is that if there are more than 50 employees, the employer must play DTFR (severance fund) into a pension fund or the INPS (Italian institute of social security). For under 15 employees, a company can have an individual company agreement.
Executives in the Commerce Sector
There is a formula employers should follow when it comes to executives in the commerce sector. They should be enrolled in Fondo Antonio Pastore, which covers the following benefits:
- Life Insurance where the insured amount is related to age and gender and decreases with the increase of age
- Permanent disability by illness
- Permanent total disability by illness and accident
- Permanent total disability granting the payment of the savings account
- Long term care
- Unemployment coverage
- Savings account
- Personal accident (covering only up to € 150.000 annual gross salary), the excess salary must be covered through the insurance market
This fund is usually handled through the payroll.
Employers should also buy personal accident insurance for death at five times AGS and permanent disability at six times AGS for the excess of €150,000 salary covered by the Antonio Pastore Fund.
The employer must enroll an executive and his family into the FASDAC fund, which pays the medical expenses up to a certain limit. This fund is usually handled through the payroll.
The employer must set up a pension fund (usually Mario Negri for Dirigenti/executives) and integrative plan paying a total percentage of 15,17 % of the annual gross salary, capped at € 59.224,54 ( 2023) into the fund, and the employee must pay 1% out of pocket. Some companies integrate the basic contribution with a higher percentage. On top of this, the employee can ask the employer to pay the TFR (severance fund) into the same pension plan. This fund is usually handled through payroll
Middle Managers in Commerce Sector
Employers have no obligations for life, personal accident, or long-term care insurance.
Employers must enroll middle managers only into the QUAS fund, which pays medical expenses up to a certain limit. This fund is usually handled through payroll
Retirement is based on different sub-sectors contracts, so the rules are vast. The main one to understand is if there are 50+ employees, the employer must pay into the TFR (severance fund), a pension fund, or the INPS (Italian Institute of Social Security). Employers with under 50 employees are subject to individual company agreements.
Employees in the Commerce Sector
Employers have no obligations to employees in the commerce sector for life insurance, personal accident insurance, medical insurance, or long-term care insurance.
Retirement is based on different sub-sectors contracts, so the rules are vast. The main one to understand is that if there are 50 employees or more, the employer must pay into the TFR (severance fund), a pension fund, or the INPS (Italian Institute of Social Security). Employers with under 50 employees are subject to individual company agreements.
Related Government Websites
- Ministry of Labor and Social Policy and Ministry of Economy and Finance provides general supervision
- National Accident Insurance Institute
- National Health Service runs medical benefits through 20 regional and local health authorities