Ukraine

The number one employee benefit people in Ukraine care about is health insurance. This is considered equally important for both blue and white collar workers  despite the difference between the two sectors. Although state provided medical care is free of charge, it is unfortunately not always deemed sufficient. Private medical care is expensive and the price of medicine is rising.

Asinta Partner
Natalia Zaborovska

MAI CEE

More Info

Average Cost

The average monthly cost of employee benefits for a medium-sized company is approximately 250 Hryvnias for a basic package, 450 Hryvnias for a standard package, and 750 Hryvnias for a superior package.

Medical insurance premiums paid by employers are subject to taxation by the employee. It is considered as income.

Mandatory employee benefits in Ukraine are provided within the state social security system. They include pension benefits, unemployment, death, and short-term and long-term disability resulted from occupational illnesses or personal accident. Supplementary employee benefits in Ukraine include retirement, life insurance, medical insurance and personal accident insurance. Perks range from ‘health days’ to critical illness coverage.

 

Mandatory Employee Benefits in Ukraine

The state of social guaranties in Ukraine are not sufficient to ensure minimum standard of living. In addition to this, the process of obtaining benefits is rather bureaucratized.

Pension

The Ukrainian pension system is based only on the level 1 of the pension provision (PAYG ‘pay as you go’ level). Unfortunately, this system does not guarantee sufficient pension provision, especially taking into consideration the aging of the nation and decrease in the working population.

Six years ago, the pension age was increased up to 60 years. In 2017 pension reform changes included an increase in length of pensionable service, or the ‘modernization’ of pension calculation. Further changes, like implementing the secondary accumulative pension level, are also planned by the government, but the date is not set.

Legislation Leaves

Payments, which are called vacation pay, are formally the salary for vacation days. This provides employees with annual leaves (main and additional) with the preservation of their place of work (position) and salary for their period. Since the employee does not work during the vacation period, the average salary is paid to him during this period.

Paid Time Off

Maternity benefits – These are assigned for the entire period of the maternity leave, provided that the application for benefits took place no later than 6 months from the end of this leave. The total duration of maternity leave is 126 days (70 calendar days before delivery and 56 days after).

  • The basis for the appointment of maternity benefits is the issuance of sick leave issued in accordance with the established procedure.
  • The amount of benefits is calculated based on the average salary for the previous 12 months.
  • These benefits are covered by the state social security fund, and are paid by the employer.
  • In addition to maternity leave benefits, the state assists with costs associated with childbirth.

According to the state budget for 2020, the amount of this help is UAH 41,280. Parents will be able to receive part of the amount, namely UAH 10,320 immediately, and the rest will be paid as UAH 860 per month for 3 years.

In addition to this amount, the family will receive a ‘baby package’ in the amount of UAH 5,000 as a way to support care for the child.

Parents may also be able to use a vacation for childcare up to 3 years by saving up their vacation time. This is unpaid leave however.

Employment Insurance

State social security payments are paid by the employer for employees in the form of a unified social tax of 22% from salary. This tax provides coverage for the pension system, unemployment benefits and short-term and long-term disability benefits.

  • Short-term disability – These work-related benefits are paid in the amount of 100% of the average salary per each day of disability (first 5 days are paid by the employer, the rest – by the state fund). If the disability is not work-related, the amount of payment depends on the employee’s length of service.
  • Long-term disability – The amount of compensation for work-related long-term disability depends on the level of disability and the average salary or minimum income. The level of disability is established by the spherical disability state commission.
  • Unemployment insurance – Compensation from the state fund for unemployment depends on the length of service, average salary of the person before unemployment and the reason of unemployment. This compensation could be also provided as one single payment.

 

Supplementary Employee Benefits

Retirement

Long term life insurance – Additional retirement insurance could be arranged in the form of long-term life insurance. For tax benefit purposes, the coverage should be arranged in the form of additional pension insurance, which has a number of requirements according to the law:

  • -Minimum period of coverage – until official pension age +/- 10 years
  • No prior cancellation (except for death, disability, critical illness, move for leaving abroad)
  • -Beneficiary – only the insured employee or dependents

In other cases, the employer has to pay the following taxes: unified social tax of 22%, personal income tax of 18% and military tax of 1.5%. This is mostly used as an instrument of social package by corporate clients.

Group Life Insurance

Territory of coverage: Ukraine or worldwide.

Limits: salary based (usually up to 3x annual salaries) or fixed amounts.

Scope of coverage:

  • Death resulted from any reason (PA or illness);
  • Invalidity of I, II and III groups (permanent disability);
  • Injuries & traumas (with % of compensation according to the Table of traumas) / Temporary disability (fixed % of compensation per day of disability).
  • Critical illnesses (cancer, heart attack, brain attack and the like), the list from 6 up to 32 illnesses.

Premiums are usually paid by employer and costs depend on group size, occupation, gender and age of each employee.

Healthcare

There is no obligatory state medical insurance. In theory medical help is free of charge, but on practice it requires a lot of out-of-pocket expenses or applying for private medical help.

Voluntary medical insurance – This is a very popular solution to provide a sufficient level of medical help for employees. Now it is available on the market mostly in the form of group medical insurance for the corporate clients. Medical insurance for individuals is less affordable.

Typical medical insurance plans include:

  • Out-patient treatment
  • In-patient treatment
  • Emergency care
  • Providing with medicines
  • Dental care
  • Additional options include treatment of critical illnesses, preventative check-up, and maternal care.

Premiums are usually paid for by the employer and costs depend on group size, level of clinics covered (state/ departmental, private clinics of different level) and the scope of the medical plan.

Personal Accident Insurance

Territory of coverage: Ukraine or worldwide.

Period of coverage: 24 hours a day (preferable) or working hours only.

Limits: salary based (usually up to 3x annual salaries) or fixed amounts.

Scope of coverage:

  • Death as a result of personal accident
  • Invalidity of I, II and III groups (permanent disability)
  • Injuries & traumas (with % of compensation according to the Table of traumas) / Temporary disability (fixed % of compensation per day of disability)

Premiums are usually paid for by the employer and depend upon group size and employee occupation.

Business Travel Insurance

This insurance has a few forms including single policies, part of group medical coverage, or separate corporate business travel insurance policies.

Scope of coverage:

  • Medical costs
  • Personal accidents
  • Assistance
  • Third party liability
  • Baggage insurance
  • Financial risks (trip cancellation)
  • Business travels within Ukraine

 

Employee Perks

Voluntary medical insurance could offer different additional options, some of the most popular being:

  • Coverage of exclusions from the agreement. These are usually offered within certain corporate limits and could include things like prosthetic devices.
  • ‘Health Days which are preventive health checkups arranged in the office.
  • Wellness benefits including access to swimming pools, gyms or compensation of gym membership.
  • Lectures from the doctors or first aid training workshops in the office.
  • Coverage for a certain limited number of critical illnesses (cancer, coronary artery bypass surgery, heart valve replacement or repair, neurosurgery, live-donor organ/tissue transplant) in the leading specialized clinics outside Ukraine. This is a separate insurance product called ‘worldwide medicine.’

Administrative Organizations

Ministry of Social Policy (https://www.msp.gov.ua/) is responsible for policy and provides general coordination.

Pension Fund (http://www.pfu.gov.ua/) administers pensions.

State Fiscal Service (http://sfs.gov.ua/) collects contributions.

This information about employee benefits in Ukraine is provided by MAI CEE, Asinta’s employee benefits consulting Partner in Ukraine.

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