Changing the rules for settling health premiums. Health Minister says from when and under what rules

The most common complaints from entrepreneurs concerned the complicated rules for determining the basis for health insurance premiums (business income for health premium purposes is determined differently than for tax purposes). Also problematic was the inability to take into account the loss incurred for those who had no income for fortuitous reasons. Entrepreneurs with higher earning capacity pointed out that there was no upper limit on the health contribution base. In addition, it was pointed out that the health contribution actually increases the tax base on which the tax is calculated and at the same time becomes a quasi-tax.

As a result, the new rules for calculating the health premium in many cases resulted in entrepreneurs paying an undue, inflated premium.

Health premium calculation rules should be simplified

The need to simplify the new solutions in this area was pointed out by both the previous health minister and the current government - in the coalition agreement and the plan for the first 100 days of government. Experts, too, point to the need for urgent legislative changes.

When will the tax system be reformed?

Marcin Wiącek asked Health Minister Izabela Leszczyna and Finance Minister Andrzej Domanski for detailed information on the results of analyses conducted in both ministries on the issue. And he also asked for specific proposals for reforming the rules for settling health premiums, as well as an indication of when the socially expected changes in this area are scheduled to be implemented, along with providing the anticipated timetable for legislative work.

There is a response from Minister Izabela Leszczyna

The Ministry of Health is currently drafting a bill to amend the normative acts, aiming to achieve the following results:

1. For persons settling on a general basis using the tax scale referred to in Article 27 of the Personal Income Tax Act of July 26, 1991 (Journal of Laws of 2024, item 266, as amended; hereinafter the "PIT Act"), and those referred to in Art. 30ca of that Law - who receive qualified income from qualified intellectual property rights - the proposed amendments provide for a low flat-rate contribution, which will be 9% of 75% of the minimum wage for all entrepreneurs settling on the tax scale or paying PIT on the aforementioned qualified income, i.e. regardless of the level of actual income earned from business activity.

The introduction of the above normative change will make it possible to reduce the economic burden of the health contribution, which should increase the profitability of doing business. It will also be possible to dispense with the obligation to calculate the contribution assessment base on a monthly basis and the annual settlement, which will eliminate the problem of bureaucratic burdens. The proposed solution will also lead to a significant simplification of the regulation of the health contribution of entrepreneurs settling PIT based on the tax scale.

1. For those settling their accounts in the form of a flat tax, as provided for in Article 30c of the PIT Law, it is proposed to introduce a fixed, low health contribution, which will be 9% on 75% of the minimum salary for entrepreneurs earning in a given month income (calculated from the beginning of the calendar year) up to twice the average salary in the enterprise sector in the fourth quarter of the previous year, including payments from profit, announced by the President of the Central Statistical Office in the Official Journal of the Republic of Poland "Monitor Polski." After exceeding the double of the average salary, the contribution will be 4.9% on the real income, representing the excess over the above-mentioned threshold (double of the average salary).

The proposed solution will reduce the economic burden of the health contribution in the group of entrepreneurs earning income below the proposed threshold (according to the MF's calculations, in the terms of 2024, about 265,000 people, i.e. 53% of taxpayers settling PIT in the form of a flat tax, will earn income below 2 times the average salary), significantly simplify the regulation of the health contribution, and minimize the bureaucratic burden. With regard to the group of entrepreneurs earning income above the proposed threshold, a solution is being designed to eliminate the need for extensive premium accounting, allowing the calculation of the monthly premium assessment base from an amount equivalent to 1/12 of the annual income shown in the last annual Social Security settlement.

Due to the preservation of the institution of the "realized" health premium for income in excess of the proposed threshold, it will be necessary to maintain an annual health premium settlement for this group of entrepreneurs.

1. A fixed, low contribution rate of 9% on 75% of the minimum wage is proposed for those accounting for lump sums on registered income, in the case of entrepreneurs earning in a given month income up to four times the average wage in the enterprise sector in the fourth quarter of the previous year, including payments from profit, announced by the President of the Central Statistical Office in the Official Journal of the Republic of Poland "Monitor Polski." After exceeding four times the average salary, the contribution will be 3.5% on the excess of income over four times the average salary. For this group of entrepreneurs, it is envisaged to maintain the current solution, which allows for the payment of a fixed monthly contribution calculated on the amount of income earned in the previous calendar year (reduced by the amount of contributions paid in the previous calendar year for pension, disability, sickness and accident insurance, if they were not included in deductible costs or deducted from income, pursuant to the PIT Act). The monthly health insurance contribution assessment basis determined in this way will be applied by the insured for the entire calendar year.

The above solutions should give analogous positive effects to the group of entrepreneurs settling PIT in the form of a flat tax (see point 2). Also for this group of entrepreneurs, due to the preservation of the institution of a "realistic" health contribution calculated on income in excess of the proposed sample, it will be necessary to maintain the obligation of annual settlement of the health contribution.

1. For those who apply taxation in the form of a tax card, it is proposed to modify the contribution burden by introducing a lower contribution rate of 9% on 75% of the minimum wage.
2. The change will also cover business associates, who will pay a health contribution of 9% on 75% of the minimum wage.
3. The proposed solutions also provide for the exclusion of income from the disposal of fixed assets from the basis for calculating the health contribution by entrepreneurs settling PIT on a general basis (based on the tax scale or as a flat tax) or as a flat tax.

(...)

It is worth noting that according to the pre-2022 rules, the lump sum contribution in 2025 would be determined as 9% on a base equal to 75% of the average salary in the enterprise sector in Q4 2024 (forecast: PLN 8,517.43/month). This means that in the case of a return to the old rules in place before the introduction of the so-called "Polish Deal," the effect on the public finance sector would be about -10 billion zlotys. Meanwhile, the proposed solutions represent an effect of about -£4.3 billion.

Preliminary calculations further indicate that the structure of the beneficiaries of the proposed solutions would be as follows:
a) on the tax scale and those referred to in Article 30ca of the Law on Personal Income Tax - gains about. 1,288 thousand people;
b) on the flat tax - gains about 493 thousand people;
c) on the flat tax - gains about 600 thousand people and loses about 142 thousand people;
d) tax card - gains about 50 thousand people;
e) cooperating persons - gains about 35 thousand people.

The proposed solutions do not provide for the possibility of taking into account the loss from business activity, since the equivalent nature of the health contribution requires that it be paid at least as a minimum. In the proposed model, such a function of the minimum contribution will be performed by parameterized contributions, i.e. a fixed contribution in the case of entrepreneurs using the tax scale and fixed basic contributions, applicable to entrepreneurs settling PIT in the form of a flat tax or lump sum tax, who do not exceed the proposed thresholds. Since the equivalent of the health contribution is health insurance, allowing the use of the public health care system, it is not justified to introduce the possibility of bringing the size of the health contribution to PLN 0 by showing an economic loss (from the current fiscal year or from previous years). Such a solution would be inconsistent with the normative essence of the health premium, shaped by the principles of solidarity and social justice.

The above-mentioned legal principles also do not allow the introduction of an upper limit on the health contribution in the event of an obligation to pay a "realistic" contribution, calculated on income or revenue exceeding the thresholds proposed in the reform. The principle of solidarity enforces a higher participation in the burden of maintaining the public health care system by those entrepreneurs who are more prosperous and, in doing so, enjoy the conveniences of flat or flat tax institutions.

Systemic tax preferences cannot be used by entrepreneurs settling PIT on the basis of a tax scale - they may be individually entitled to individual tax exemptions of a subjective or personal nature - and therefore, in the case of this group of insured persons, it is justified to limit the burden of the health premium to a parameterized premium, calculated on a fixed assessment basis. It should also be noted that, if only in the case of employees, a higher salary means a higher health contribution burden, and for this group of insured persons the legislator has not introduced an upper limit on the health contribution.

The work currently being carried out by the Ministry of Health in conjunction with the Ministry of Finance to implement the normative proposals outlined above is at the stage of drafting the content of the amendment law, and is therefore prior to submission to the List of Legislative Work of the Council of Ministers. Notification to this list will take place in the coming days. The parliamentary legislative process is scheduled for the 2nd quarter of this year, and the proposed amendments are scheduled to enter into force on January 1, 2025.

At the consultation stage, the draft amendment law under development, together with an explanatory memorandum and Regulatory Impact Assessment, will be submitted to the Ombudsman.

Analyses conducted at the Ministry of Health and the Ministry of Finance have led to the clear conclusion that eliminating the problems requires the implementation of a normative change at the statutory level, Health Minister Izabela Leszczyna points out. She reports that the parliamentary legislative process is scheduled for the second quarter of this year, and the proposed changes are scheduled to come into force on January 1, 2025.

Source: RPO