Guaranteed income: court rules that restrictions of cover for psychological disorders in collective insurance are discriminatory

Figures from the National Institute for Health and Disability Insurance (RIZIV) show that the number of Belgians who have been at home for more than a year due to burnout or depression has increased by 40 percent over the last four years. At the end of 2021, there were 117,452 Belgian employees, self-employed and unemployed people in this situation out of a total of 485,000 people incapacitated for work. Research by the HR services group Liantis has shown that 69 percent of the surveyed self-employed people experience regular or almost constant stress. Among 18-to-30-year-olds, the figure is as high as 89 percent.

If employees are absent due to illness, they will in principle be paid their full salary by the employer for the first month. This then falls to 60 percent of a capped gross salary, paid by social security. Employers therefore often arrange collective guaranteed income insurance, which increases the pay-out to a maximum of 80 percent of the gross income.

These guaranteed income insurance policies often contain a restriction of cover for psychological disorders. If an employee is incapacitated for work due to a psychological disorder, the pay-out is subject to a time limit (usually two years). Some insurers even exclude certain psychological disorders from any cover.
Over the past two years, rulings on this common insurance practice have been made by both the labour court and the higher labour court on appeal in a dispute between an insured person and the insurer.

In 2016, an employee took sick leave due to depression. She had been traumatised by a difficult childhood. Initially she was able to function, but years later her mental health collapsed. A psychiatric examination confirmed the diagnosis and the expert declared the woman 100 percent incapacitated for work.

The employee had guaranteed income insurance through her employer, but after two years of illness the payments from the insurer ceased. The guaranteed income insurance contract included a time limit on cover for psychological disorders. The employee refused to accept this, and in its judgment of 13 December 2023 the Antwerp Higher Labour Court ruled that a restriction of cover of this kind, applying to psychological disorders but not to other diseases or conditions, breaches anti-discrimination law. The Higher Labour Court found that the distinction made by the policy on the basis of the psychological health of its insured persons was not justified and declared the restriction included in the general terms and conditions null and void. In doing so, it confirmed the previous ruling of the Antwerp Labour Court, Mechelen division, of 11 January 2022.

This judgment may have significant consequences for the insurance sector.
Although restrictions of cover for psychological disorders are common in guaranteed income insurance today and there may be statistical, medical and scientific arguments to justify a time limit or even the exclusion of certain psychological disorders, the Antwerp Higher Labour Court rejected the legal arguments invoked in defence of such restriction of cover. The application of a distinction between psychological and physical disorders in a guaranteed income insurance policy is therefore coming under growing pressure from anti-discrimination legislation.

A working group has been set up within Assuralia for further consultation within the sector.
Insurers will have to examine the arguments cited in the judgment to see whether adjustments are necessary to their current terms and conditions. The possibility of further legal cases in the near future cannot be ruled out.