Mandatory health insurance in Azerbaijan: Regulations and Updates

 

As it is known, the introduction of the compulsory health insurance system has been launched as a pilot project in some regions of the Republic of Azerbaijan since 2017, and the process is planned to be completed in 2020, gradually applying it throughout the country. However, according to the recent relevant amendments to the legislation, the introduction of compulsory health insurance in the country is scheduled for completion in 2021.

 

As part of the state social insurance, the compulsory health insurance system has established certain obligations related to the payment of the insurance fees and submission of the reports for employers (entrepreneurs), individual entrepreneurs, and employees.

 

According to the legislation, the provisions on the payment of mandatory health insurance fees for employees and their employers are planned to be applied from April 1, 2020, but according to new amendments, this period has been extended to April 1, 2021. Thus, according to the latest amendment, compulsory health insurance premiums must be calculated and paid by entrepreneurs from April 1, 2021.

 

Mandatory health insurance fees in Azerbaijan are defined as follows:

 

• In relation to the employees, from the employer’s side, 2 percent of the employee's salary up to 8,000 manats, 0.5 percent of the employee's salary over 8,000 manats. From the employee’s side, 2 percent of the employee's salary up to 8,000 manats, 0.5 percent of the employee's salary over 8,000 manats;

 

It should be noted that until January 1, 2021, a 50 percent discount is applied to the amount of insurance fees paid from the part of the salary up to 8,000 manats for employees who are not working in the oil and gas sector and work in the private sector. This grace period has been extended until January 1, 2022, according to the latest amendments to the legislation. Thus, until this date, compulsory health insurance fees from the employer’s side on salaries up to 8,000 manats will be calculated in the amount of 1% instead of 2%.

 

• Individuals (individual entrepreneurs, private notaries, members of the bar) who are registered as taxpayers in accordance with the Tax Code of the Republic of Azerbaijan act as insured and pay a health insurance fee of 4% of the minimum wage;

 

• in relation to individuals performing works (services) on the basis of service contracts, the persons who involve them to the works (services) are the insured and pay fee for health insurance in the amount of 2% of the income up to 8000 manats, 1% of the income over 8000 manats.

- In addition to the above-mentioned persons, other insured persons act as insured themselves and pay compulsory health insurance fees in the amount of 48% of the minimum monthly salary for the calendar year from January 1, 2024, according to the latest legislation.

 

At the same time, it should be taken into account that compulsory medical insurance in Azerbaijan does not apply to military servicemen, detainees, persons serving a term of imprisonment and life imprisonment (except for precinct-type penitentiaries) in accordance with the Migration Code of the Republic of Azerbaijan, persons who are residing temporarily or permanently in the Republic of Azerbaijan, foreigners and stateless persons (except for the cases when they are included in the above-mentioned category of subjects).

 

As for payments and reports on compulsory health insurance, it should be taken into account that they will be paid monthly, as in the case of compulsory state social insurance, and quarterly reports will be submitted on the basis of declarations to be added to the BTP software of the Ministry of Taxes.

 

If you have any questions regarding the application of compulsory health insurance legislation, as well as compulsory social insurance payments, tax regulations, please contact us at the following means:

[email protected] 

+994 50 289 89 73 (Mobile and WhatsApp)