Examples of local implementation
MNEs engagement in extending social security examples of practices
15
Figure 5. Overview of the legal provisions regarding medical care, maternity and sickness benefits
in Indonesia
Contingency Scope of coverage Benefit package
Payment of Benefits Entitlement Conditions Medical Care Social insurance
Jamsostek for: Employees of firms with 10
or more employees or a monthly payroll of at least
1 million rupiah Employees with labour
contracts of less than 3 months are excluded.
Medical benefits are paid to dependents dependent
spouse and up to 3 dependent children who
are unmarried and unemployed and younger
than 21 Employees with employer-
provided benefits that are more comprehensive
than those provided by the Jamsostek program
are exempt. ■ Primary and specialist
consultations ■ Hospitalization
■ Medicine ■ Emergency
■ Dental and Eye Care ■ Medical maternity care for up to
3 children, up to 500,000 for each
■ Cost of eyeglasses, hearing aids, and prostheses are
reimbursed up to a maximum Inpatient care is
provided for up to 60 days a year
Must register with a primary care provided who is under
contract with Jamsostek. Referrals are necessary to
access specialist and inpatient care except for
emergencies. Medical benefits for
dependents are the same as those for the insured.
Sickness No cash benefits are provided
Maternity No cash benefits are provided
Source: table elaborated by the authors, data sources detailed in appendix.
Mexico In 2013 all Mexican subsidiaries of the Danone company
11
were part of the Dan‘Cares programme and had put in place social health protection in line with Dan‘Cares
guidelines for their 14,900 employees. The first Mexican subsidiary to put in place the programme was Bonafont in 2011. Bonafont anticipated a reduction in staff turnover as a
potential outcome of the programme; at the time the company had high staff turnover. Indeed, social health protection corresponded to a need expressed by employees. The other
two subsidiaries both joined in 2013.
In the Mexican context, Danone is one of the few employers who provides such complementary medical care coverage for all its employees, and particularly to both
managerial and non-managerial positions. When undertaking the stocktaking, this was not identified as a local practice. The stocktaking phase brought to light the fact that the main
gap to be filled in order to be in line with Dan‘Cares guidelines concerned the accessibility and quality of care. As mentioned in the table above, the national mandatory scheme in
Mexico comprises a comprehensive package with both inpatient and outpatient provisions in the related public facilities. Danone employees reported uneven quality and
accessibility levels of those providers. Many employees reported that they seeked medical care in private facilities at their own expanses.
11
Bonafont for the water business line, Danone de México for the fresh dairy products business line and Danone Medical Nutrition Mexico for the medical nutrition business line.
16
MNEs engagement in extending social security examples of practices
The change brought by Dan‘Cares is the fact that now employees have the choice of healthcare providers. Danone pays their contributions to both the national health insurance
scheme, which ensures employees access to public facilities, it also pays their premium to a private health insurance, which ensures employees with access to private facilities. The
latter is in line with Dan‘Cares guidelines
12
: –
inpatient and maternity care are covered with no out-of-pocket payment; –
outpatient care is covered with low out-of-pocket payment the level of OOP depends on the medical act but does not go beyond 20 percent of total cost threshold set by
Dan‘Cares guidelines; –
there is a third party paying mechanism as well as a zero co-payment policy put in place with empanelled hospitals.
The company pays 100 percent of the cost of private insurance premiums for workers. The scheme does not cover dependents for the moment. Danone subsidiaries in Mexico
conduct a bid every year to select a common insurance provider. All the country business units benefited from the headquarters fund dedicated to kick-start the implementation of
the Dan‘Cares programme during the two first years of implementation. In the case of Bonafont, it financed a third of the costs during the first year, then 20 percent for the
second year.
Since the plan is paid entirely by the company and the Dan‘Cares programme was part of a global decision of the Group, it was not integrated as a subject of negotiations
with the local unions. Still, in Bonafont for instance, the union which is affiliated to the UITA was a key partner in the implementation of the programme, especially regarding
awareness-raising efforts and communication with employees regarding their new benefits.
The main challenges faced by the programme in its local implementation were related to communication. Though an important effort was made when the programme started,
including the intervention of the insurance provider on site, some workers are still unaware of the extent of their benefits. The HR staff of the company noted that, rather than just
incorporate a communication effort at the beginning of the programme, regular communication and updates were necessary.
The main success of the Dan ‘Cares programme in Bonafont was to demonstrate that
there was a business case for such complementary social health protection at the enterprise level, which helped the dissemination of the programme in other Danone entities. Indeed,
in the case of Bonafont, the programme has demonstrated that it is a win-win situation for both employers and workers and it reached financial sustainability. When the programme
was implemented, staff turnover dropped 30 percent in a year and employees expressed their satisfaction through the regular opinion survey. The drop in staff turnover is an
important positive effect of the programme since staff retention is an important issue in Mexico where Danone has to compete with other big enterprises but also with the informal
economy to some extent. Since the drop in staff turnover, client service level
13
has increased by 1 percent. According to the respondents, the programme also has a positive
12
A few exclusions on the insurance contract include aesthetic surgeries, aesthetic dental care and optics.
13
Average quality of service reported by clients.
MNEs engagement in extending social security examples of practices
17
impact on productivity and return on training investments made on staff, but no data is available
14
. In the long run, the challenge will be to try to respond to the expectation of employees
to have their dependents covered as well. The cost of such an extension was evaluated but it remains the main issue for the extension of the programme to the dependents at this
stage. From the point of view of Mexico‘s social protection system, since the scheme is providing benefits in private facilities, in parallel to the public scheme providing benefits
in public facilities, it is unlikely to put pressure on the national health scheme for service improvement.
Indonesia Danone has seven subsidiaries in its four business units in Indonesia
15
with 20 production sites and 14,000 employees. Following the launch of the Dan‘Cares
programme, the Indonesian subsi diaries decided to implement Dan‘cares in 2011. In 2013
all Danone employees in Indonesia were covered according to Dan‘Cares guideines. When the stocktaking was done, employees reported paying for healthcare out of their
pockets and having poor access to proper healthcare services, including in public facilities. The health insurance package provided in the framework of the Dan‘Cares programme was
built on the basis of this information. The health insurance package includes inpatient, outpatient and maternity care
16
with no or low less than 20 percent of the cost OOP
17
in both public and private medical facilities in the country. It should also be noted that
Danone has its own medical facilities providing outpatient care in its factories. For hospitalization and maternity, there is a third party payment mechanism in place. For
outpatient care, there is reimbursement method in place.
The programme includes coverage for the dependents to a maximum of four family members. This follows the country‘s local practice see figure 5. The number of
dependents included in the plan corresponds to the State guidelines and policies on demographics and family planning. Most competitors provide some complementary health
insurance and equally cover four family members.
The full cost of the health insurance plan for the workers and their family is borne by Danone. The risk is borne by a private insurer. In order to select a common insurer, the
four subsidiaries organized a bid. During the first two years of implementation of the project, Danone subsidiaries in Indonesia benefited from the special fund made available
by headquarters before reaching financial sustainability.
14
This is related to the fact that: a not all business units collect this type of indicators, or they often do not do it using the same method; b it is difficult to isolate the impact of the new
healthcare provisions on this type of indicators.
15
Aqua PT Indonesia for the water business unit, Danone and PT Dairy Indonesia for the fresh dairy products business unit, PT Sari Husada, PT Sugizindo and PT Nutricia Indonesia Sejahtera for the
baby nutrition business unit and PT Nitricia Medical Nutrition for the medical nutrition business unit.
16
The exclusions of the package are: aesthetic and laser surgeries, unless there is a strong mandate from the doctor to do so for health related issue.
17
Depending on the pathology, following regular pattern of the higher the risks category, the lower the out-of-pocket payments.
18
MNEs engagement in extending social security examples of practices
There are trade unions present in some Danone subsidiaries in Indonesia in Danone fresh dairy products business unit there are workers representatives who meet with the
direction every other month. Workers representatives were not called in to negotiate the design of the health insurance plan but rather to support communication to employees at
the implementation stage and to provide feedbacks on implementation. So far, feedbacks were good and employees reported a greater access to quality medical facilities and
services.
When the programme was launched, a significant communication plan was put in place. It included meetings at the various plants, announcements through boards and
emails and a clear documentation on what was included or excluded by the health insurance plan.
Since the implementation of the programme, no impact study has yet been conducted. Still, the perception of Danone‘s HR services in Indonesia is that there is an improvement
in attendance, productivity and staff turnover, though no data has yet been collected to support this perception. The Dan‘Cares plan seems to contribute to the wider retention
policy which is a core part of Danone HR policy worldwide and a common HR practice, especially among MNEs led by the company in Indonesia. The main perceived success of
the programme is its ability to differentiate Danone as a committed employer in Indonesia,
since it provides not only Dan‘Cares but also survivor‘s insurance and yearly medical checks. The fact that the health insurance has been set as a global programme was also
mentioned as a determinant factor of differentiation in the perception of workers. More information on impact will be available when the Danone People Survey is conducted in
OctoberNovember 2013 in Indonesia.