Brexit: What will happen to social security and health insurance in 2021?

The end of 2020 will also bring the end of the transition period under the Agreement on the Withdrawal of the UK from the EU. During the transition period between 1 February 2020 and 31 December 2020, the United Kingdom is being treated as if it were still part of the EU from a social security and health insurance perspective. But if no agreement on the structure of the future long-term EU-UK relationships is concluded, this area will be significantly affected.

In the transition period after the UK’s withdrawal from the EU, the EU coordination regulations remain in application (including A1 Forms confirming a worker’s participation in a social security scheme of a particular state) when determining the social security and health insurance schemes the posted worker is subject to and the benefits distributed from such schemes.

If an agreement on the structure of future UK-EU relations is not entered into by the end of this year, the second part of the Withdrawal Agreement will be activated from 1 January 2021, stipulating, among other things, that the EU coordination regulations will newly only apply to those EU and UK citizens who were part of a certain cross-border relationship between the UK and the EU before 1 January 2021 and will only apply during this relationship without any interruption or change. It is expected that the European Commission will provide more detailed information on how individual member states and relevant social security institutions should interpret “without any interruption” and “without any change”.

The European Commission has recently disclosed guidelines on how to proceed after the end of the transition period between the EU and UK as regards workers posted in the framework of the provision of services under the Posting of Workers Directive. These guidelines may also significantly restrict social security and health insurance premiums after 1 January 2021. However, Czech social security and health insurance institutions have declared that they are currently not planning to proceed in accordance with these guidelines; a similar approach is expected to be applied by other EU member states as well. 

For workers posted from the CR to the UK and vice versa before 1 January 2021, no changes to social security and health insurance shall occur in the new year. Over the posting period, all forms issued before the end of 2020 should remain valid, including A1 Forms confirming the worker’s participation in an insurance scheme of a particular state and all other relevant forms (e.g. S1 Forms confirming a worker’s entitlement to full medical care at the state of residence).

The situation of those to whom the above rules will no longer apply from 1 January 2021 will always have to be assessed on an individual basis, taking into account both Czech and UK insurance legislations. Since the CR does not currently have a bilateral social security agreement with the UK, it may happen (similarly as before the accession of the CR to the EU) that employers will have to pay social security and health insurance for the posted workers in both states or that the posted workers will not be insured in either state. However, the UK and the EU currently make every effort to enter into a bilateral agreement at the EU level, which should be legally binding for all member states. 

The wording and scope of this agreement are currently being discussed. If the agreement is concluded before the year-end and enters into effect on 1 January 2021, the second part of the above Withdrawal Agreement will not be activated and cross-border relations between the EU and the UK relating to social security insurance will be governed by the new agreement.


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