A mutual is a non-profit association that collaborates with Social Security in the management of professional benefits, temporary disability or cessation of self-employment activity.
They were born initially with the purpose of dealing with accidents at work, since then they have evolved and increased their skills.
What are they in charge of?
The mutuals currently cover several coverages and benefits in addition to work accidents, they manage:
• Temporary disability benefits for common contingencies.
• Benefits of risk during pregnancy and during natural lactation.
• Close the activity to workers autonomies.
• Benefit for care of minors affected by cancer or serious illness.
In conclusion, they manage accidents at work, professional illnesses and occupational risk prevention and improvement of working and health conditions in companies.
Are they mandatory or voluntary?
Both companies and freelancers are required to have a mutual for temporary disability due to common contingency of their workers.
On the other hand, the coverage of professional contingencies with a Mutual is totally voluntary, being able to opt for the protection of contingencies through a managing entity of the Social Security or a Mutual.
If the employer opts for a Mutual, he must sign an Association Agreement, which will collect the rights and obligations and whose term will be one year.
How are they financed?
The Mutuals are financed from the contribution of two independent quotas: one, for professional contingencies, and another, for common contingencies.
The management of common contingencies is financed through work accident premiums contributed only by the employer and collected by the General Treasury of the Social Security.
The contribution for accidents at work and professional illness is made by applying a rate according to the economic activity of the company, through the National Classification of Economic Activities.
The management of common contingencies is financed through a percentage or fraction of the quotas for common contingencies, which are the responsibility of employers and workers and collected by the General Treasury of the Social Security.
Do mutuals make a profit?
For us it is very important that you know that mutuals are not associations that obtain profits.
In the management of common contingencies, the Mutuals allocate a Stabilization Reserve that will have a minimum amount of 30% of the annual average of the fees paid in the last three years. This percentage can rise up to 45%.
The resulting surplus after provisioning the reserve is applied as follows:
• 80% is allocated to the Social Security Professional Contingency Fund, assigned for Social Security purposes.
• 10% will be applied to the endowment of a Complementary Reserve.
• The remaining 10% is allocated to a Social Assistance Reserve for the payment of authorized social assistance benefits.
In the management of common contingencies, the Mutuals provide a Stabilization Reserve that will have a minimum amount of 5% of the contributions paid during the year and the surplus will be paid into the Social Security Reserve Fund.
Now that you know what mutuals are, if you want more information on labor issues, at Audacia Lawyers we advise you, do not hesitate to contact us for a consultation.