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Health insurance

Provision of insurance

What is the health insurance provision framework in your jurisdiction? For example, is it provided by the government, through private insurers or through self-funded arrangements provided by employers?

Under Mexican law, everything that employees are entitled to and everything that is binding for employers is handled by and paid into one government institution: the Mexican Social Security Institute (IMSS). 

All employers must register with the IMSS, which provides full government medical coverage, including out-patient, maternity, disability and injury benefits, to all registered employees, as well as retirement and pension plans and daycare services for working mothers. Social security services are financed through fees or quotas, which are funded by employees and employers via withholding – one of the primary obligations of all employers when disbursing salaries. Other than the obligation to register all employees with the IMSS, these social security fees are essential to compliance and workplace stability as they replace employees’ compensation, 401(k) and retirement coverage (ie, all other types of insurance and benefit), while entitling them to health, maternity, injury and disability benefits. The IMSS also provides wages during medical treatments and approved absences. 

This trade-off (a single payment) should be considered in light of the fact that a single legal social security administrative system exists to provide housing and retirement plans, as well as free medical clinics, hospitals, childcare and eligible services to employees and their families. The IMSS also pays for a percentage of an employee’s salary in the event of a job-related accident, illness or temporary or permanent disability, and grants assistance to beneficiaries in case of the work-related accidents or death.

Coverage levels

Do any special laws mandate minimum coverage levels that must be provided by employers?

Yes. Social security law establishes statutory minimum withholding amounts. All employers must register with the IMSS, which provides full government medical, out-patient, maternity, disability and injury benefits to all registered employees, as well as retirement and pension plans and daycare services for working mothers.

Can employers provide different levels of health benefit coverage to different employees within the organisation?

Yes. Employers may offer private insurance to their employees. Otherwise, employees will be covered only by the minimal employer withholding obligations under the IMSS.

Post-termination coverage

Are employers obliged to continue providing health insurance coverage after an employee’s termination of employment?

No. While specific procedures apply to maintain an active status at the IMSS after employment has been terminated, once the employment relationship is over, the contributions that the employer must withhold and pay towards social security also end.

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