social insurance

social insurance

Compulsory public-insurance program that protects against various economic risks (e.g., loss of income due to sickness, old age, or unemployment). Social insurance is considered one type of social security, though the two terms are sometimes used interchangeably. The first compulsory national social-insurance programs were established in Germany under Otto von Bismarck: health insurance in 1883, workers' compensation in 1884, and old-age and disability pensions in 1889. Austria and Hungary soon followed Germany's example. After 1920, social insurance was rapidly adopted throughout Europe and the Western Hemisphere. The U.S. lagged behind until the passage of the Social Security Act in 1935. Social Security in the U.S. now provides retirement benefits, health care for persons over a specific minimum age, and disability insurance. Social-insurance contributions are normally compulsory and may be made by the insured person's employer and the state as well as by the individual. Social insurance is usually self-financing, with contributions being placed in specific funds for that purpose. Seealso unemployment insurance; welfare.

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Kela, or Kansaneläkelaitos (in Finnish), also FPA or Folkpensionsanstalten (in Swedish), and SII or Social Insurance Institution (in English), is a Finnish government agency in charge of settling benefits under national social security programs. Kela was founded in 1937 to handle retirement pay, but in the 1980s and 1990s its role was expanded to handle other fields like child benefits, unemployment benefits, sickness benefits and health insurance.

Despite the use of the word "insurance" in the English translation, Kela is funded directly from taxation, not from insurance premiums. Coverage under the scheme is given to all permanent residents of Finland. Kansaneläkelaitos is literally translated as "Institution for National Pension", reflecting its original function as a source for national retirement allowance.

Privacy issues

In May 2008, a Kela e-service apparently disclosed confidential medical insurance information to the wrong client, and subsequently took that service offline.


External links

  • - Official site

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