RESTRICTED  
 
WT/BFA/W/370  
28 July 2015  
(15-3897)  Page: 1/25  
Committee on Budget, Finance and Administration  Original: English  
 
  REPORT OF THE WORKING GROUP ON AFTER SERVICE HEALTH INSURANCE (ASHI) 
1  INTRODUCTION 1.1.  On 11 April 2014, the Committee on Budget, Finance and Administration established the 
Working Group on After Service Health Insurance (ASHI) in light of then recently introduced new 
accounting practices under the International Public Sector Accounting Standards (IPSAS) which requires ASHI liabilities to be reflected in the accounts. Most recently the liability was estimated to 
be CHF 343 million.
1 The future liability is estimated to grow considerably over time rising to more 
than CHF 1.4 billion by 2050. 
1.2.  The Working Group was mandated with the following terms of reference: 
a. The Working Group will review the WTO post -employment Medical Insurance Plan with a 
view to making recommendations to the Committee on Budget, Finance and 
Administration (CBFA) on the long term financial viability and sustainability of the Plan and proposing any actions or changes that might be necessary to achieve such. 
b. In carrying out its work the Working Group may seek the input of the WTO Management, 
the Actuary, the WTO internal Medical Insurance Management Committee, and any other relevant body. 
c. The Working Group will submit its report to the Committee on Budget, Finance and 
Administration before 31 December 2014 and will apprise the CBFA of its work periodically during the year. 
1.3.  At the 21 November 2014 CBFA meeting, the Working Group requested an extension of its 
mandate until 30 June 2015 due to the complexity of the issues and the need for input from 
external sources and further consultation with stakeholders. 
1.4.  This document is intended to report on the substance and process of the Working Group and 
make recommendations to the CBFA on steps that will address the long term viability and 
sustainability of the WTO Medical Insurance Plan  (Plan) and the After Service Health Insurance 
Benefit offered to elig ible former staff. 
1.1  Summary and Recommendations 
1.5.  The provision of after service health insurance by the WTO, and international organizations in 
general, is a long established practice driven in part by the fact that retirees from these organizations may not have had access to other post-employment medical coverage. 
1.6.  The promise of providing an ASHI benefit to retired staff (and their families) creates a 
financial liability for the Organization. Because the WTO is a relatively young organization, the demographic profile of the organisation will result in particular challenges in terms of the 
sustainability of ASHI as the number of retirees co ntinue to increase over the years to come. This 
demographic evolution in the profile of the Plan's participants is currently projected to result in a future liability and budgetary costs that in the view of the Working Group are financially 
unsustainable. Currently, the ASHI liability would be projected to grow to as much as CHF 
                                               
1 This valuation is based on 2014 data received in May 2015. All other analysis and projections 
contained in this report are based on the 2013 data av ailable over the course of the Working Group's work . WT/BFA/W/370 
 
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  1.4 billion by 2050 if no action is taken. Irrespective of the ASHI liability it is estimated that 
continuing on the current 'Pay as you go' basis without any efforts to control the growth of costs would mean that by 2050 the annual costs of maintaining the current plan would be over CHF 62 million in total for in service and after-service health coverage for staff and retirees (and their 
dependents). Of this total amount CHF 36 millio n would be borne by the WTO and CHF 26 million 
would be borne by staff and retirees. 
1.7.  The Working Group, consisting of participating WTO members and WTO Secretariat, held 13 
meetings since 29
th April 2014, over the course of which it: 
a. Examined the benefits associated with the ASHI Plan and held discussions with current 
the Medical Provider, Cigna, concluding that the major drivers of the Plan's premiums were hospitalization charges, doctors' fees and medication costs; 
b. Examined the medical coverage schemes available to other comparable international 
organisations and found the medical coverage available to staff of the WTO to be generally consistent with that offered by other international organizations in most 
respects. The working group also noted the attempts made by other international 
organisations in addressing the problem and concluded that the success or otherwise in tackling the problem was often dictated by the ambition and level of importance that 
stakeholders in other organisations attached to the problem; 
c. Considered the primary purpose of the ASHI Plan noting that there is a lack of clarity as 
to what the ASHI seeks to achieve. The rationale for ASHI appears to informally suggest that the purpose of the Plan is to form part of a competitive reward package for 
recruitment and retention of employees while also ensuring that retired staff continue to 
have access to quality healthcare. The Working Group considers that these objectives are not necessarily mutually supportive and that greater clarity in this respect would 
assist any change process underpinning the future sustainability of the plan and assist 
also the future management of the plan in terms of what benefits should be retained, terminated or introduced as part of the process; 
d. Held discussions with the Actuary and considered estimates provided by the Actuary of 
the future costs of the Plan and noted that while actual future costs of the plan are 
uncertain, given the projected changes in the demographic profile of the participants in the WTO Plan and the increasing costs of medical coverage in general, significant steps 
will have to be taken to address the long term sustainability of ASHI benefits and the 
Medical Plan. The scale of the problem necessitates some combination of significant cost control and funding reform will be necessary in order for the Medical Insurance Plan and 
the ASHI benefits to be sustainable in the long term; 
e. Examined the potential for greater cost controls and recognised that while a general 
approach to cost control is already part of the existing management of the Plan (as a 
self-insured plan, premiums experienced by sta ff directly reflect the level of claims made 
against the Plan) more must be done to ensure that future costs are controlled in a profound manner and this will require an e ffective awareness exercise to ensure that 
staff and retirees are well-informed of the se lf-insured nature of the coverage and the 
need for ASHI to become sustainable so as to ensure ongoing access to quality 
healthcare into the future. Meaningful cost control will require efforts to address the major drivers of the Plan's premiums such as  hospitalization charges, doctors' fees and 
medication costs. The Working Group recommends that the cost control options set out 
in Annex 1 be explored and that having consulted with the Actuary and Cigna, the Working Group is confident that there is significant scope to control costs in a manner 
which continues to ensure access to quality healthcare while also achieving financial 
sustainability. The Working Group does not consider the options in Annex 1 to be exhaustive and urges that all potential areas for cost control are examined; 
f. Examined the scope for additional funding in  support of ASHI. Funding of the Plan is 
currently on a pay-as-you-go approach that does not reflect the accruing liabilities 
associated with the ASHI benefit. Although, the current model is sufficient to address expenses in a given year, the current funding structure is not sufficient to address the WT/BFA/W/370 
 
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  growing financial liability of the ASHI, nor does  it prepare for future trends which will see 
radically higher expenditure being required to support claims. Notwithstanding that a 
costs control exercise as outlined above will reduce future expenditure levels, the Working Group considers it prudent to identify  options for additional sources of funding 
and where possible, setting aside such funds to help provide for future claims at a period 
of peak demand. One option would be to establish a specific mechanism for setting aside assets to fund future costs. If such a mechanism is established it will be necessary to 
identify how those assets will be managed an d under what conditions such a fund could 
be drawn upon. The Working Group is of the vi ew that any such fund should be available 
to smooth future budgetary impacts when most required and considers it important that detailed monitoring and reporting of the fund is established. Furthermore, the fund 
should be protected and not be capable of be ing used for any other purpose. Allocations 
to the fund should also form part of th e WTO's annual budgetary process and include 
examination of whether any other budgetary savings could be allocated to the fund; and 
g. Considered the human resources required for management of the change process being 
proposed as well as the future management  of ASHI. Given the financial and budgetary 
implications of the Plan and the ASHI benefits, it will be important to devote sufficient 
financial and qualified staff resources to actively managing the Plan, its estimated long 
term liabilities, and any assets that may be set aside to stabilize the financial and budgetary consequences of providing coverage via the Plan. 
1.8.  The Working Group concludes that there is  no easy solution to the problem and that a 
multi-faceted strategy should be developed to be methodically implemented over time. This will 
require thorough analyses of how various factors and combinations thereof could affect the long term projections for the after-service liability in particular and the WTO budget in general. 
1.9.  In light of the need for a more carefully refined and detailed analysis of the projected impacts 
of various options and combinations of options,  the Working Group recommends that the CBFA ask 
the Director-General to develop a strategy in line with the recommendations of this Report and 
building upon the Working Group's consideration, to be concluded within 12 months of the CBFA's 
consideration of this Report. The Working Group also makes a number of recommendations concerning the key elements of such a strategy, and how it should be developed, implemented and monitored. The strategy should also contain target s towards the overall goal of halting the growth 
of the liability and setting the ASHI plan on an affordable footing. 
1.10.  The Working Group recognises that an y strategy development process will require 
consultation with all stakeholders. There will need to be a process for consultation with 
stakeholders and particularly staff and retirees re garding emerging proposals for sustainability. To 
assist the Secretariat with regard to consulting with one group of stakeholders, namely WTO Members, the Working Group suggests that the CB FA mandate a new Working Group to liaise with 
the WTO Secretariat in this respect over the course  of the strategy's development. Thereafter, and 
in light of the technical nature of the subject ma tter, the CBFA may wish to utilise the experience 
developed by that Working Group's members and extend its mandate to assist the CBFA in monitoring the implementation of the strategy. 
1.11.  The Working Group's recommendations concerning the foregoing are set out in Section 6. 
1.2  Background of the Plan 1.12.  From 1949 to 1989, serving staff members were insured under the United Nations Mutual 
Insurance Society against sickness and accident. The Organizations participating in this insurance 
were the United Nations Office at Geneva, the World Meteorological Organization and the GATT. 
1.13.  In 1967 health insurance coverage was extended to retired or separated disabled GATT staff 
members and dependants, following a recommendation by the United Nations (document L/2848). 
This decision was mainly based on the fact that after retirement, officials of International Organizations had in most countries no rights to health protection under national social security schemes. Although the health insurance plan ha s undergone several changes, this element has 
remained constant since its introduction. The Working Group notes that national social security WT/BFA/W/370 
 
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  schemes have evolved since then and some may now offer inclusion of expatriated nationals back 
into national systems. 
1.14.  In 1995 the WTO concluded a Headquarters Agreement with the Swiss Confederation. 
Articles 16.1 and 16.4 of this Agreement exempt th e organization, as an employer, and officials of 
the WTO, as individuals, from Swiss legislation regarding compulsory sickness insurance. Staff 
Regulation 8.2 requires the Director-General to establish a scheme providing for the coverage of medical expenses incurred by staff members and their families as a result of sickness or accident. 
1.3  Principles of the Plan 
1.15.  Soon after the founding of the GATT Secretariat, the then GATT began offering to its 
employees a package of benefits that includes subsidized medical coverage. While the specific benefits have evolved over time, the Organisation  has always striven to provide medical coverage 
which was not only adequate but also attractive compared to those of its main competitors for 
talent, i.e. other international organizations. 
1.16.  By accepting to work in the internationa l civil service many employees find themselves 
ineligible for health insurance under national social security or private schemes upon retirement. 
Therefore, the WTO, has ensured that staff members, when they retire, are not worse off than they would have been if they had not accepted employment at the WTO in terms of access to 
healthcare. In response to this situation, the WTO - as have all other international organizations – 
has undertaken to provide such insurance at subsidized rates. 
1.17.  The current Plan has been designed consiste nt with the fundamental principles of solidarity 
(including inter-generational solidarity) and distribu tional equity while bearing in mind the need for 
the WTO to offer a competitive benefits package. Therefore, the WTO is resolved that the basic 
coverage will be the same for everyone participating in the plan while the financial burden may be distributed among the plan participants and the WTO in a way that takes into account the financial 
capability of the plan participants and the effect the cost and level of benefits could have on 
recruitment and retention. 
1.18.  The Working Group considered what the pr inciples of the Plan in general and the ASHI 
benefit in particular should be. The main considerations were whether the main objective of the 
Plan should be ensuring access to quality medical coverage for staff and retirees; or if in addition the objective should further be to contribute to the WTO having an attractive package of benefits to aid in recruitment and retention. The Working Group does not suggest that the two objectives 
are mutually exclusive but notes that neither are th ey necessarily mutually supportive. In the face 
of undertaking a challenging exercise to ensu re the plan is sustainable the Working Group 
suggests that a clear principle should be established which focuses on the need to ensure access to 
quality healthcare while taking into account the limited resources of all stakeholders and notes that 
the utility in using ASHI as a component of an attractive rewards package needs to be weighed 
against other more tangible elements of the rewards package. 
1.4  Scope and Coverage of Existing WTO Medical Insurance Plan 
1.19.  With effect from May 1993 the group sickness insurance plan contracted with J. Van Breda 
& Co. entered into force (document (93)20). Cigna, a Philadelphia, Pennsylvania-based insurance company acquired Vanbreda International in 2010. Vanbreda International has now been 
rebranded as Cigna.
2 
1.20.  The current medical insurance plan contract with Cigna was entered into following a 
competitive procurement process and became effective 1 January 2011. It provides worldwide 
coverage for reasonable and customary expenses relating to medical and pharmaceutical 
treatment resulting from illness, accident and maternity, preventive care, long term care benefits and dental treatment, for active and retired staff and their dependants (whether or not they reside 
in Switzerland). Preparations for the next competitive procurement process have been launched 
and will include a review of benefits with a focus on potential cost control measures. 
                                               
2 Vanbreda/Cigna is technically the broker and claims administrator. The insurance element which 
mitigates the impacts of high-cost cases is underwritten by Allianz. WT/BFA/W/370 
 
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  1.21.  As of 31 December 2013, 2115 persons were insured.3 Since the inception of the Plan, in 
1993, the overall population of insured persons ha s doubled. The active population has increased 
by 184% and the retired population has increased by 333%. 
1.22.  The following chart shows the evolution in the population by category of insured person 
from 1993 to 2013. While, there are several issues  for the Plan that revolve around changing 
demographics, the most salient demographic issue is that the number of active staff is expected to stay relatively stable while the number of retirees w ill continue increasing for many years. This will 
lead to a significant shift in the ratio of active staff to retirees. A further discussion of the 
implication of this demographic evolution can be found below in Section 4 of the report. 
Figure 1 Evolution of insured population 
05001,0001,5002,0002,500
1993 2001 2003 2005 2007 2009 2011 2013Number of Insured PersonsEvolution  of Insured Population
Active staff (with
dependent)
Retirees (with
dependents)
Grand Total
 
 
1.5  Comparison of benefits with other IGOs 
1.23.  The Secretariat provided the Working Group with information (represented in the table at 
Annex 2) comparing the benefits package of the WTO with information on the benefits packages of 
other international organizations. In a meeting with the ASHI Working Group on 
23 September 2014, Cigna indicated that in its view the WTO plan is broadly comparable to and competitive with the medical benefits provided by other international organizations in the Geneva 
area. The Working Group observed that although  there may be some aspects where the WTO is 
more favourable than others and some where it is less, overall there was no evidence to suggest that the WTO Plan was outside the norm.
4 
1.24.  In evaluating the comparison it is also impo rtant to recall that Cigna explained that it is not 
always easy to link a specific component of coverage to a specific portion of the premium. Premiums are driven by actual claims experience. In the case of the WTO, hospitalization, regular 
doctor's visits, and medications are the major drivers of the premiums. 
1.25.  The other IGO's are also dealing with the issue of how to manage the ASHI liabilities 
associated with providing a medical plan with benefits for retirees. Many international 
                                               
3 The number of insured persons can vary throughout the year and therefore might be reflected 
differently in different information received  from the insurer on the use of benefits. 
4 The Working Group also takes note of the advice from Cigna that the mere existence of a seemingly 
generous benefit will have no impa ct on premiums, and hence costs, if  very few people actually use the 
benefit. Costs are linked to actual consumption of a pa rticular benefit. Cigna cite d the international coverage 
element of the Plan as an example of this. While it might sound like an expensive benefit, because relatively 
few people seek coverage ou tside of the Geneva region and the fact th at medical costs are high in Switzerland 
relative to the rest of the world, this benefit is not a significant driver of costs within the Plan. WT/BFA/W/370 
 
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  organizations (and governments) have been studying the issue and developing various approaches 
to managing their liabilities. The Working Group also sought to inform itself of the approaches of the other international organizations in its analysis of what it could recommend for the WTO.
5 In 
most cases, the approach of the other IGO's has in volved efforts to address the funding side of the 
equation by establishing ASHI reserve funds of one kind or another. These organizations have 
varied in their ability to successfully develop longer term mechanisms to consistently fund the estimated liabilities. So far, few have made significant changes in benefits offered within their 
medical plans. At least one, the OECD, has significantly reduced other staff expatriate benefits in 
order to free up additional resources for ASHI funding. 
2  THE WTO'S AFTER SERVICE HEALTH INSURANCE LIABILITY 
2.1.  Since 2012 the WTO has used International Public Sector Accounting Standards (IPSAS) to 
guide its financial reporting. Unde r IPSAS, organizations must report  full estimated liability at the 
end of a reporting period for employee benefits, including the long term liabilities associated with defined benefit plans. The WTO's medical insurance plan constitutes a defined benefit plan with 
long term liabilities because, like the pension plan, it promises to make a payment on behalf of 
eligible staff members at some point in the future for a benefit that is defined today but whose cost is not yet known.
6 
2.2.  This is a form of deferred compensati on. In exchange for foregoing some current 
compensation, employees accept that they will rece ive compensation in the future in the form of a 
pre-defined benefit. The risk that the benefit promise may cost more or less than anticipated resides with the employer and is a real financial ri sk. If the benefit costs less the employer realizes 
a gain. If the benefit costs more, the employer realizes a loss. 
2.3.  Therefore, under IPSAS 25, the After Service Health Insurance (ASHI) liability of the WTO 
must be recognized on the organization's Statement of Financial Position. Thus, the current service 
cost and interest costs are reflected as expenditures on the organization's Statement of Financial 
Performance, as of the 2012 financial reporting. 
2.4.  For most employers the actual cost of thes e benefit promises has been more than predicted. 
This can be attributed to rising life-expectanc y and a general misunderstanding of the difference 
between current costs (pay as you go) and full costs (pay as you go plus the accrual of the costs of future benefits earned in the current period). Therefore, most employers have under-estimated the eventual impact of these benefit promises on thei r financial situation. It is for this reason that 
IPSAS requires that the full estimated cost of bene fit promises be disclosed even if those costs do 
not constitute a cash payment in the current period. 
2.5.  Currently, the WTO only budgets for the ac tual cash (pay as you go) costs of the ASHI 
expenditure in any given year and not the full service and interest costs necessary to guarantee 
the promise to provide the insurance in the future. It is in this way that the Organization may report a budgetary surplus even when it has a significant accounting deficit. This point is often 
confusing to Members and staff. 
2.6.  As noted above, the actual future costs cannot be known with any certainty. However, the 
Organization must plan appropriately for the futu re. Therefore, the Organization uses actuarial 
assumptions (discussed below in Section 3  the present value of the costs of the overall liability as 
well as the service and interest costs. For this reason, the financial statements of the Organization 
will be impacted by actuarial gains and losses from  one period to another. For example, changes in 
life expectancy or other demographic characteristics of the population, changes in the discount 
rate and changes in the rate of medical inflation may make the liability seem larger or smaller in 
any given year. 
2.7.  IPSAS requires the reporting of the liability to give stakeholders a sense of what the cost 
would be if the organization ceased to exist and an amount of funding needed to be put aside to 
                                               
5 In its meeting with the Working Group, Cigna observ ed that across their clie nts there is a range of 
approaches to ASHI from fully subsidized coverage for reti rees to no retiree eligibility for the Plan. They also 
indicated there is a trend to link the benefit level more closely to years of service, similar to a pension benefit. 
6 However, unlike the WTO Pension Plan the WTO Medical Insurance Plan has not set aside assets to 
fund those benefit promises. WT/BFA/W/370 
 
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  provide for the future ASHI benefits acquired to th at point by current staff and retirees. However, 
because the actual liability will only arise if an organization shuts down, the reported liability can only be an estimate and does not necessarily have much of an implication for the year-to-year operational costs of the Plan in an on-going entity. However, a higher unfunded liability implies 
certain interest costs that do impact the annual accounts as they are included in the actuarial 
gains or losses reported on the Statement of Fina ncial Position, the Statement of Net Assets/Equity 
and the Statement of Cash Flow and as part of staff expenditure in the Statement of Financial 
Performance. The next section elaborates on the details of how the liability estimates are derived. 
The principle components of the changes in liability are service costs and interest costs as can be seen in figures 2 and 3 below. 
3  ACTUARIAL VALUATION OF LIABILITIES AND CURRENT ASHI CHARGES 
3.1.  Since 2012 the WTO has presented an actuarially determined estimate of the present value 
of future after service health insurance benefits as an accrued liability in its audited financial statements. The most recent actuarial study to estimate this accrued liability was based on data as 
of 31 December 2013.
7 
3.2.  Actuarial valuations consistent with IPSAS requirements provide a snapshot of the situation 
at a specific point in time. They are not intended to predict a sickness plan's future financial 
condition or its ability to pay benefits in the future. 
3.3.  The most recent actuarial report states: 
Over time, the plan's total cost will depend on a number of factors including the 
amount of benefits the plan actually pays, the number of people paid benefits, plan 
expenses and the amount earned on any assets invested to pay benefits [if such 
designated assets exist]. These amounts and others are uncertain and unknowable at the valuation date, but are predicted to fall within a reasonable range of possibilities.
8 
3.4.  It is important to note that relatively minor changes in key variables can lead to rather 
dramatic variations in the estimate from year to year. To prepare the actuarial reports on the WTO's ASHI liability, the consulting actuaries used a set of actuarial assumptions to select a single 
scenario from the range of possibilities. The report further states: 
However, the future is uncertain and the Plan 's actual experience will vary from those 
assumptions and these differences may be significant or material. In addition, different assumptions or scenarios may also be within the reasonable range and 
results based on those assumptions would be different. Actuarial assumptions may 
also be changed from one valuation to the next because of mandated requirements, plan experience, changes in expectations about the future and other factors. 
Because actual plan experience will differ from the assumptions, decisions about 
benefit changes, investment policy, funding amounts, benefit security and/or benefit 
related issues should be made only after careful consideration of alternative future 
financial circumstances and scenarios, and not solely on the basis of valuation reports. 
3.5.  Before recommendations for dealing with the liability can be formulated, it is important to 
understand how this liability arises and is calculated. Following recruitment, an organization must calculate the likely cost of paying an ASHI benefit for each staff member. The longer a staff 
member is in the organization the higher the probability that they will become eligible to claim an 
ASHI benefit. Therefore, each year an amount intended to reflect the cost of the staff member being eligible to collect the ASHI benefit is charged to the organization. The amount includes the 
"service cost" (the cost of the current year benefit plus the portion of the future benefit earned in 
that year) and the "interest cost" (a charge on previously accumulated service costs that reflects inflationary factors that will make a benefit in th e future more costly than when the cost was first 
estimated). This liability accumulates year-on-year until the staff member retires. From that point 
                                               
7 The Annual Report of the Insuranc e Plan with the verified figures on the insured population for 2014 
was only recently finalized. Therefore, there was insu fficient time to incorporate those numbers into the 
actuarial estimates. The Annual Report is available in Annex 4. 
8 See WTO Group Sickness Insurance Plan Actuarial Valuations Report, 23 May 2014, pp. 3-4. WT/BFA/W/370 
 
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  on, the need to set aside money to pay for the eventual collection of the benefit ceases and the 
payment of the benefit begins. As the completion of each year post-retirement reflects one year less of collecting the benefit, the liability decrea ses from the date of retirement until the staff 
member ceases to collect. The following chart show s the evolution of the estimated liability at a 
disaggregated level for an individual hired at age 35. 
Figure 2 Employee joining at age 35 and retiring at age 65, married at retirement 
 
 
3.6.  To understand the component elements of the liability growth at the individual level it is 
useful to zoom in on a single year  during the period of employment.9 
                                               
9 The figures used in this and the following exampl e are illustrative and not intended to represent 
precise calculations. WT/BFA/W/370 
 
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  Figure 3 Calculation of the provision for one active person 
•A g e : 4 5
•S e x : M a l e
• Past service: 10 years• Discount rate: 2.6% p.a.
• Provision at start 
of year: - CHF 100,000 
• Annual service cost: - CHF   12,000 Provision 
at 1stJanInterest 
costService 
cost
Provision 
at 31stDec
100,000 + 2,600
(2.6% x 100,000 )+ 12,000 = 114,600
 
3.7.  Subsequently, when the employee retirees, th e liability ceases to grow and decreases as the 
organization's contribution to the after service health insurance costs are paid each year. However, 
the decrease is partially off-set by what actuaries refer to as the interest cost on the remaining 
liability. 
Figure 4 Calculation of the provision for one retired person 
•A g e : 7 0
•S e x : M a l e• Marital status: Married
• Discount rate: 2.6% p.a.
• Current pension: CHF 90,000 p.a.
• Provision at start of year: - CHF 250,000 
• Annual insurance premium:
– Total CHF 15,000 p.a.
– Paid by retiree CHF   5,400 p.a.
– Paid by WTO CHF   9,600 p.a.Provision 
at 1stJanInterest 
costWTO 
share of 
premium
Provision 
at 31stDec
250,000 + 6,500
(2.6% x 250,000 )-9 , 6 0 0 = 246,900
 
3.8.  Based on the recently presented 2014 data, the present value of the accrued liability of 
future ASHI benefits (net of retiree contributions) was estimated at CHF 343 million. The estimated value in 2012 was CHF 270 million and CHF 244 million in 2013. The predominant 
reason for the dramatic volatility in the projected liability was changes in the discount rate
10 from 
2.1% in 2012 to 2.6% in 2013 to 1.1% in 2014. 
                                               
10 The discount rate is based on the interest rate pa yable on high quality corporate bonds. The currency 
and the term of the bonds should be consistent with  the currency and estimated term of the ASHI benefit 
obligations. In theory, if assets were set aside to fund future costs they could be invested in these low risk WT/BFA/W/370 
 
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  3.9.  The current costs of ASHI benefits promises made by the organization in 2014 are actuarially 
estimated to be CHF 15.9 million. The cost in 2013 was CHF 16.1 million and in 2012 was CHF 17.6 million. On a pay as you go basis the WTO actually expensed CHF 2.4 million in 2014, CHF 2.3 million in 2013 and CHF 2.1 million in 2012 for the subsidy of retiree after service health 
insurance. 
3.10.  Differences between the full actuarially estimated current cost and the lower actual cost 
charged as a budgetary expense each year result in  the liability increasing. The year to year net 
estimated liability recognized by the Organization will also depend on changes in financial 
assumptions (as mentioned above in relation to the discount rate) and actual experience during the year relative to the previous estimates. 
4  PROJECTED EVOLUTION OF LIABILITY UNDER VARIOUS SCENARIOS 
4.1.  The projection of the future liability is an imprecise exercise for the same reason that 
estimating the current liability is difficult. Indeed, projecting far into the future makes the challenges even more pronounced. However, lookin g at demographic factors alone, it is obvious 
that the liability will grow and grow significantly if no actions are taken. 
4.2.  Principally, this is due to the simple increase in the number of retirees (and their dependents) 
eligible for the benefit. Currently there are about 514 beneficiaries. As the WTO is a relatively 
young organization its ratio of active staff to beneficiaries is high: currently about 1.5 active staff 
members per subsidized beneficiaries. Actuarially, the number of active staff is assumed to remain 
constant while the number of beneficiaries is projected to grow for the next 50 years until an equilibrium level of beneficiaries is reached at around 1000. At that point, there would be only 
0.7 active staff per subsidized beneficiaries. 
Figure 5 Active Staff Population Comp ared to ASHI Beneficiary Population: 
 
 
4.3.  Retirees tend to have higher medical costs than active staff so as this ratio shifts, the total 
cost of providing medical insurance benefits will increase. 
                                                                                                                                               
bonds and the growth of the assets would match the evolution of the liability such that there would be no 
change in the net liability. 
WT/BFA/W/370 
 
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  4.4.  The second factor driving the projected evolution of the liability is simply medical inflation 
and its upward pressure on costs. Historically, medical inflation has been significantly above standard inflation. Currently, the actuarial model assumes that medical costs will grow at a rate of 3.3% above standard inflation. Compounded over 35 -50 years this is a dramatic factor. If medical 
inflation moderates, the growth in the projecte d liability would slow down correspondingly. 
4.5.  One can question the validity of either of thes e critical assumptions (the rate of growth in the 
number of eligible retirees or the rate of medical inflation). However, it is not possible to question 
the directional tendency of the liability. Based on current assumptions and continuing the 
pay-as-you-go approach to funding, the ASHI liabilit ies are projected to evolve predictably upward 
potentially reaching over CHF 1.4 billion by 2050. However, beginning to pre-fund the liability and control the costs can lead to significantly diff erent estimates of the outcome. The chart below 
(figure 5) shows three scenarios ranging from "doing nothing" to beginning to simply fund the 
annual service costs to funding the service costs and amortizing the existing liability over an 
extended period. How the liability actually evolves will depend on specific actions taken to address 
1) the costs of providing medical insurance (both the subsidy and the benefits covered), and 2) 
the funding available to cover these costs. These tw o categories of options for the future will be 
explored in a later section of the report. 
4.6.  It is important to be clear that the estimated liability will always remain a theoretical value. It 
does not represent an actual cash cost to WTO and certainly not an amount payable in a given year. As discussed above, annual costs for the ASHI benefit consist of: 
a. the pay-as-you-go amount 
b. plus, the service cost, 
c. plus, the interest charges on any existing liability. 
 
4.7.  Currently, the difference between the pay-as-you go cost and the full service cost is about 
CHF 7 million per year. In addition, the accumulated liability generates an interest cost of an additional CHF 6 million per year. This is why the middle line in figure 5 (below) continues to rise 
even if the full service cost of CHF 9.5 million (CHF 2.5 million for the pay-as-you go costs plus 
CHF 7 million for the amount needed to fund newl y accrued liabilities) were to be set aside. The 
already accrued liability built up from prior years of operating under the pay-as-you go approach continues to generate an interest charge each year. 
4.8.  The top line of Figure 5 represents continui ng with the pay-as-you-go approach for which the 
costs are currently about CHF 2.5 million per year and are projected to rise to approximately CHF 
17.5 million per year in 2050 (based on current assumptions). The middle line represents full 
pre-funding of the current service cost (but not amortizing the pre-existing liability). Under this 
scenario the rate of growth in the liability will slow substantially, but will continue to rise as the interest costs on the pre-existing liability continue to accumulate. The cost of a full service cost 
approach would be about CHF 9.3 million now and would be projected to rise to approximately CHF 
32.0 million in 2050. Only by also beginning to set aside additional funds greater than the interest 
charges for the prior accumulated liability will the total liability begin to reduce. The bottom line 
represents a scenario where the full service cost, plus interest costs, plus an additional CHF 
10 million per year would be set aside until the pre-existing liability was fully amortized after which 
the full service costs would continue to be paid. The cost of this approach would currently be CHF 25.8 million and would rise to a peak of about CH F 32.0 million in 25 years and then drop by CHF 
10 million after which it would gradually rise in line with expected inflation. WT/BFA/W/370 
 
- 12 - 
 
  Figure 6 Projection of the net liability provis ion if the WTO pre-funds part or all of the 
estimated long term costs of the ASHI benefit 
 
4.9.   The above scenarios assume there are no changes in the Plan and only focuses on the ASHI 
benefit costs. There are additional costs associated with providing medical coverage to current 
staff in the current year. These will be included in the discussion of budgetary implications below. 
5   THE POTENTIAL FOR STEERING THE MEDICAL INSURANCE PLAN TOWARDS A MORE 
SUSTAINABLE FUTURE 
5.1  Financial Considerations 
5.1.  As noted above, the WTO currently budgets for medical insurance costs on an annual basis – 
what is known as "pay-as-you-go" or "self-funded" insurance. In this way the premiums paid – both the WTO contribution and that paid by the pl an participants - are used to cover the costs of 
claims in a given year. 
5.2.  Under the current Plan contract any savings are set aside into a reserve fund, but this money 
is used to offset the cost of premiums in times when claims exceed contributions. The reserve fund 
is not intended to set aside money for the future liabilities. 
WT/BFA/W/370 
 
- 13 - 
 
  
 
5.3.  The financial implications of changing any aspect of the insurance plan depend on the 
solutions selected. The Working Group realizes that there are a variety of ways to address the issue of the long term liability for the after-service health insurance and indeed for the financial 
health of the Plan overall. These options fall into two major categories: controlling costs and 
increasing financing. 
5.4.   Within these categories there are several approaches that could be pursued. Other 
international organizations have incorporated many of these approaches into their own plan 
structures. 
5.2  Budgetary Implications 5.5.  For the long term viability of the Plan it is important to look at the overall budgetary impacts 
and not only the projected liabilities or even the costs consequences of specific benefits. The 
consulting actuary was asked by the Working Group to model several scenarios from the perspective of the full budgetary implications of the Plan and not simply the ASHI-related 
liabilities. This analysis did not attempt to cost specific cost savings from benefit adjustments or 
the impacts of specific funding options. Instead, by looking generically at cost control and funding 
approaches the analysis projected the budgetary impacts without specifying particular benefit 
adjustments. By considering the range of possi ble estimated outcomes it helped the Working 
Group to identify a realistic range of budgetary, policy and legal overlap in which the Plan could 
realistically be managed. 
5.6.  A starting point was the current pay-as-you-go approach . Under this scenario, the annual 
cash expenditures related to the Plan would be budgeted and paid without attempting to provision 
for future liabilities. As actuarial estimates depend on a great number of unknown variables and even modestly inaccurate assumptions can result in misleading estimates about the position of the 
Plan 30 or more years in the future, some stakeholders may consider it appropriate to continue 
with the current practice until more data can be collected about likely demographic, economic and budgetary assumptions. However, the Working Grou p does not share this view on the basis that 
even a best case scenario points towards a marked  increase in liability and annual servicing costs. 
The current estimate suggests the liability could rise to CHF 1.4 billion by 2050 when the cost of 
servicing that liability would rise to almost CHF 70 million per year. 
5.7.  From a budgetary funding perspective the counterpart to a pay-as-you-go approach is the 
full funding scenario . This would reflect in the budget the impacts of fully prefunding future 
liabilities implied by the promise to current staff of  giving them access to the Plan after they retire 
and amortizing the already accumulated estimated liability for past service plus the costs in the 
current year of providing the medical benefits to staff. 
5.8.  Under a full funding scenario, the current cash cost (pay-as-you-go) would be paid plus an 
amount necessary to cover current service costs, current interest costs and amortize the existing 
liability. This would represent the extreme on th e funding side of managing the Plan. Such an  WT/BFA/W/370 
 
- 14 - 
 
  approach would dramatically increase budgetary im pacts over the next 25 years, but would result 
in accumulated investable assets equal to the projected future liabilities for a net liability of zero. The Working Group did not see this as either a viable or appropriate objective for the use of 
Member resources over the long term. A 25 year full funding target (setting aside actual assets to 
offset the liability) would require cumulati ve funding of more than CHF 1.4 billion. 
5.9.  Another extreme would be a decision to assume that the current zero nominal growth  
(ZNG) budget for the WTO and in particular the portion of that budget that can be spent on 
staffing is maintained for the foreseeable future. This would result in a dramatic shifting of the 
costs from the WTO to staff and retirees quickl y increasing the share of income dedicated to 
medical costs. At some point the ability of the WTO to provide sufficient medical insurance to its staff (or for the staff to afford sufficient medica l insurance) would be eroded. The Working Group 
does not see this as a realistic scenario either. Overtime the costs of the Plan would be shifted 
almost entirely to staff and retirees. In 35 years the estimated premiums would consume more than 50% of a typical staff member's salary and almost 60% of a typical retirement pension. 
5.10.  The charts below show a range of scenarios considered. The first chart shows the estimated 
Plan costs to the WTO under several scenarios as a percentage of the WTO total budget in a ZNG assumption. The second chart shows the estimated evolution in the ASHI liability associated with 
each scenario. From this analysis it was the conclusion of the Working Group that no single 
approach (cost control or increased funding) would lead to a long term sustainable situation and that it was most appropriate to aim for a hybrid approach that would combine more active cost controls than have been pursued by the Secretar iat and increased funding contributions shared by 
the WTO and plan participants. 
 
 
WT/BFA/W/370 
 
- 15 - 
 
   
 
5.2.1  Cost Controls to improve th e financial situation of the Plan 
5.11.  Although financing the liability occupied a large portion of the Working Group's discussions, 
it was also recognized that cost control measures could make a significant contribution to in reducing the growth of the AHSI liability an d putting the Plan on a sustainable footing. 
Furthermore, controlling costs is a mechanism through which the WTO and the participants in the 
Plan can demonstrate that they are also invested in taking steps to ensure the sustainability of the Plan. 
5.12.  The Working Group examined a number of cost  control measures typically used in insurance 
schemes. In its examination of the various measures (detailed in the table at Annex 1) the Working Group considered the time-frame necessary  to adopt a particular measure. The Working 
Group also received input from Cigna and the consulting actuaries about the potential impact of 
these measures on the financial position of th e Plan. The Working Group also examined whether 
the measures would have immediate results or  h a v e  m o r e  o f  a  l o n g  t e r m  i m p a c t  a f t e r  
implementation. The Working Group also recognized that while some measures might have a 
positive impact on the financial position of the Plan they might be, subject to further consideration 
in the future, impracticable to implement.. 
5.13.  The Working Group is mindful that a deci sion on whether any of these measures or a 
combination thereof is appropriate for the WTO plan can only be made after thoughtful 
consideration and consultation with stakeholders bearing in mind not only the impact on the WTO budget, but also the impact on plan participants. Therefore, at this time the Working Group is not 
recommending the adoption of any specific measure. However, the Working Group is 
recommending that the Secretariat fully examine and weigh the various options set forth in the 
table in Annex 1 as areas for examination with a view to identifying cost control measures which 
can make the plan more sustainable while ensuring that participants continue to have access to 
quality health care. The Working Group does not co nsider the options in Annex 1 to be exhaustive 
and urges that all potential areas for cost control are examined. The Working Group also recognizes that some of these measures could be adopted right now within the existing framework 
of the Plan, some could require re-negotiation of  the insurance contract, and others might require 
decisions on the parts of Members. Consistent with the WTO's obligation to constantly monitor the Plan and take steps to keep it sustainable, our recommendation to examine cost control measures for inclusion in the strategy should not be construed to limit the WTO's flexibility on these matters 
in the interim. In sum, if the WTO feels that it would be feasible and beneficial to the Plan to adopt 
any of these measures before the delivery of the strategy then it should do so. 
WT/BFA/W/370 
 
- 16 - 
 
  5.14.  The Working Group also bears in mind the advice received from Cigna that a primary 
mechanism for controlling costs is to maintain or increase the "healthy" population that does not use the maximum benefits every year. In general, it is estimated that more than half of health care costs relate to unhealthy but modifiable behaviours. 
5.15.  Cigna noted that a variety of measures can be taken to promote a healthy culture amongst 
employees. Cigna acknowledged that it cannot be defined in exact numbers how many severe medical cases have been avoided or to which extent the cost for a chronic illness has been 
reduced. Nevertheless, they note that the positive  impact on medical cost reduction and individual 
productivity of the workforce cannot be underestimated. 
5.16.  It should be noted that the purpose of implementing any cost control option is not to 
decrease  the existing funding levels but rather to provide for a more efficient and better use of 
existing funding in a manner that will help to mitigate future budgetary demands and future 
liabilities. The WTO Plan is faced with certain demographic realities, namely a steadily aging population and a slow increase in the total number of plan participants. Therefore, even after 
taking cost control measures the absolute costs of the plan will nevertheless increase bearing in 
mind the existing liability. Thus, the objective of any cost control measures adopted should not be to see an actual decline in costs year-on-year, but rather to slow the rate of increase in these 
costs and contributing towards the overall goal of halting the increase in the liability. 
5.2.2  Funding changes to improve the financial situation of the Plan 5.17.  The Working Group examined alternative appr oaches to funding the Plan and the associated 
ASHI liabilities. As the real costs of the Plan are greater than the actual cash costs in a given year, 
any decision to move beyond the pay-as-you-go approach would necessitate the creation of a 
medical insurance/ASHI reserve fund where assets, including savings realised from implementing cost controls, could be set aside for future use. The external auditor could provide assistance with 
identifying potential cost savings in the WTO budget. 
5.18.  Plan participants can contribute more by raising premiums and by reducing the WTO 
contribution to their medical benefits. There can also be measures taken to ensure that what 
participants contribute is distributed equitably across the participant population and in relation to 
their ability to pay. This would have implications for how premium levels are calculated. Changes in these areas would result in additional resources that could be diverted into the reserve fund. 
5.19.  The WTO can contribute more by increasi ng the budget allocation for medical insurance 
while respecting the overall zero nominal growth position of the CBFA. Currently, only the 
pay-as-you-go costs of the Plan are reflected in the budget planning of the Organization. A 
decision to recognize a larger portion of the IPSAS accounting costs related to the Plan would 
provide resources that could be diverted into the reserve fund. Therefore, the WTO could also 
allocate savings from other parts of the budg et, when they occur, to the reserve fund. 
5.20.  Regardless of how additional resources are committed to the Plan, the creation of a reserve 
fund will have important practical implications related to how such resources will be managed and 
under what circumstances they could be used. These are specific issues which will require development and would be important elements of any plan for long term sustainability of the 
WTO's medical insurance plan. 
5.3  Legal and Human Resource Management Implications 
5.21.  In recommending any changes to the stru cture and financing of the Plan, the WTO must 
respect the legal rights of international civil servants with respect to the terms of their 
employment. In that respect, it is useful to note that the Administrative Tribunal of the 
International Labour Organization (ILOAT) has had cause to examine in a variety of contexts instances of where employees have had benefits al tered or diminished during their tenure and has 
provided some guidance on the parameters within which an international organization may make 
alterations to the compensation benefits – incl uding medical insurance – of international civil 
servants. WT/BFA/W/370 
 
- 17 - 
 
  5.22.  Based on a review of the ILOAT jurisprudence it can be reasonably concluded that the 
existence of after-service medical coverage is an acquired right. Nevertheless organizations retain 
reasonable latitude to modify the specific conditions under which this benefit is offered.11 The 
ILOAT has only examined the specifics of changes to ASHI in one case. From that case we can 
conclude that certain factors must be present for an organization to legally modify ASHI benefits. 
First, if amendments to the structure and financin g of the after-service health insurance are to be 
made, they must be made for financial considerations and that there is evidence (such as actuarial 
evaluations) to support the financial need for changes.12 Second, any changes must be made after 
consultation with all relevant stakeholders (administration, staff members, and retirees) on the development of any changes to the Plan. Finally, an y changes must ensure that proper transitional 
measures are implemented as well as efforts to decrease the injury to those most adversely 
affected by the changes (e.g., those on low pensions). 
5.23.  While the Working Group is confident that there is sufficient legal scope to implement any 
necessary changes to the Plan it underlines th e need to approach the matter in a carefully 
considered manner and to ensure that the Plan's participants have ample opportunity to engage 
with and participate in the strategy developmen t process and its subsequent implementation. The 
Working Group notes the implementation of an y particular reform measure would require a 
thorough legal and policy assessment regarding its validity towards current and future plan 
participants. 
5.24.  Furthermore, the Working Group understands that any major changes to the medical 
insurance Plan will result in challenges for human resources in managing the transition and any 
potential uncertainty for staff members and retirees. The Working Group also recognizes that some 
of the measures in Annex 1 might require additional human resources manpower to implement and that the potential costs of administering any new measure would require a cost-benefit 
analysis. 
6  RECOMMENDATIONS 6.1.  That the CBFA ask the Director-General to develop a strategy in line with the 
recommendations of this Report and building upon the Working Group's consideration with the 
goal of halting the expansion of the liability and setting the ASHI plan on an affordable footing. 
6.2.  The Strategy should: 
a. Include the development of an underlying prin ciple of ASHI to provide a clear objective 
for ASHI in the future. 
b. Consider the allocation of dedicated human resources in terms of managing ASHI and 
the change process ahead. 
c. Conduct any further analyses and stud ies to better inform the process. 
d. Set out a range of genuine and tangible cost control measures to mitigate the projected 
rising costs of the Plan. 
i. The WTO should review carefully the list of cost control measures identified in Annex 
1 of this report (and any other viable measures that might be identified); develop a package of measures to be implemented in the short, medium and longer terms; and 
prioritise the package of cost controls taking into account the complexity involved 
and their potential impact especially in re lation to the major drivers of the Plan's 
premiums i.e. hospitalisation charges, doctors' fees and medication costs. 
ii. Identify any such measures which can be implemented with speed and develop plans 
to do so. 
                                               
11 ILOAT Judgment 3074, para. 15. 
12 ILOAT Judgment 1226, para. 8. In the particular circumstances of the FAO, the ILOAT noted that 
there was evidence to show that the financing of the Pl an was always tied to the Organization's finances and 
that there was evidence to support that such finances  were declining and that ch anges to the after-service 
coverage were necessary to address the problem. WT/BFA/W/370 
 
- 18 - 
 
  iii. In line with item 7 under Annex 1 establish whether current national social security 
systems now provide for expatriated nationals. 
iv. Consider measures which would maintain good health among plan participants such 
as encouraging healthy behaviours and preventative care. 
e. Identify avenues for the improved financing of ASHI and make proposals so as to 
provide additional funding in the future including: 
i. A mechanism for accumulating funding above and beyond the pay-as-you go annual 
expenditures in a segregated account. These funds might be derived from savings 
associated with the Plan directly or other sources of WTO budgetary savings, additional revenues from adjustments of premiums; savings resulting from cost controls and any other sources of revenue that might be identified in the future. 
ii. A proposal for the budgetary treatment of the Plan and ASHI benefit that provides a 
fair and true view on the situation. The proposal should include a mechanism for the long-term sustainable management of the Plan with a particular focus on both 
budgetary consequences and ASHI liabilities. 
iii. The utilisation of the expertise of the External Auditor and any other specialists 
considered useful in identifying sources of budgetary savings and in contributing to 
the reporting to stakeholders on the situation of the Plan. 
iv. An approach to governance of the plan including, but not limited to, the management 
of the accumulated assets of the Plan (such as conditions under which the funds can be invested, investment guidelines for those funds, and projected administrative 
costs associated with the fund) and the purposes for which the fund could be utilised. 
v. A structure and schedule for reporting to stakeholders on the situation of the Plan. 
f. Establish a set of metrics that can be tracked to determine over time if the Plan and 
ASHI benefits are being managed effectively and on track to achieve the overall goal of 
halting the expansion of the liability and setting the ASHI plan on an affordable footing. 
6.3.  The process for developing the strategy must involve consultation with relevant stakeholders. 
Therefore, the Secretariat should, at the earliest  opportunity, set forth a process for consultation 
with stakeholders, particularly staff and retirees, regarding emerging proposals for Plan sustainability. With respect to consultation with  WTO Members, the Working Group suggests that 
the CBFA constitute a new Working Group to prov ide input and feedback to the WTO Secretariat 
throughout the course of its development of the Strategy. 
6.4.  The Strategy should also detail the mechanism by which the WTO will regularly report to the 
CBFA on its plans and the progress made in implementing the new sustainable approach to Plan 
and ASHI benefits. This should include periodic updates (i.e. quarterly) on plans, actions and 
results until it is determined by the CBFA that the situation has stabilized and less frequent reporting is appropriate. 
6.5.  The Strategy should be developed within 12 months, if not earlier, of the CBFA's 
consideration of this Report. 
 
  
  WT/BFA/W/370  
 
- 19 - ANNEX 1 
COST CONTROL MEASURES TO BE EXPLORED 
 Cost Control Measures Potential Impact to the 
WTO budge1 When it can be 
achieved?2 
1 Change the level of the WTO subsidy to the medical insurance premium for retirees (on average approx. 
60% of premium). Medium Short-term 
2 Change the level of the WTO subsidy to the medical insurance premium for staff and dependents (on 
average approx. 50% of premium). Medium Short-term 
3 Change how specific subsidies to the medical insurance premium for staff are determined. No longer peg 
to mid-point of grade, but rather as % of salary. Medium Short-term 
4 Change how specific subsidies to the medical insura nce premium for retirees are determined. Introduce 
as % of pension/income. Medium Short-term 
5 "Means test" retirees and determine their subsidy level based on total income from all sources not just 
WTOPP or UNJSPF proceeds. Review the calculation meth od of contributions for retirees, i.e. in order to 
consider all possible revenues and not only the pension received from the WTO or UN. Low Medium-term 
6 Alter eligibility criteria for After-Service Health Insurance – increase years of service to be eligible 
(currently five years) Low Medium-term 
7 Enable and encourage retirees to participate in a national health system and provide "complementary" 
insurance to get them to an equivalent level of benefits of the staff. Only allow those retirees who cannot get into such a national plan to stay in the full WTO insurance. 
For those who participate in a National system, re quire first reimbursement from that system and 
complement with WTO health insurance. Medium Long-term 
8 No longer allow secondary dependents to be insured under the WTO medical insurance plan. Medium Medium-term 
9 Provide "core" coverage and negotiate rates for staff members who want complementary additional 
coverage. Medium Medium-term 
10 Restrict world-wide coverage for retirees to th ose who reside outside of Switzerland or France Low Medium-term 
                                               
1 he consulting actuary. 
2 The time horizons for implementation  of the measures can be defined as short (1 -2 years), medium (2-5 years)  or long term (more than 5 years). This time horizon do es 
not necessarily reflect when the cost controlling effects  of a measure might be felt.   
  WT/BFA/W/370   
 
- 20 -  Cost Control Measures Potential Impact to the 
WTO budge1 When it can be 
achieved?2 
11 Expand the list of procedures and hospitalizations that requir e pre-approval from the health insurance. Medium Medium-term 
12 Provide incentives for insureds to adopt healthy behaviour such as fitness and healthy eating. Low Short-term 
13 Discourage insureds from unhealthy behaviour such as smoking. Low Short-term 
14 Decrease reimbursement % mainly Outpatient or private room inpatient (90% --> 80%) -6,0% / - 6,5% High Medium-term 
15 Increase yearly deductible (CHF 300 CHF -->CHF 500 per adult per year). -1,5% / - 2,0% Low Medium-term 
16 Decrease yearly optical ceiling (CHF 600 --> CHF 400 per person per year). -0,2% / - 0,7% Low Medium-term 
17 Decrease dental ceiling (CHF 3.000 --> CHF 2.500 per person / per year). -0,3% / - 0,7% Low Medium-term 
18 Encourage public hospitals (i.e. Hôpital Cantonal in Geneva and University Hospital in Lausanne) usage 
rather than private hospitals and clinics. Medium Short-term 
19 Reduce "private room" reimbursement. (Cu rrently, reimbursed at 90%). Low Medium term 
20 Review the possibility to have a divorced spouse to stay indefinitely in the Plan. Only provide coverage 
to divorced spouses if they are unable to enrol anot her health insurance plan. Limit the n° of divorced 
spouses per active or retiree member to continue their affiliation in the Plan. Low Medium-term 
21 Review the possibility to have a retiree spouse affiliated into the Plan, i.e. if the marriage takes effect 
after retirement. Low Medium-term 
22 Offer a complementary insurance for long term care (currently, non-medical care in hospital / nursing 
home is reimbursed at CHF 4,000 per person / per month). Low Medium-term 
23 Re-examine benchmark rates for "reasonable and customary" charges both for local and world-wide 
coverage. Medium  Medium-term  
  WT/BFA/W/370  
 
- 21 -  Cost Control Measures Potential Impact to the 
WTO budge1 When it can be 
achieved?2 
24 Reinforce prevention: 
 
- Encourage vaccination, 
- Annual skin cancer prevention campaign, 
- Prostate cancer prevention campaign, 
- Musculoskeletal disorder (MSD) campaign: ergonomic principles implementation of ergonomic 
principles, 
- Mammography, 
-Colon cancer prevention campaign. Low On-going but can be 
improved / 
Short-term 
25 For specific medical treatments, require referral from general practitioner, before consulting specialists. Low Medium-term 
26 Expand vaccination coverage. Low Short-term 
27 Discounts or increased coverage if using "in network" versus out of network providers. Up to 20% cost 
saving. Agreements on medical care and rates between service provider networks (general practitioners, 
specialist doctors, medical and radiology centres, test laboratories, opticians, public hospitals). Low Medium-term 
28 Introduce payroll charge to prefund an after service health insurance fund. Medium Medium-term 
29 Introduce a General-practitioner at the WTO where staff-members can go for consultations (system 
currently being introduced by the World Bank). Medium Medium-term 
 
   
  WT/BFA/W/370   
 
- 22 - ANNEX 2 
COMPARISON OF BENEFITS WITH OTHER IGOS  
 WTO UNOG/WMO ILO/ITU WHO WIPO 
Entitlement to 
continue after retirement and years of participation in the Plan  Yes, beyond age 50 and at 
least five years of participation in the plan prior to retirement  (dependants can also 
continue) 10 years 10 years in the UN system of 
which the last 5 with ITU At least five continuous years 
of participation in the plan 
prior to separation at official 
age (60, 62 or 65) provided 
the required lump sum has 
been paid by the staff member 
on separation (dependents can 
also continue under para. 
90.2(d)(ii)) At least five years before their 
separation from service 
Is there a limit 
for the 
recruitment age? No, but retirement age is 
mandatory at 65. No Applicants are expected to 
complete a term of appointment 65 Maximum age on admission shall be 65 
years 
BENEFIT      
Out-Patient 
treatment Annual deductible of 
CHF 300 per adult insured 
 
90%, then 100% after 
CHF 1,000/adult/year 
out-of-pocket expenses No annual 
deductible 
 
80%, then 100% 
after CHF 2,800 
(single) or 
CHF 4,600 (family) 
out-of-pocket 
expenses As of 1 May 2014, new Plan annual 
deductible (varies according to 
level of revenue of insured). 
 
80%, then 100% when the 
threshold of approved expenses 
entitled to payment of 
supplementary benefits is reached. 
That threshold, per family and per 
year, is equal to 25% of the paying 
member's annual remuneration or 
full pension (full pension based on 
25 years of service) No annual deductible 
 
80%, then 100% if year's total 
out-of-pocket expenses 
exceed 5% of annual net 
salary (for expenses without 
ceiling only) A franchise of CHF 350 for each calendar 
year to the cost of out-patient treatment 
for insured persons of ≥ 21 years. All 
insured person assume a 10% share of 
the costs of out-patient treatment in 
excess, where applicable, of the amount 
of the franchise. Total contribution to 
expenses may not exceed CHF 2,000 for 
each insured person of ≥ 21 years old 
and CHF 250  for each < 21 years old 
In-Patient treatment  
- public ward 100% 100% 100% in some countries 100% 100%  
  WT/BFA/W/370  
 
- 23 - Comparison of benefits with other IGOs (Cont'd) 
 WTO UNOG/WMO ILO/ITU WHO WIPO 
- semi-private ward 100% 90%, then 100% as above Hospitalization: 80% (max. 
approved expense $500/day), then 100% of the approved expense when the threshold of approved expenses entitled to payment of supplementary benefits is reached. Limited to 45 days per insured person and per calendar year. Treatment: 80% then 100% of the approved expense when the threshold 
of approved expenses 
entitled to payment of supplementary benefits is reached 80% of room rate not 
exceeding CHF 950 (accommodation + nursing care), then 100% not exceeding CHF 950 (accommodation + nursing care) if year's total out-of-pocket expenses exceed 5% of annual net salary 100% 
- private ward 90%, then 100% for 
medical treatment costs 
after CHF 1,000/adult/year 
out-of-pocket expenses Limited to semi-private 
coverage Limited to semi-private 
coverage 80% of room rate not 
exceeding CHF 950 
(accommodation + nursing 
care) in Switzerland or $500 
(only on accommodation) 
outside, then 100% not 
exceeding CHF 950 
(in Switzerland or $500 
outside) if year's total 
out-of-pocket expenses 
exceed 5% of annual net 
salary 90% with a maximum of 
CHF 1,000 on cost of 
treatment, 90% 
reimbursement on 
accommodation with no 
maximum + any amount 
above a top price of 
CHF 850/day   
  WT/BFA/W/370   
 
- 24 - Comparison of benefits with other IGOs (Cont'd) 
 WTO UNOG/WMO ILO/ITU WHO WIPO 
Long term care 100% of the cost of 
long-term non-medical care in hospital, nursing home or similar institution, subject to a maximum reimbursement of CHF 4.000 per person per month.  CHF 90 per day full 
dependency CHF 45 per day for partial dependency Long term care at home or 
in an institution Nursing (long term) 80% of 
USD 100 per day Maximum of CHF 4,000 per 
month and per person if 4 out of 6 daily activities may not be performed 
Glasses 90% (max. CHF 600/year) 80% (max. CHF 450/year 
cumulative over 2 years) 80% (max. $320 of 
approved expenses/year 
cumulative over 2 years to 
max. $960 of approved 
expenses, of which $125 
max. of approved expense 
for frames) 80% (max. $250 cumulative 
over 3 years) or whenever 
change in vision following 
eye operation max. $250 on 
glasses only) 90% (max CHF 1,000/year) 
Lump sum of CHF 250 
granted towards frames not 
more than once every 
2 years 
Dental treatment 75% (max. CHF 3,000/year, 
cumulative over 2 years) 80% (max. CHF 2,500/year 
cumulative over 2 years) 80% (max. $1,500 of 
approved expenses/year 
cumulative over 3 years to max. $6,000 of approved expenses) 80% (max. $1,500 
cumulative over 3 years)  75% (max 3,500/year, 
cumulative over 2 years). In 
France rate of reimbursement is 85% 
 
Comparison with other IG Os on premiums payable 
PREMIMUM PAYABLE 
BY INSURED 
 WTO UNOG ILO WHO WIPO 
 
Organization /Insured  Premium sharing ratio   
63% WTO / 37% retiree
1 
   
53% WTO / 47% staff 
members  
75% UNOG/ 25% retirees 
   
50% / 50% staff members 
  
67% ILO/ 33% retirees 
   
50% / 50% staff members  
67% WHO / 33% retirees 
   
67% WHO / 33% staff 
members  
65% WIPO/ 35% retiree 
 
25% WIPO/75% staff at 
the higher grade 
 
50%/50% staff at the 
lower grade 
 
                                               
1 Rounded averages as of December 2014 that includes non-subsidized (children, dependents) at WTO. Methodology for estimating ra tios may vary across IGOs. WT/BFA/W/370 
 
- 25 - 
 
  ANNEX 3 
LIST OF WORKING GROUP MEETINGS AND SUBJECT / DOC REFERENCES 
 29 April 2014 
 16 May 2014 
 16 June 2014 
 23 September14 
 14 October 2014 
 27 January 2015 
 26 February 2015 
 20 March 2015 
 04 May 2015 
 18 May 2015 
 10 June 2015 
 19 June 2015 
 25 June 2015 
  
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