U-I-112/95

Reference no.:
U-I-112/95
Act:
Law on the Settling of the Taxes and Contributions of the Slovenian Railways Public Company (Official Gazette of the Republic of Slovenia, Nos. 12/93, 32/95) (LSTCSR)
Operative provisions:
The Law on the Settling of the Taxes and Contributions of the Slovenian Railways Public Company of Ljubljana in the part that concerns the deferral of the payment of contributions for mandatory health insurance is not contrary to the Constitution.
Abstract:
When the LCTCSR defers the payment of the liabilities and any possible claims in a situation where the initiator, as the creditor of the liability of contributions for mandatory health insurance of Slovenian Railways as the debtor, to which it is entitled on the basis of the LHHI and which matured before the enforcement of the contested law, did not collect them or start collecting them by the time of its enforcement, it does not mean that this is a case of the prohibited retroactive effect of the law from the second paragraph of Article 155 of the Constitution.

The legal rights of the initiator as the provider of mandatory insurance can be changed by legally prescribing reliefs for individual beneficiaries, but only if these apply for the future and this does not affect the constitutional right to healthcare from Article 51 of the Constitution or to a broader right to social security from Article 50 of the Constitution.
Password:
Right to due process of law Right to social security Right to healthcare Ban on retroactive effect of a law, retroactivity Health insurance, rights, contributions Separate concurring opinion of a constitutional court judge Separate dissenting opinion of a constitutional court judge.
Legal basis:
Constitution, Articles 23, 50, 51, 155 Law on Healthcare and Health Insurance.
Document in PDF:
The full text:
U-I-112/95
8 May 1997

R E S O L U T I O N

At a session held on 8 May 1997 in a procedure to assess constitutionality initiated by the Slovenian Health Insurance Institute, represented by its director Franc Košir, the Constitutional Court

passed the following Resolution:

The Law on the Settling of the Taxes and Contributions of the Slovenian Railways Public Company of Ljubljana (Official Gazette of the Republic of Slovenia, Nos. 12/93, 32/95), in the part which refers to the deferral of the payment of the contributions for mandatory health insurance, is not contrary to the Constitution.

Reasons:

A.

1. The initiator is contesting the constitutionality of the Law on the Settling of the Taxes and Contributions of the Slovenian Railways Public Company of Ljubljana (Official Gazette of the Republic of Slovenia. Nos. 12/93 and 32/95 - hereinafter: the LSTCRS) which twice postponed the payments of matured but unpaid liabilities of the Slovenian Railways Public Company, created by taxes and contributions due for the period between 1991 and 30 June 1993 inclusive, in the part that applies to the deferral of payments of mandatory health insurance. Pursuant to the provisions of the contested law, the payments of the liabilities to the national budget, to the Pension and Disability Insurance Institute and to the Health Insurance Institute - the initiator - had been deferred. According to the original text, the first monthly instalment was due on 25 July 1995. With the changes to the law the date was postponed by two years so that the first instalment now falls due on 25 July 1997. The liabilities are by law calculated in ECU on the day of maturity by using the middle exchange rate of the Bank of Slovenia.

2. According to the initiator the contested law violates Article 2 of the Constitution because, contrary to Article 155 of the Constitution, it applies retroactively and interferes with the accrued right of the initiator to collect unpaid contributions within the limits of the existing regulations. It is contrary to Article 23 of the Constitution because it denies court procedures for the collection of due but unpaid liabilities, and to Article 51 because, on the basis of its provisions, it cuts the purpose-oriented funds within a given period which the initiator handles independently as a public institute under the provisions of the Law on Healthcare and Health Insurance, which ensures the implementation of the rights from the cited law and, in the end, of the right to healthcare as well.

3. The initiator therefore proposes that the Constitutional Court accept the initiative to annul the LSTCSR in the contested part.

4. The National Assembly of the Republic of Slovenia, in its reply to the initiative, describes the initiator's claims as unsubstantiated. In connection with the alleged violation of the first paragraph of Article 51 of the Constitution it points out that the Constitution guarantees the enforcement of the rights within the conditions specified by law. Since these liabilities cannot depend on the momentary financial standing of the initiator who, in this case, is the provider of mandatory health insurance, on the basis of the Law on Institutes and the Law on Healthcare and Health Insurance, the Republic of Slovenia, as the founder, has the responsibility to cover the obligations the initiator is unable to meet. Hence the constitutional right to health insurance cannot be affected by the deferral of the liability in question. It adds that the contested law did not absolve the Slovenian Railways public company of the cited liabilities, but only postponed it by preserving its real value.

5. The National Assembly also states that the principles of a welfare state governed by the rule of law from Article 2 of the Constitution and the ban on the retroactivity of regulations from Article 155 of the Constitution have not been violated. In connection with the alleged violation of Article 155 it raises a question of whether the initiator s claims to contributions belong within the framework of the constitutional term of accrued rights, as they depend entirely on the legislator's decisions, including the manner of and deadlines for payments to be made. As regards the interference with the right to the due process of law from Article 23 of the Constitution, the National Assembly believes it does not exist.

B.

6. The Constitutional Court accepted the initiative, and since the conditions from the fourth paragraph of Article 26 of the Law on the Constitutional Court (Official Gazette of the Republic of Slovenia, No. 15/94 - hereinafter: the LCC) have been satisfied, it immediately proceeded with adjudication on the matter.

7. During the examination of the procedure it was established that the initiator satisfied his legal standing for lodging an initiative by having the status of a mandatory health insurance provider, given to him by the Law on Healthcare and Health Insurance (Official Gazette of the Republic of Slovenia, No. 9/92 - hereinafter: the LHHI) as a system law regulating the field of health insurance and the basic issues concerning healthcare in Slovenia, the providers of the society's care for health, as well as the system of health insurance as a method of funding healthcare.

8. From the provisions of the LHHI, especially the provisions on contributions (Articles 45 to 59), it is apparent that mandatory health insurance is designed as a straightforward insurance system under the LHHI in which, in compliance with the principle of self-financing through contributions, liabilities are distributed evenly throughout various groups of beneficiaries.

As part of this system the LHHI gives the initiator, as the provider of mandatory health insurance, a large degree of independence in the management of accrued funds, whereby the initiator, as a specialist publicly-funded institution which is independent (in the same way as the budget or the Pension and Disability Insurance Institute are) is paid exclusively and completely all the contributions for mandatory health insurance that, pursuant to the LHHI, are to be used exclusively for this purpose. Pursuant to Article 45 of the LHHI, the funds for mandatory health insurance are secured through the contributions paid to the Institute by the beneficiaries, employers and other beneficiaries identified by law. The initiator proposed the rates for mandatory insurance contributions, which are then determined by the Assembly of the Republic of Slovenia (Article 55). Furthermore, the initiator may independently determine the elevated contribution rates (Article 56), the contribution amounts which are determined in lump sums (Article 57), and the criteria and conditions under which certain beneficiaries may have their contributions for mandatory health insurance lowered or even written off. As regards the technique of calculating the contributions or penalty interest, or the writing off of irrecoverable debts, guarantees, maturity and penalties, the provisions of a special law regulating the payments of contributions apply mutatis mutandis. Pursuant to the provision of Article 59 of the LHHI, the authorisation to monitor the calculation and payment of contributions belongs to the initiator. In light of this, when the legislator deferred the payment of contributions by Slovenian Railways as the beneficiary, it interfered with the initiator s legal standing as the provider of mandatory health insurance, and with both the initiator s right to collect due claims or decide to defer the payment of contributions by Slovenian Railways, and to decide on the amount of funds guaranteed by law to the initiator for the performing of mandatory health insurance.

9. The Constitution protects the rights acquired on the basis of a law by banning retroactive interference (Article 155 of the Constitution). This case is not about the prohibited retroactivity of a law, as believed by the initiator, since the law only applies retroactively when the start to the use of the law is set prior to the enforcement of the law, or when it interferes with the legal situation or legal remedies that ended during the validity of the preceding legal standard. According to the findings of the Constitutional Court, retroactivity does not exist, because the contested law defers payments of liabilities and possible collection in a situation where the initiator, as the creditor of the liabilities of contributions for mandatory health insurance of Slovenian Railways as the debtor to which it is entitled on the basis of the LHHI, which matured prior to the enactment of the contested law, and which have not been collected by the time of its enactment, had not started to collect them even though it could have done so.

10. The Constitution does not preclude changes to the legal rights or conditions for their enforcement with anticipated effects, unless these changes contradict constitutionally determined principles or other constitutional provisions, especially the principle of the protection of trust in the law as one of the principles of a state governed by the rule of law. The conditions and manners of acquisition of contribution funds by the Institute as the provider of mandatory health insurance, as stipulated by the LHHI, can therefore be changed, including by legally determining the benefits for individual beneficiaries (only for the future and if it does not affect the constitutional right to healthcare from Article 50 of the Constitution, of course). In compliance with the principle of safeguarding trust in the law this is not just about the protection of (already) accrued rights but to some degree also about the protection of anticipated rights arising from health insurance, whereby the principle of the safeguarding of trust in the law guarantees the person affected that the state will not impair their legal position arbitrarily, without material reasons substantiated by overwhelming and legitimate public interest.

11. At the time the original text of the law was adopted, public interest was described as "the prevention of large disturbances in the economy". In the reasons for the legal proposal the proposer refers to the Decree on the Founding of a Public Company for Rail Transport, according to which the Republic of Slovenia jointly funds the operation of Slovenian Railways as a public service. It also states that the Law on the Budget, in compliance with the aforementioned, set aside an amount of budgetary funds for joint funding, but these were not enough to settle all legal obligations arising from the taxes and contributions. The reason for the deficit was supposed to lie in lower-than-expected transport income as a result of less work, which was "the consequence of the general situation in the Slovenian economy and political conditions on the territory of the former Yugoslavia". The proposer accompanied the changes to the Law with a comment that, owing to the undercapitalisation of Slovenian Railways and the amount of liabilities due in 1995, only a deferral of the payments could secure the unperturbed and successful execution of the initiated rehabilitation of Slovenian Railways, as well as its "technological progress and the modernisation of this technological process as a prerequisite for joining European transport flows."

12. In view of this the legislator undoubtedly had material reasons (related to the matter of regulation) to defer the payments of contributions for Slovenian Railways in the inability of Slovenian Railways, i.e. the budget, to emerge from arrears for the funding of undisturbed operation. Public interest in uninterrupted rehabilitation and in the unobstructed work of Slovenian Railways as a public service has been demonstrated and hence, in the opinion of the Constitutional Court, the contested law is not contrary to the principles of the rule of law.

13. According to the provisions of Article 51 of the Constitution, every person has the right to healthcare under the conditions set by law. The contents and scope of this right are thereby prescribed by law, and it is a matter of a constitutional court review of an actual case as to whether a cut in healthcare funds within a certain period is perhaps constitutionally impermissible because it interferes with constitutionally guaranteed healthcare for all citizens.

14. The Constitutional Court assessed that in the case in question such an inference with the constitutional right did not occur. It is true that the legislator did interfere with the funds for healthcare with the contested law, but at the same time the initiator has not proved that the contested deferral of payments has prevented it as the provider from performing the tasks of mandatory insurance. It did not demonstrate whether the interference took place because of the increased contribution rates, or perhaps because of a reduced scope of services which it provided as part of its mandatory health insurance cover.

Furthermore, the law did not deduct the matured contributions by reducing them (by reducing the contribution rates) or by removing them (for example, by writing off the claims), but only temporarily postponed their payment or collection. In connection with the provision of the second paragraph of Article 50 of the Constitution, it ought to be pointed out that the state's obligation to provide (as well) for the functioning of health insurance derives from it, through which the right to social security and the right to healthcare are exercised. In this sense must be recognised by the opposing party that the right to healthcare could not be affected, since the Republic of Slovenia, with the cited constitutional provision, became the founder of the institute as a public institution and, as the founder in compliance with Article 49 of the Law on Institutes (Official Gazette of the Republic of Slovenia, No. 12/91), guarantees the liabilities that the institute is unable to meet. With these statements the opposing party justifiably draws attention to the fact that the initiator, despite or because of the independent special category of public spending, has the special status of public institute and public service provider, typical of which is that it is in the public interest for the state to guarantee their operation, irrespective of how successful they might be in doing so themselves.

15. The LSTCRS does not deny court proceedings for the collection of due and unpaid liabilities of Slovenian Railways by depriving the initiator of the right to the due process of law from Article 23 of the Constitution. The initiator still has the right to exercise the due process of law in cases of unpaid or late payments of contributions, only that the option of exercising it is postponed as a result of the deferral of contribution payments, i.e. their maturity.

16. Since the Constitutional Court did not establish any alleged violations of the constitutional provisions it ruled as stated in the disposition of this Resolution.

C.

17. The Constitutional Court passed this Resolution on the basis of Article 40 of the Law on the Constitutional Court, at a session composed as follows: chairman Dr Lovro Šturm and judges Dr Peter Jambrek, Dr Tone Jerovšek, Matevž Krivic M.Law, Janez Snoj M.Law, Dr Janez Šinkovec, Franc Testen and Dr Lojze Ude. The Resolution was passed by five votes to three. Judges Jambrek, Jerovšek and Šturm voted against. Judge Krivic, concurring, and judge Dr Jambrek, dissenting, gave separate opinions.


Chairman
Dr Lovro Šturm
Type of procedure:
review of constitutionality and legality of regulations and other general acts
Type of act:
statute
Applicant:
Zavod za zdravstveno zavarovanje Slovenije (Slovenian Health Insurance Institute)
Date of application:
27.06.1995
Date of decision:
08.05.1997
Type of decision adopted:
decision
Outcome of proceedings:
establishment – it is not inconsistent with the Constitution/statute
Document:
AN01258