DISABILITY following an accident: what happens (LAA, AI, LPP) and who intervenes?

Introduction

Disability following an accident is a governance issue, not just a medical one. For an SME, the main risk isn't "choosing the wrong insurance," but rather mismanaging the complex chain of benefits: accident insurance (LAA), disability insurance (AI), and occupational pension plans (LPP). Coordination rules, coverage limits, and timing can significantly impact an employee's final income, and therefore, HR, financial, and operational management.

What you will be able to decide and do at the end: who intervenes at each stage, what control points to put in place, what documents to document, how to anticipate ceilings (without making rash promises), and what questions to ask the accident insurer, the AI and the pension fund.

1) LAA, AI, LPP: who intervenes, and for what purpose exactly?

LAA: the entry of the file in case of an accident

In the event of an accident (work-related or non-work-related, depending on the situation), the LAA (Accident Insurance Act) is the point of entry. Two key benchmarks for an SME:

• Accident insurance (LAA) is calculated on a capped insured earnings amount. The Old-Age and Survivors' Insurance (AVS/AI) Information Centre reminds us that the maximum amount of insured earnings is 148,200 francs per year (406 francs per day).

• When the salary exceeds this ceiling, a portion of the income will not be included in the LAA base. This is a matter of portfolio management (supplementary LAA structure, mandatory LPP, etc.), not an administrative detail.

AI: Disability assessment and the logic of pensions

Disability insurance (DI) intervenes when there is a risk of disability (long-term inability to earn a living). Two useful points to consider:

• Since the introduction of the linear pension system (January 1, 2022), the pension amount is fixed as a percentage of a full pension; a disability rate of less than 40% does not give rise to an AI pension.

• The CdC/ZAS also reminds us that a disability rate of 40% entitles the holder to a 25% share of a full pension (new system).

LPP: supplementing the AI, according to the pension plan

The LPP acts as the second pillar and supplements the benefits of the first pillar. The OFAS/BSV specifies:

• LPP disability benefits supplement the 1st pillar and are calculated in particular according to the degree of disability.

• To qualify for an LPP disability pension, you need a degree of disability of at least 40%; from 70%, the pension is full.

Methodological point: in a case of “disability following an accident”, the subject is not to choose “the right” institution, but to orchestrate the coordination and decisions, with robust documentation.

2) Pilot chronology: from the day of the accident to disability

Phase 1: Open the LAA file and secure the facts

Objective: to avoid grey areas (accident vs. illness, causality, date inconsistencies). For SMEs, the winning strategy is simple:

• an internal project manager (HR or CFO) and a single communication channel

• a factual chronology (event, certificates, resumptions, decisions)

• dated and centralized documents

Phase 2: Short-term services and monitoring of work capacity

On the Suva side, the document “Calculation and payment of daily allowance” recalls that the right to daily allowance arises on the third day following that of the accident (if total or partial incapacity).

The same document explains the calculation logic around 80% of the insured gain (in the formula) for the daily allowance.

SME management: at this stage, the challenge is operational and financial (work organization, replacements, monitoring of certificates), but also probationary: each partial return, job adaptation, or aggravation must be tracked, because it will influence the future.

Phase 3: stabilization, then the question of disability benefits

The CFST (LAA guide) recalls the coordination rule in case of competition between an LAA pension and an AI/AVS pension: the sum of the two pensions must not exceed 90% of the insured gain (art. 20 para. 2 LAA).

This is a turning point: we are no longer just talking about stopping work, but about “coordinated income”.

Phase 4: LAA-AI-LPP coordination (and management of expectations)

From the moment AI actually comes into play (filing, assessments, decisions), the SME must manage consistency:

• what the LAA pays (and on what basis of insured earnings)

• what the AI recognizes as the degree of disability (linear system)

• what the LPP supplements according to the fund's regulations and the plan (mandatory/supplementary)

3) Benefits: how to read “who pays what” without using the wrong unit of account

LAA: guaranteed gain, ceilings, coordination

Two indicators are particularly actionable:

• Maximum guaranteed earnings: 148,200 francs/year (406 francs/day).

• Coordination of LAA pensions with AI/AVS: ceiling of 90% of the insured gain.

A concrete consequence of this is that the “final income” cannot be deduced by simply adding up promises. It is managed through a scenario-based approach, with particular attention paid to salaries exceeding the LAA ceiling.

AI: threshold and pension amount since 2022

The disability insurance (AI) system has been applied to linear pension calculations since January 1, 2022. The Old-Age and Survivors' Insurance (OASI)/Disability Insurance (DI) Information Centre reminds us:

• No disability pension if the disability rate is less than 40%

• the quota is fixed as a percentage of a full annuity in the linear annuity system.

The BSV also specifies that a disability rate of at least 40% entitles the person to 25% of an AI pension, and that for a rate between 50 and 69%, the applicable percentage corresponds to the disability rate.

LPP: thresholds and logic of complement

The OFAS/BSV reiterates the thresholds:

• LPP disability pension from 40%

• Full annuity from 70%.

And it recalls the role: to supplement the 1st pillar and guarantee income in case of inability to earn.

Reading chart (without invented numbers)

LAA AI LPP pilot project

Accident Trigger Insured Risk of Disability, AI Assessment Recognized Disability and Plan Conditions

Key threshold: Coordination with AI/AVS capped at 90% of insured earnings. No pension < 40%; linear system since 2022. Pension from 40%; full pension from 70%.

Critical point for SMEs: Insured gain ceiling, Filing schedule and decisions, Regulations and mandatory requirements, potential gaps

References: maximum guaranteed gain LAA, coordination ceiling, AI system, LPP thresholds.

4) Two mini case studies (SMEs): governance scenarios, not promises of amounts

Mini-case 1: serious accident, partial recovery, then lasting disability

Typical situation: total cessation, then partial resumption, then worsening.

• Decision 1 (immediate): open and document the LAA case; secure the timeline.

• Decision 2 (monthly): follow the work capacity and the logic of daily allowance, the right to which begins on the 3rd day after the accident.

• Decision 3 (at stabilization): prepare the coordination with the AI and the LPP fund (documents, schedule, roles) to avoid misunderstanding on the “total income” and the 90% ceiling in LAA-AI/AVS competition.

What the SME gains: a clear trajectory, factual communication with the employee, and less friction between HR, CFO and operations.

Mini-case 2: Executive with salary exceeding the LAA ceiling, risk of gap

The benchmark is simple: the guaranteed LAA gain is capped at 148,200 francs/year.

Piloting:

• Map the portion of salary above the ceiling and verify where it is covered (supplementary LPP, any additional coverage)

• prepare a “coordinated income” scenario taking into account the LAA+AI/AVS ceiling at 90% of the insured gain, then the LPP logic (threshold 40%, full annuity at 70%).

Objective: to avoid the surprise of “LAA covers, but not the entire salary”.

5) Guidelines and checklist

Key performance indicators (executive, CFO, HR)

1. Appoint a single internal pilot and a deputy

2. Create a dated timeline (events, certificates, decisions, documents sent)

3. Identify the LAA salary base and the insured earnings ceiling

4. Anticipate the coordination of pensions (90% ceiling in LAA-AI/AVS competition)

5. Check the LPP plan (mandatory/supplementary) and the LPP thresholds 40%/70%

6. Organize internal communication: a factual message, a frequency, no promises of amount

Box: What needs to be documented

• Accident report, factual description, witnesses if useful

• Medical certificates (rates, periods, functional limitations if indicated)

• History of absences, partial returns, job adjustments

• Correspondence and decisions from the accident insurer (requests for documents, decisions)

• Rehabilitation measures / attempts at resumption (dates, conditions, outcome)

• AI submission and exchanges (proof of sending, requests, responses)

• LPP pension certificate, regulations, plan (mandatory/supplementary), contact information for the pension fund

“No blind spot” checklist

• Week 1: LAA file opened + timeline + internal pilot

• Month 1: HR/CFO review: work capacity, organization, costs, missing parts

• Regarding stabilization: LAA-AI-LPP coordination note (thresholds, ceilings, timetable)

• For each decision: document and communicate factually (internally and to the employee)

6) Common mistakes and how to avoid them

1. Reasoning “an insurer pays for everything”

Avoid: putting up a LAA-AI-LPP card and a calendar right from the start.

2. Forget about coordination ceilings

The 90% cap on insured winnings in LAA-AI/AVS competitions is a tipping point.

Avoid: managing on a “coordinated income” basis, not on an addition of benefits.

3. Ignoring the LAA insured earnings cap

Official ceiling 148,200 francs/year (406 francs/day).

Avoid: triggering a review of gaps (LPP/supplementary, supplements) as soon as a salary exceeds this ceiling.

4. Waiting too long to structure the AI component

The AI pension system depends on the disability rate, and since 2022 the logic has been linear.

Avoid: properly documenting and preparing the parts, without waiting for the “medical” end.

5. Let HR, CFO and managers each speak “on their own”

Avoid: a pilot, a dashboard, consistent communication.

7) Questions to ask your insurer/broker (10 questions)

1. What is our LAA insured earnings base and how do you apply the legal cap (148,200/year)?

2. When does the daily allowance start (3rd day rule) and what documents are required for it?

3. How do you handle partial returns to work and variations in the rate of incapacity for work?

4. At what point do you consider stabilization and the shift towards a rent-seeking logic?

5. How do you apply the LAA coordination with AI/AVS and the 90% cap on insured earnings?

6. What evidence do you expect regarding rehabilitation measures and job adjustments?

7. In your opinion, what documents expedite the AI investigation (without disclosing unnecessary medical details)?

8. For AI, how does the linear system apply since 2022 in our situation (e.g., threshold 40%, quota 25%)?

9. Regarding LPP, how does the fund apply the 40% and 70% thresholds, and what are our possible supplementary rules?

10. Can you validate with us a “coordinated income” scenario (without promise), including LAA ceilings and coordination?

Conclusion

In the event of disability following an accident, the right approach is not to "look for a one-size-fits-all solution," but to establish a governance framework: manage, document, and monitor. Key benchmarks include: the maximum insured earnings under the Accident Insurance Act (LAA) is CHF 148,200 per year; coordination between LAA and Disability Insurance (AI/AVS) is capped at 90% of the insured earnings; the AI system (40% threshold and linear system since 2022); and the pension scheme thresholds (pension starting at 40%, full pension starting at 70%). A useful next step for SMEs is to formalize an internal "accident with risk of disability" form (roles, timeline, supporting documents) and link it to your claims management process.