Disability following an accident: what happens (LAA, AI, LPP) and who pays what?

Introduction

Disability following an accident is not just a medical issue. For an SME, it's a governance issue: who intervenes, who decides, who pays, on what basis, and when? The main difficulty lies in coordinating three systems: accident insurance (LAA), disability insurance (AI), and occupational pension plans (LPP). A poorly managed case can lead to scheduling problems, gaps in coverage, and internal tensions (HR, CFO, operations, employees).

Reading promise: you will leave with a “pilot, document, follow” method to understand the LAA-AI-LPP sequence, secure decisions (and expectations), and structure your exchanges with the accident insurer, the AI office and the pension fund.

1) Who intervenes after an accident: LAA, AI, LPP in a pilot reading

LAA: the point of entry in case of an accident (and sometimes occupational disease)

Accident insurance (LAA) is the first thing companies should consider in the event of an accident. It covers occupational accidents, non-occupational accidents (subject to conditions), and occupational illnesses. The Old-Age and Survivors' Insurance (AVS/AI) Information Center also highlights a useful point for SME management: the maximum amount of insured earnings under LAA is set at 148,200 francs per year (406 francs per day).

Why this is important: part of your LAA benefits (daily allowances, annuities) is calculated based on your insured earnings. When your salary exceeds this maximum, there may be a gap that needs to be managed through supplementary LAA insurance or other benefits, depending on your portfolio structure.

AI: Disability assessment and the “rehabilitation then pension” logic

The disability insurance (first pillar) assesses the degree of disability and applies a pension system. The Old-Age and Survivors' Insurance/Disability Insurance Information Centre reminds us that a disability rate of less than 40% does not entitle individuals to a disability pension.

Another key management indicator: since 2022, there has been a system of pensions (with percentages) linked to the degree of disability. The Central Compensation Office (ZAS) illustrates, for example, that a disability rate of 40% corresponds to a percentage of 25% of a full pension in the new system.

LPP: the 2nd pillar which complements the AI, according to rules based on the degree of AI

Regarding occupational pension plans (LPP), the Federal Social Insurance Office (FSIO/BSV) indicates that a disability rating of at least 40% is required to qualify for an occupational pension. At 70%, the pension is full; between 50% and 69%, the pension corresponds to the degree of disability.

This is a key point: in practice, the AI assessment “pushes” the LPP logic, but the pension fund must also verify insurance and affiliation conditions.

2) The decision-making process: from accident to disability (timeline and checkpoints)

Step 1: Announce, open the case, stabilize the facts

Immediately after the accident, the company must open the LAA file with basic discipline:

• dated and consistent facts (circumstances, location, witness if relevant)

• incapacity for work (certificates, rates, periods)

• temporary adjustments (position, hours, restrictions)

The goal is to avoid the "grey area" between accident, illness, relapse, and permanent disability. This isn't just a formality; it's what will allow medical, legal, and financial decisions to be aligned.

Step 2: Short-term LAA benefits and return-to-work follow-up

Suva reminds us that, if the insured suffers a total incapacity for work, the daily allowance corresponds to 80% of the insured earnings (proportional reduction if partial incapacity) and that the right arises on the 3rd day after the accident.

For an SME, the challenge is twofold:

• follow the schedule (when the allowance starts, when it ends)

• document everything that establishes the continuity of the case (certificates, relapses, decisions)

Step 3: Medical stabilization and transition to disability assessment

When the condition stabilizes and earning capacity remains permanently reduced, the question of disability arises. The CFST (Federal Coordination Commission for Occupational Safety), in its LAA guide, points out that an LAA disability pension requires a disability of at least 10% resulting from an accident, and that in the event of total disability, the pension reaches 80% of the insured earnings (proportional reduction in the case of partial disability).

This is often the most sensitive moment internally: the employee envisions a "fixed income", the company wants to understand "who will pay what" and "for how long".

Step 4: Coordination of pensions and ceilings

According to the CFST's LAA guide, if the insured is entitled to an LAA pension and an AI (or AVS) pension, the sum of the two pensions must not exceed 90% of the insured earnings.

Steering decision: do not reason “annuity by annuity” but “coordinated overall income”, anticipating the ceiling effect.

3) Benefits and coordination: who pays what (LAA vs AI vs LPP)

The goal is not to become a lawyer, but to know how to read a file: short-term benefits, long-term benefits, then coordination.

What the LAA typically covers in a disability case

• Daily allowance: up to 80% of the insured earnings in case of total disability.

• Disability pension: from 10% disability; 80% of the insured gain in total disability; proportional reduction.

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

• Basic reference point on the LAA insured earnings limit: 148,200 francs/year (406 francs/day).

What AI brings (and what it doesn't bring)

• No disability pension if the degree of disability is less than 40%.

• A logic of quota and annuity system (especially since 2022) according to the degree of disability; illustrative example of the ZAS: 40% entitles the holder to 25% of a full annuity.

• In terms of amount, the OFAS/BSV publishes ranges for a full AI pension in the event of a full contribution period (between 1,225 and 2,450 francs per month depending on income).

Governance point: this figure is not “a quote”, but an official benchmark to frame expectations and scenarios.

What the LPP complements (and why this is often the “real issue” for SMEs)

• Entitlement to an LPP disability pension from 40% disability; full pension from 70%.

• The OFAS/BSV reminds us that LPP disability benefits aim to guarantee income in the event of inability to earn due to illness or accident and that they complement the 1st pillar, with a calculation based in particular on the degree of disability.

In an SME, the LPP (and the supplementary pension scheme, if present) often determines the gap between “needs” and “replacement income”, especially if the salary exceeds the LAA maximum.

Quick reading chart (without made-up numbers)

Subject LAA AI LPP

Accident (and related cases) trigger. Disability assessed according to AI rules. Disability (often aligned with AI) and LPP insurance conditions.

Disability pension threshold: From 10% disability. No pension if <40%. Entitlement from 40%, full pension from 70%.

Coordination logic: LAA + AI/AVS combined, capped at 90% of insured earnings. Amounts based on rates, current system described by the ZAS. Supplements the 1st pillar; calculation based on degree of disability.

Salary base. Guaranteed earnings capped at 148,200/year. According to disability insurance (AI) pension rules (official published ranges). Depends on the mandatory/supplementary occupational pension plan (LPP) and the pension fund's rules.

Two mini case studies (SMEs): pilot scenarios

Mini-case 1: serious accident, partial return to work followed by lasting after-effects

• Phase 1: LAA daily allowances (80% of insured earnings if total disability, reduction if partial).

• Phase 2: stabilization, assessment of possible LAA disability from 10%.

• SME decision: prepare a “coordination plan” before the annuity switch: what target income, what expected share of AI, what share of LPP, what risk ceiling LAA+AI at 90% of the insured gain.

Mini-case 2: Salary above the LAA ceiling, question of gap

• Reference point: LAA guaranteed gain capped at 148,200 francs/year.

• Risk: believing that “LAA will cover everything”, when part of the income does not fall within the insured gain.

• Steering: map the supplementary coverage (LPP) and any additional coverage, and document the overall income scenario in case of disability (without promising an amount, but by outlining the mechanics and ceilings).

4) Guidelines and checklist

Governance benchmarks (executive, CFO, HR)

1. Decide on a single project manager (HR or CFO) and a monitoring frequency (weekly then monthly)

2. Separate three subjects: medical (findings), legal (decisions), financial (flows)

3. Anticipate pension coordination: LAA+AI/AVS cap at 90% of insured earnings

4. Check the “guaranteed earnings ceiling” stake: 148,200 francs/year in LAA

5. Update your LPP pension plan (mandatory and supplementary), as the LPP complements the AI and depends on the degree of disability.

Box: What needs to be documented

• Accident report and factual description (dated, signed, consistent)

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

• History of work stoppages, partial resumptions, and job adjustments

• Correspondence between insurer and accident claimant (requests, decisions, documents transmitted)

• Any decision regarding rehabilitation, attempted resumption, or adjustments

• AI decisions or communications (filing, exchanges, evaluations)

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

• A “timeline and decisions” table (dates, documents, next action)

Operational (actionable) checklist

• First and foremost: confirm LAA coverage and the competent insurer, then open the case

• Within 1 week: complete factual file + certificate schedule + single internal contact

• Monthly: tripartite HR-CFO-operations status review (capacity, adaptations, trajectory)

• Regarding disability: prepare a coordination memo for LAA-AI-LPP (ceilings, thresholds, documents) with official references: LAA pension from 10%, AI pension from 40%, LPP pension from 40%

5) Common mistakes and how to avoid them

1. Confusing inability to work and disability

Incapacity for work (certificates, rates) is not sufficient to qualify for a pension: disability is defined as a permanent loss of earning capacity (LAA/AI/LPP principles). The CFST reiterates the definition of disability as defined by the LPGA in its LAA guide.

2. Promising a “replacement rate” without integrating coordination

The LAA+AI/AVS cap at 90% of the insured gain can change the actual outcome.

Solution: communicate in scenarios (mechanics, steps, dependencies), not in certainties.

3. Forget the “guaranteed earnings ceiling” effect for high salaries

The guaranteed LAA gain is capped at 148,200 francs/year.

Solution: trigger a review of LPP/super-mandatory “gaps”, without waiting for the end of the case.

4. Launching the AI too late or without a clean folder

While this article is not a substitute for professional advice, field experience shows that an incomplete file lengthens the process. Solution: prepare the timeline, essential medical documents, and elements of rehabilitation/return-to-activity testing.

5. Do not align HR, CFO and manager

Without governance, contradictory messages multiply. Solution: a leader, a dashboard, factual communication, and an up-to-date parts list.

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

1. On what basis do you calculate the insured gain in our case and how do you apply the LAA ceiling (148,200/year)?

2. How do you confirm the point at which daily allowances and annuity are switched (and what documents trigger the decision)?

3. How do you deal with a partial resumption and rate fluctuations (impact on the daily allowance)?

4. At what point do you consider an LAA disability pension (10% threshold) and according to what proportional reduction logic?

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

6. From our perspective, what evidence do you expect regarding rehabilitation measures and attempts at recovery?

7. For AI (Disability Insurance): what documents do you recommend preparing to expedite the process, and what points often cause roadblocks? (without infringing on medical confidentiality)

8. For the LPP: which fund is competent, what are the insurance conditions, and how does it coordinate with the AI?

9. Is our LPP sufficient in case of partial disability (40% to 69%) and how is the degree translated into a pension?

10. Can you review with us, once a year, the consistency of “LAA ceiling + AI + LPP (mandatory/super-mandatory)” to avoid gaps?

Conclusion

In the event of disability following an accident, the question isn't "LAA, AI, or LPP," but rather "how these three systems coordinate." Key points to keep in mind: LAA benefits are available from 10% disability, AI benefits only from 40%, LPP benefits from 40% and full benefits from 70%, coordination of LAA+AI/AVS benefits is capped at 90% of the insured earnings, and LAA insured earnings are capped at CHF 148,200 per year. A useful next step for SMEs is to formalize an internal "disability after accident" form (including responsible parties, timeline, supporting documents, and decision points) and link it to your claims management process.