LAAC: What is a long-term annuity and what benefits can be expected after an accident (LAA and supplementary insurance)?

Introduction

In SMEs, a "long-term claim" isn't just an HR issue; it's a governance issue. When an accident results in lasting disabilities, the question quickly becomes: who pays for what, for how long, based on salary, and how to avoid a gray area between accident insurance (LAA), disability insurance (AI/AVS), and supplementary coverage. "Long-term annuity" is often the term used internally to describe this extended phase of benefits. You'll leave with a simple guide to help you decide, document, and track: when an annuity is considered to apply, what the LAA stipulates, what the LAAC can supplement, and what points to check in your contract and file.

1) “Long-term annuity” in LAAC: what are we really talking about?

1.1 A term of common usage, not a legal concept

In the LAA (Federal Law on Accident Insurance), the law and official guidelines refer to benefits (care, daily allowances, annuities, etc.). The concept of a “long-term annuity” is not a standardized legal category. In companies, it is generally used to distinguish:

• the short phase: treatment, recovery, daily allowance

• The long-term phase: annuities (disability, survivors), and benefits related to lasting impairments

This point is important for governance: if the vocabulary is not standard, your decision must be based on contractual definitions (LAAC) and legal rules (LAA).

1.2 The “short to long” switch on the LAA side

Suva clearly summarizes accident insurance benefits: medical care, expense reimbursements, and cash benefits. Cash benefits include, in particular, daily allowances and disability pensions, as well as survivor's pensions in the event of death.

For piloting, remember this key idea:

• The daily allowance covers the period of incapacity for work

• Disability benefits are used during the phase of sustained impairment of earning capacity (long-term approach)

2) What the LAA covers over time: useful benchmarks for decision-making

2.1 LAA disability pension: conditions and calculation logic

According to the CFST guidelines (LAA guide), the right to an invalidity pension exists from a degree of disability of at least 10% (references to the legal bases in the guide), and in the event of total disability the pension corresponds to 80% of the insured earnings, reduced proportionally in the event of partial disability.

The “long-term annuity” in the practical sense begins when one is in this register: a lasting, assessed impairment, with a formal decision, then a payment over time.

2.2 Coordination with AI/AVS: cumulative ceiling

According to the CFST guide, when a person is entitled to an AI or AVS pension in addition to the LAA pension, the sum of the pensions must not exceed 90% of the insured earnings (coordination principle).

For an SME, this has two impacts:

• Coordination needs to be anticipated (and therefore the AI/AVS documents and decisions)

• It is important to avoid “explaining” a final net amount to the employee before having a complete overview of the pensions involved.

2.3 The ceiling on insured earnings in LAA: the origin of the “discrepancies”

The maximum insured earnings limit in accident insurance is a key benchmark. The AHV/IV brochure indicates a maximum insured earnings amount under the LAA of 148,200 francs per year (and 406 francs per day).

A direct consequence of this is that beyond this ceiling, the LAA (Accident Insurance Act) does not cover the excess portion of salary. This is precisely one of the common roles of supplementary LAAC insurance: to fill part of this gap, depending on your contract.

3) What the LAAC typically adds: the “long-term annuity” on the supplementary side

3.1 Supplementing excess salary: the most frequent case

Pro Infirmis explains the mechanism: the law limits the insured gain in LAA, and for the portion of salary exceeding this limit, supplementary coverage may be necessary if the employer wants to provide coverage beyond the ceiling.

From a market perspective, the LAAC is presented as an extension of the LAA benefits (employer-side logic). For example, AXA describes the LAAC as a way to "broaden the scope of benefits" of mandatory accident insurance.

3.2 Concrete example of LAAC services geared towards “long term”

Contracts vary, but they often include:

• Disability and survivor's pensions on excess salary

• Capital in case of disability and/or death

• improvements in treatment comfort (e.g., hospital ward)

As an example, Groupe Mutuel explicitly states “disability/survivor's pensions for excess salary”, as well as excess salary coverage options (according to contractual percentages and limits) and semi-private/private room benefits according to solutions.

For your internal governance, the question is not “is the LAAC good”, but “what share of salary and social risk do we want to bear, and how do we document it”.

3.3 Note: “long-term annuity” can mean two things in business

In internal communications, “LAAC long-term annuity” can refer to:

1. an annuity in the strict sense (regular payments linked to disability or death, sometimes based on excess salary)

2. More broadly, all the financial effects that unfold over time after an accident (LAA coordination, AI/AVS, possible LPP disability, etc.)

To avoid misunderstandings, formalize an internal definition:

• “long-term annuity” = annuities (disability/survivors) + coordination rules + salary scope (LAA ceiling and excess)

4) Two mini case studies: what the SME needs to manage

Case 1: Frame above the LAA ceiling, lasting consequences

Situation: A key employee suffers an accident with lasting consequences. Their salary exceeds the LAA ceiling (148,200/year).

Risk for SMEs: you discover late that the LAA annuity (80% of the insured gain in total disability, according to LAA rules) only applies to the insured gain, therefore capped.

Pilot decision:

• Check if your LAAC covers excess salary in the form of a disability pension (and at what level)

• clarify the role of LAA coordination with AI/AVS (cumulative ceiling of 90% of insured earnings in certain cases)

• produce an internal decision note (HR/CFO) explaining the salary basis, the scope of coverage and the timeline for expected decisions (LAA, AI/AVS)

Case 2: Death, beneficiaries, long-term annuity expectations

Situation: an accident results in a death. The question becomes “what do the survivors receive, and on what basis”.

LAA reference: Suva lists survivors' pensions (and the principle of supplementary pensions linked to AVS/AI) in LAA benefits.

SME risk: the family compares previous income and annuities, and the company is approached even though the insurer must first process the case.

Pilot decision:

• secure the documentary chain (declaration, documents, contact details of the rights holders)

• check if the LAAC provides for survivor's pensions on excess salary or a supplementary death benefit (example of market logic: Groupe Mutuel announces annuities on excess salary and death benefit depending on the solution)

• Framing factual communication: “what is established” vs. “what depends on decisions and coordination”

5) Guidelines and checklist (actionable)

Decision-making checklist (CFO/HR)

1. Identify the competent LAA insurer and the scope (occupational/non-occupational accident, etc.).

2. Confirm the insured gain and the applicable LAA ceiling (and therefore the existence of excess salary).

3. Map your supplementary LAAC coverages (disability/survivors' annuities on excess, capital, hospitalization).

4. Anticipate coordination with AI/AVS (cumulative ceiling and sequencing of decisions).

5. Define a single case manager (HR or claims management) and CFO validation for any promise of extra-contractual support.

6. Set up a follow-up: medical milestones, insurer decisions, points of contact, document versioning.

Box: What needs to be documented

• Accident report and circumstances (dated facts, witnesses if available)

• Employment contract, activity rate, job description, compensation elements (fixed/variable according to internal rules)

• Medical certificates, reports, work capacity decisions (versions, dates of receipt)

• Correspondence with the LAA insurer and, where applicable, LAAC

• History of absences and returns (scheduling, job adjustments)

• AI/AVS decisions if they are involved (for coordination)

• Internal calculation: “LAA-insured salary” vs. “excess salary” and expected impacts (without promising an amount until confirmed)

Dashboard (without unsourced figures)

LAA (basic) LAAC (supplementary) subject SME decision to be formalized

Salary base. Guaranteed earnings capped (stated legal maximum). Often extended to excess salary according to contract. What level of extension and for whom (staff categories)?

Short-term phase: Daily allowance in case of incapacity for work (LAA logic). May supplement deadlines/discrepancies depending on the solution (varies). Who manages the return to work and medical evidence?

“Long” phase: Disability pension and survivor's pensions according to LAA rules. Pensions based on excess salary or capital according to contract. Internal definition of “long annuity” + decision governance

Coordination of cumulative benefits with AI/AVS (90% of the insured gain). Contractual coordination to be verified (avoid duplication). This consolidates the overall view (HR/CFO).

6) Common mistakes and how to avoid them

1. Confusing “inability to work” and “disability”

Daily allowances are paid for periods of incapacity for work; disability pensions are paid for periods of permanent impairment of earning capacity. Use the LAA guidelines (Suva, CFST) to clarify the terminology.

2. Discovering the LAA ceiling effect too late

The ceiling on insured earnings is a key factor: document it as soon as the file is opened and immediately identify the excess salary.

3. Promising a “pension level” before the AI/AVS coordination

Coordination can limit the cumulative effect. Communicate about the method and steps, not about an unconfirmed numerical result.

4. Do not reread the LAAC contract, clause by clause

LAAC benefits are contractual and vary. Read them carefully, focusing on decisions such as salary supplements, annuities, lump sums, hospitalization, and exclusions.

5. Allowing “long-term annuity” to become an ungoverned emotional issue

Establish a regular progress meeting (HR, CFO, manager) with a factual status: decisions received, missing parts, next steps.

Questions to ask your insurer/broker (10 questions)

1. In our LAAC contract, what exactly do you mean by “annuity” (disability, survivors) and on what salary basis?

2. Is salary exceeding the LAA ceiling covered, and at what contractual level (and for which employee categories)?

3. In case of disability, how do your LAAC benefits interact with the LAA pension (and the AI/AVS coordination)?

4. What documents trigger the “long phase” procedure (medical, decisions, consolidation) and what are your indicative processing times?

5. What are the typical cases of reduction or exclusion in LAAC (and how do they compare to possible reductions in LAA)?

6. Does the LAAC provide for disability and/or death benefits, and how does it coordinate with other company coverages?

7. Benefits abroad: what are the limits and procedures (care, repatriation, etc.)?

8. For survivor's pensions, what documents are required and what is the process for validating beneficiaries?

9. Do you have a checklist of “essential documents” to avoid back-and-forth communication (and reduce decision-making time)?

10. Can you help us formalize an annual “management plan”: audit of excess salaries, adequacy of guarantees, feedback from claims experience?

Conclusion

The “long-term annuity” in the LAAC (Accident Insurance Act) is primarily a matter of clarity: clarifying what falls under the LAA (annuities, coordination, insured earnings cap) and what your LAAC actually supplements, often based on excess salary. Sound decisions are made early, based on the case file: salary basis, scope of coverage, supporting documents, milestones. A useful next step: consolidate an internal “manage, document, monitor” page for your potentially long-term accidents, then verify, with the LAAC contract in hand, your coverage discrepancies for critical roles and salaries.