Indonesian parliament passes social security bill

Indonesian parliament, the The House of Representatives, approved the controversial social security providers (BPJS) bill, in a dramatic decision that has been hailed as a victory for the deprived and a possible blow to employers, local media reported on Saturday. The House and the government finally passed the bill into law in a plenary session on Friday evening following an agreement between factions in the ruling coalition and the Indonesian Democratic Party of Struggle (PDI-P) regarding several contentious issues in the bill. All factions, which had been determined to avoid voting on the fate of the long-delayed bill, agreed that the so-called BPJS I that is tasked with providing healthcare scheme for all citizens would start operating in January 2014, while BPJS II that will run the occupational accident, old-age risk, pension and death benefit schemes would operate by July 2015 at the latest. The BPJS will implement the compulsory social security services mandated by the National Security System Law, which was enacted seven years ago but prevented from taking effect due to the absence of a special organizing body that would manage the programs. The BPJS law transforms the four state-owned insurance companies PT Askes, PT Jamsostek, PT Taspen and PT Asabri into non- profit public companies under presidential jurisdiction, the Jakarta Post reported. Askes will be transformed to handle the healthcare program and Jamsostek will provide the four other programs. The fate of Taspen and Asabri was entrusted to the government but their assets and human resources will be integrated into the national social security system. The nation is divided over the populist bill as it remains unclear how the existing insurers that cater to different segments of the population will be merged into two non-profit entities. The total assets of the four companies are estimated to be 195 trillion rupiah (about 23.01 billion US dollars). The money will be used to fund the two new social security providers if the merger takes place.