Extension of Benefits by the Mexican Social Security Institute (IMSS) for Unemployed Workers

February 18, 2009
Extension of Benefits by the Mexican Social Security Institute (IMSS) for Unemployed Workers

On January 7, 2009, Mexican President Felipe Calderon issued the National Decree to Benefit Family Economics and Employment for Family Well Being(the “Decree”). The Decree seeks to protect jobs and support family income. Among other aspects, it extends Social Security coverage to unemployedworkers. Retroactive to January 1 st , employees are entitled to medical and maternity coverage from the Mexican Social Security Institute, which coverage hasbeen extended from two to six months for workers who have lost their jobs, and for their dependents. To pay for the referenced increase in benefits, Mexico’sFederal Government will provide up to 2.6 million pesos. In accordance with the Decree’s provisions, the IMSS will publish specific rules for implementingthe program in the Official Journal of the Federation (Diario Oficial de la Federación), including among others: (i) the extension of the period for preservingthe rights of workers for sixteen additional weeks, on top of the eight weeks prescribed by law, so that those beneficiaries will be insured from January 1 stthrough June 30, 2009, which extension will include medical/surgical, pharmaceutical and hospitalization assistance; (ii) establishing the requirement that theemployees be registered immediately and uninterruptedly before the IMSS for at least eight weeks in order to receive such benefits; and (iii) instructions tothe IMSS Department of Finance to agree with the Mexican Department of Finance and Public Credit on the mechanism to provide IMSS with sufficientresources to pay for the additional cost generated from such extension of medical coverage.

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