Certificate of Coverage: Complete guide for employers

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What is Certificate of Coverage (CoC)?

The Certificate of Coverage (CoC) is an essential document that proves which country's social security system applies when an employee temporarily works abroad. Specifically, it confirms that the employee remains subject to social security in their home country and continues paying contributions there, rather than needing to pay into the host country's system.

Why does this matter? Under normal social security rules (called the "territoriality principle"), you must pay social security contributions in the country where you actually work. This would mean that even a short business trip could require paying into the host country's system - creating a fragmented and complicated process for anyone working temporarily in different countries.To prevent this problem, many countries have signed bilateral Social Security Agreements (also called totalization agreements). The Certificate of Coverage is the official document that proves these agreements apply to your specific situation, allowing employees to remain in their home country's social security system even when working temporarily abroad.

The CoC applies globally to any country pair with a valid Social Security Agreement in place. This makes it the international equivalent of the A1 certificate, which is specifically used within the EU/EEA region (EU member states plus Iceland, Liechtenstein, Norway, and Switzerland).

What does the CoC cover? The certificate typically covers multiple branches of social insurance, which may include pensions, unemployment insurance, work accident insurance, and healthcare - though the exact coverage depends on what's included in the specific bilateral agreement between the two countries.

💡 Learn more:

• What is an A1 certificate?

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How does the Certificate of Coverage differ from the A1 certificate?

While the A1 applies exclusively to work within certain European countries (EU member states plus Iceland, Liechtenstein, Norway, and Switzerland), the CoC can be issued for foreign assignments in any country with a Social Security Treaty in place with your home country.‍

Despite their geographic differences, both documents serve the same essential purpose: they declare that the employee can remain covered - either totally or partially in specific social insurance branches - in their home social security system when traveling to another country for work. They ensure employees:

• Continue contributing to their home country system
• Avoid double contributions (paying into both home and host country systems)
• Maintain continuous coverage without gaps

The key distinction is simply which countries they apply to and which agreements govern them:

• A1 certificates: Governed by EU Regulation 883/2004; apply within Europe
• Certificates of Coverage: Governed by individual bilateral treaties; apply between any two countries with such an agreement

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Understanding totalization agreements

Before applying for a Certificate of Coverage, you must first verify whether a totalization agreement exists between your home country and the destination country. Not all countries have bilateral social security agreements with each other. This is a critical first step that many organizations overlook.

If no treaty exists between the countries involved, you cannot obtain a Certificate of Coverage for that destination. The rules that apply instead depend on your home country's domestic regulations (see the section below on countries without agreements).

Where to check: Your home country's social security authority typically maintains a list of countries with which they have bilateral agreements. These lists are usually available on their official websites or through direct inquiry.

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What if there's no Social Security Agreement in place?

For countries that don't have bilateral social security agreements, the coverage rules vary significantly depending on your home country's domestic legislation. This is where things become more complex and country-specific. Here are some examples of coverage rules by home country:

• Germany and Austria: These countries have domestic laws stating that if your employer sends you abroad and your home employment contract remains the governing contract for your assignment, you automatically remain in the home social security system. This provides protection even without a formal Certificate of Coverage.
• Netherlands: Dutch law treats business trips as not breaking the employment relationship, so employees naturally remain covered under the Netherlands social security system during temporary work abroad.
• United Kingdom: The UK has no clear statutory rule for third-country assignments. For longer assignments to countries without treaties, employees may need to make voluntary contributions to maintain their coverage in the UK system.
• For other countries: Consult your national social security authority to understand what rules apply when sending employees to countries without bilateral agreements.

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The employer's responsibility

Regardless of whether a treaty exists, you should always try to keep your employee covered in the home social security system. While this doesn't guarantee protection from potential host country obligations (the host country may still claim contributions are due), it at least ensures your employee has protection and coverage from their home country.

Reminder: ⚠️ In most employment situations, the employer bears responsibility for ensuring proper social security coverage, and employees are typically not held personally liable for administrative compliance gaps. However, this may vary by jurisdiction and employment status (self-employed individuals bear their own compliance responsibility).

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Who needs a Certificate of Coverage?

Anyone working temporarily in a country outside the EU/EEA (but with which their home country has a bilateral social security agreement) needs a Certificate of Coverage. This includes:

• Employees sent abroad by their employer for business trips or temporary assignments
• Self-employed individuals working temporarily in treaty countries
• Civil servants on temporary postings abroad (depending on the specific agreement)

The requirement applies from day one: You need a Certificate of Coverage from the moment the border is crossed and work activity begins. There is no minimum duration threshold - even very short work trips technically require proper documentation. The key distinction is work activity: When someone travels abroad purely for vacation, they don't need a Certificate of Coverage. But the moment work enters the picture - even opening a laptop to respond to emails - the CoC requirement applies.

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Who should apply for a Certificate of Coverage?

The employer is legally required to apply for the Certificate of Coverage, not the employee. This is a critical distinction that many organizations don't fully understand.

Why the employer must apply:

• The employer is the party sending the employee abroad for work purposes
• The application requires confirmation that actual work will be performed in the host country
• A job must exist for the employee to return to in the home country
• The assignment must have a clear, determined end date
• The employer has ultimate responsibility for social security compliance

Why employees cannot apply independently: Employees cannot obtain Certificates of Coverage on their own for potential future trips or "just in case" scenarios. The CoC specifically certifies work-related travel under the employer's direction and must reflect actual, planned work assignments with specific dates and purposes.

Example: An employee cannot decide to get a Certificate of Coverage for a personal extended stay abroad where they might occasionally work remotely. The employer must apply based on legitimate business assignment needs.

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How long is a Certificate of Coverage valid?

The validity period of a Certificate of Coverage depends on the specific bilateral agreement between the countries involved. However, general principles apply across most agreements:

Defining "temporary" work

For a Certificate of Coverage to be issued, the work abroad must be genuinely temporary, meaning:

• Clear end date: There is a determined end date for the assignment (not open-ended)
• Intention to return: The employee has a clear intention to return to the home country
• Return job exists: A job exists for the employee to return to at home
• Temporary deviation: The work abroad represents a temporary deviation from the employee's normal work pattern, not a permanent relocation

Typical timeframes

The maximum validity period for Certificates of Coverage varies significantly depending on the specific bilateral agreement between countries, ranging from as short as one year to as long as five years for initial assignments. Always check the specific bilateral agreement between your home country and the host country to determine the maximum period allowed.

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Certificates of Coverage do NOT provide full health insurance

A common and potentially costly misconception: Many employers assume that obtaining a Certificate of Coverage means their employees are fully covered for healthcare costs during business trips and international assignments. ⚠️ This is incorrect.

While the CoC confirms which social security system applies (including which health insurance system provides coverage), it has significant limitations. Think of the CoC as determining which insurance system applies, not guaranteeing that all costs will be covered.

How the coverage gap occurs

Your home country's health insurance will typically only reimburse medical expenses according to domestic rates and rules, not the actual costs charged in the host country.

For example: If an employee needs medical treatment in a country where healthcare is significantly more expensive than at home, your home country's insurance might reimburse €100 for a procedure that actually costs €300 in the host country. Someone must cover that €200 gap - and that someone is the employer.

Why employers bear this cost risk

Under social security law, all cross-border work is classified as a "secondment" - the employer has actively sent the employee abroad for business purposes. This creates a duty of care obligation: employers are legally responsible for ensuring employees can access necessary medical care without incurring personal out-of-pocket expenses during business assignments.

The solution: Layered protection

Always provide comprehensive travel health insurance in addition to the Certificate of Coverage. This layered approach is essential:

• Certificate of Coverage: Handles the administrative/legal question of which social security system applies
• Travel health insurance: Handles the financial risk of actual medical costs abroad

This combined protection is particularly critical for:

• Business trips and assignments lasting more than a few days
• Travel to countries with substantially higher healthcare costs than your home country
• Any situation where employees might need specialist care, emergency treatment, or hospitalization

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How to request a Certificate of Coverage?

The application process for a CoC typically follows these steps:

1. Verify treaty existence: First confirm that a bilateral social security agreement exists between your home country and the destination country.

2. Contact the relevant authority: Employers must contact the relevant social insurance authority in the home country. This might be:

• A dedicated social security coordination office
• The national social security administration
• A specialized department handling international cases

3. Provide detailed assignment information: You'll need to submit comprehensive details about:

• The employee's personal information and social security number
• The nature of work to be performed abroad
• Exact dates of the assignment (start and end dates)
• The host country and specific location
• Confirmation that the employee will return to their home country job
• The employee's current social security coverage status

4. Application method: Depending on your home country, you may:

• Use an online portal (some countries offer streamlined digital applications)
• Submit paper forms by mail
• Apply through email correspondence with the authority

5. Processing and issuance: Once reviewed and approved, the authority will issue the Certificate of Coverage. The document serves as legally binding confirmation of continued coverage under the home country's social security system.

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What happens without a Certificate of Coverage?

Traveling and working without proper Certificates of Coverage can result in serious consequences for the employer:

Financial penalties and double contributions

• ‍Backdated contributions: If authorities discover an employee worked without proper CoC documentation, you may be required to pay social security contributions in the host country for the entire period worked - even if you were also paying into the home country system. This creates the exact double-contribution scenario the CoC is meant to prevent.‍
• Penalties and surcharges: Beyond the contributions themselves, you may face penalties, late payment surcharges, and administrative fines for non-compliance.

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Insurance coverage risks

If a work accident or medical emergency occurs and you don't have a valid Certificate of Coverage, your home country's social insurance may refuse to provide protection.

Can you fix this retroactively? Sometimes, yes - there are cases where authorities have allowed retroactive certification. However:

• This is not guaranteed and depends on specific circumstances
• If the same employer repeatedly works without proper documentation, authorities may conclude the employer is systematically failing to provide required benefits
• The employee shouldn't suffer for the employer's administrative failure

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Host country enforcement actions

Depending on the country and the nature of the work, local authorities may:

• Prohibit continued work: Stop the employee from performing services until proper documentation is provided
• Remove from premises: In some cases, workers without proper certificates have been physically removed from job sites
• Project delays: Being unable to complete work due to documentation issues creates business disruption beyond just penalties

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Reputational damage

Beyond financial costs, companies risk significant reputational harm when found non-compliant:

• Damage to relationships with clients (especially if employees are turned away from client sites)
• Harm to company reputation in the host country
• Potential complications for future business in that jurisdiction
• Internal reputation as an employer who doesn't properly protect employees

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How to simplify your Certificate of Coverage process?

Based on managing international business trips across multiple jurisdictions, here's what actually works for maintaining compliance:‍

• ‍Verify before you plan: Always confirm whether a bilateral social security agreement exists between your home country and the destination country.‍
• Apply accurately and early: Match Certificates of Coverage to actual business travel dates and work activities. Be specific about when and where work will occur, and apply well in advance - processing times vary dramatically by country, from days to months
• ‍Maintain proper documentation: Keep comprehensive records of all international business trips and assignments, including employee details, destinations, dates, and copies of all CoCs issued. This documentation is essential during audits or if questions arise later.‍
• Layer your protection: Always combine Certificate of Coverage with comprehensive travel health insurance. The CoC handles which social security system applies; insurance protects against the actual medical costs that may exceed home country reimbursement rates.‍
• Consider professional support: With increasing international business activity and varying requirements across countries, professional assistance can help ensure accuracy, proper timing, and full compliance across all your destinations. The key insight is that CoC compliance follows predictable patterns- once you understand the requirements and establish proper processes, it becomes routine rather than a crisis-management situation.

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WorkFlex is an all-in-one platform that handles Certificates of Coverage, A1 certificates, visas, PWDs, tax requirements, and employee duty of care on your behalf – so your global business knows no borders. More than 500 employers worldwide use our platform to automate the processing of social security certificates and other travel compliance documents in seconds, instead of weeks.

➡️ Book a free consultation with one of our experts to learn how WorkFlex can help make your company more efficient and compliant when employees travel for business.

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