Several media outlets published the story this week, estimating that the summer gathering for the agency's staff Castle Spa Wagenküll could have cost as much as €100,000 during a time of government cuts.

"Rain Laane informed the supervisory board of his plan to resign and will submit his resignation at the board's next regular meeting on August 22. The board has decided that we will accept it that day," Joller told the media following a meeting of the agency's board.

The minister added that Laane will remain in office until August 31 to ensure the transfer of management to an acting director.

The next meeting will also discuss the future strategy of the Health Insurance Fund.

"We have not been satisfied with the mindset the Health Insurance Fund has presented to us so far, and we have requested substantive proposals by August 22 on how to ensure the sustainability of the Health Insurance Fund and healthcare financing, and what the fund's further course of action should be," Joller said.

The politician said that the board could see that the agency's current leadership had failed to grasp the current difficult financial situation.

"This much-discussed summer event is a symptom that reflects a much broader problem in the entire management," Joller said.

She said this was the reason the board decided to grant Laane's resignation request on August 22.

"I acknowledge that he is taking responsibility in the current situation. This is also necessary to allow the organization to continue its work without doubts or mistrust lingering. It is very important to restore the Health Insurance Fund's credibility in the eyes of the public," Joller said.

"Right now, both the Health Insurance Fund and the entire health sector's reputation have been damaged," she added.

"I am very sorry that the head of the agency must leave in this way, but there is nothing to be done," she added.

She noted that the Health Insurance Fund's summer event cost around €84,000.

Joller said she sees no reason to resign as some politicians have suggested. "I believe I am performing my duties well, as I have drawn attention to this as a doctor, as a member of the board of the Family Doctors' Society, and I have worked toward this also while serving in the Riigikogu," she said.

Laane: I hope public sector will continue to care for employees

Health Insurance Fund chairman Rain Laane commented: "We have now reached a point where, to restore peace of mind among Health Insurance Fund employees, I am taking responsibility so that we can focus on substantial healthcare issues — the sustainability of the solidarity-based healthcare system, the shortage of healthcare workers, and the implementation of the development plan that will soon be completed."

He added: "Still, it is important to emphasize that I hope both the Health Insurance Fund and the rest of the public sector will continue to take care of their people, and that we will truly value public sector employees in our society. At the same time, we must be aware of the fragile balance between caring for people and maintaining a sense of societal fairness."

Earlier this week, Laane said he apologised if people had been offended by the event. "I am truly sorry if people feel bad because the Health Insurance Fund staff came together once during the summer after years of intense work. I sincerely regret that," he told Vikerraadio.

"Luxurious summer days"

This week, Õhtuleht and several other newspapers reported that the agency held a summer event for its employees at a spa and manor house complex that could have cost up to €100,000. This is during a period of budget cuts and rising prices.

The opposition Center Party called for Minister of Social Affairs Karmen Joller, from the biggest coalition party Reform, to resign. The Health Insurance Fund falls under her area of responsibility.

The local elections will be held in October, and one of the repeated criticisms of the Reform Party is that it is out of touch with ordinary people.

On Wednesday morning, Joller wrote on social media that "organizing luxurious summer days offends the sense of justice." Prime Minister Kristen Michal (Reform) reiterated a call for the agency to reshuffle its managers.

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