Administration:
Agreement on medical assistance in the Public Service
22 June 2006
Following negotiations over the last few months, the State as an employer
and the trade unions to the Public Service Co-ordinating Bargaining Council
(PSCBC) concluded a collective agreement on Medical Assistance for Public
Service Employees on Tuesday, 20 June 2006.
The Agreement takes effect on 1 July 2006 and will usher in a new era in
medical assistance in the public service.
The Agreement gives effect to an earlier commitment by the parties to
restructure the medical benefits of the public service and is linked to
establishment of the Government Employees Medical Scheme (GEMS) that became
operational as at 1 January 2006.
The need for restructuring and transformation of medical assistance in the
public service was informed by the following:
a. Inequality in access to medical cover based on the income levels of
employees
Research indicated that more than 40% of all public service employees did not
enjoy the benefits of medical scheme membership. Since low-income employees
cannot afford medical scheme membership, they do not have access to the
employer subsidy and the same levels of health care enjoyed by higher income
employees.
b. Unchecked increases in expenditure on medical assistance
The employer experienced exceptionally high increases in expenditure on medical
assistance. It became clear that unless restructuring took place, the employer
would not be able to address the problem of inequality without exacerbating the
problem of cost.
c. Lack of value for money
The high increases in expenditure in respect of the employer subsidy was not
accompanied by the extension of the benefit to low income employees and those
employees who did access cover, reported that benefits are continually being
reduced.
As far as the Agreement goes, it seeks to address the following
principles:
* to ensure greater accessibility by providing affordable medical cover to all
employees especially lower-income earners to take up medical cover
* the alignment of the medical subsidy to the new tax structure
* the promotion of enrolment of employees to the Government Employees Medical
Scheme (GEMS)
* to ensure cost-effective medical cover for employees on GEMS over the long
term
* the efficient administration of the medical subsidy.
In terms of the Agreement the employer shall with effect from 1 July 2006
pay to employees who belong to or join GEMS, 75% of the employeesâ total
monthly medical contribution subject to a maximum of R1 900. The maximum
subsidy cap is comprised as follows:
* R500 per principal member
* R500 per first dependant
* R300 per each additional dependant;
All new employees and those currently not accessing medical cover need to
join GEMS to access the new subsidy. The status quo in respect of the
employerâs medical subsidy will be maintained for those employees that belong
to other registered medical schemes. These employees are however free to join
GEMS.
As of the 1st July 2006 employees who migrate from any open medical scheme
to GEMS shall continue to receive a monthly subsidy as at 30 June 2006,
provided that the amount does not exceed the employeeâs total monthly medical
contributions. In other words they will not be worse off.
Employees who join GEMS and thereafter terminate their membership of the
Scheme will forfeit the employerâs medical subsidy. However Trade Unions were
given the assurance in terms of the Agreement that in the event GEMS is
deregistered in terms of the Medical Schemes Act, employees belonging to the
Scheme may join any other registered Scheme without losing the employer
subsidy.
Further, GEMS offers a comprehensive HIV disease management programme to its
members and their dependants.
One of the main features of the Agreement, that supports the principle of
accessibility to medical cover for all employees, is the 100% subsidisation of
employees on salary levels 1,2,3,4 and 5 who belong to or join GEMS on the
Sapphire option. The subsidisation is limited to maximum cap of R1 900.
The current post retirement medical assistance remains unaffected. The
employer however gave a commitment to investigate this provision further and to
revert to the PSCBC by 1 April 2007.
Future adjustments to the employerâs subsidy will be subject to the
negotiation process in the PSCBC on salaries and conditions of service. The
employer further committed to return to negotiations in the event that the
annual membership subscriptions to GEMS increases beyond Medical Price Index
(MPI) or if there is a drastic reduction in benefits per year over the next
three-year period, commencing from 1 January 2007.
Since its inception the enrolment of public service employees to GEMS has
been encouraging to the extent that GEMS is the fastest growing medical scheme
in South Africa. This Agreement will further enhance the enrolment on the
Scheme.
For further information on enrollment and benefits contact GEMS at:
* Call centre: 0860 00 4367 between 08h00 and 16h30
* Fax: 0861 00 4367
* Visiting www.gems.gov.za
* E-mail enquiries@gems.gov.za
* Send an SMS to 083 450 4367 stating your PERSAL/PERSOL number
For presentations on GEMS and its benefits please e-mail presentations@gems.gov.za.
Issued by the Ministry for Public Service and Administration
22 June 2006
