Late in April 2018, President Edgar Lungu signed into law the controversial and much debated National Health Insurance Bill - Act No. 2 of 2018 (“NHI”). The objective of the legislation is to provide universal health care to all citizens.
Currently we are not sure of the actual implementation date, the contribution levels and other pertinent factors, so this note is simply to inform clients that the scheme will be implemented in the immediate future.
The employer’s obligations will be to deduct monthly NHI contributions and pay this over to the relevant authority. The level of contributions must still be ratified but during the vociferous debate leading up to the enactment of the legislation, a 1% of basic salary for both employer and employee was suggested.
Further Section 12(3) of the Act prescribes “that an employer shall register an employee with the Authority within thirty days of the commencement date of the contract of employment in the prescribed manner and form.”
For foreign workers, the legislation states that any foreigner should have travel health insurance for the period of their stay however, Section 14 (2) stipulates than if the foreign worker does not have valid travel insurance, they are required to register and contribute to the NHI scheme.
A problem which we do foresee is where the employer currently has a private health insurance scheme. There is little doubt that the private scheme would be superior to the NHI scheme and most companies would want to retain the private scheme. In this case, the 1% employer contribution to NHI would represent an additional cost of doing business in the country. Further, the employee 1% contribution may have to also be paid by the company especially where the employee is already contributing to the private scheme.
For more information please contact Grayson Hopkins on +27 11 305 1972 or email@example.com