Application of Medical Insurance Re

On 13 February 2017, the Minister of Health issued a decision requiring public and private sector entities employing more than 500 employees in all Egyptian governorates to apply Chapter Five (Medical Insurance) of the Social Insurance Law. Chapter Five provides for the applicable subscription fees to the medical insurance program as well as the financial rights of the covered employees. Subscription fees are divided between the employers (3-4% of the employee’s salary) and the employees (1% of his/her salary). In the event that the entity subject to this clause has its own medical insurance program, it is entitled – after obtaining a permission from the social insurance authority – to receive a deduction on the subscription fees. Entities falling within the scope of this decision that do not already comply with the medical insurance provisions will have to review their social insurance subscriptions as soon as possible to avoid having to pay late fines.

Background

Medical insurance for employees is one of the issues regulated by the Social Insurance Law (the “Law”).[1] Unlike the rest of the Law provisions (covering for example pensions and work related injuries), the application of this program – contained in Chapter Five of the Law – did not become compulsory on all entities subject to the Law upon its promulgation. Instead, the Law provides for a gradual implementation of the medical insurance program. Accordingly, since the promulgation of the Law in 1975, many decisions have been issued requiring specific entities to comply with the medical insurance program. Some of these decisions address specific public sector entities, others address private sector companies of a specific size in specific governorates. These decisions continue to be issued to date with respect to public entities. However, decisions addressing the private sector have been scarcer, albeit with more sweeping effects.

Implementation on the Private Sector

In 1981, a ministerial decision was issued requiring the application of the medical insurance program on private and public sector entities that employ 5 to 499 employees in all governorates of Egypt.[2] In 1982, another decision was issued[3] requiring the continued application of the 1981 decision in cases where the total number of employees increased or decreased beyond that threshold. In 1983, a third ministerial decision was issued requiring the implementation of the medical insurance program on public and private sector entities that employ 1 to 4 employees in all the governorates of Egypt.[4] Finally, in 2017, the Minister of Health issued a decision requiring the implementation of the medical insurance program on private and public entities that employee more than 500 employees in all Egyptian governorates,[5] thereby finalizing the gradual implementation process that started in 1975, i.e. 42 years ago.

What Implementation Entails

1. Subscription Fees

Medical insurance is financed by monthly subscriptions that amount to 3% of the salaries of the insured employees at governmental and public entities and 4% of the salaries of employees of the private sector, (borne by the employers), in addition to 1% of salaries that is borne by the employees themselves. The 4% payable by private sector employers is divided into two sections: (i) 3% to cover medical care; and (ii) 1% to cover the compensation of the salaries and patient transfer fees. Entities wishing to implement a private medical insurance program are entitled to a reduction of the subscription fees covering medical care from 3% to 1% after they obtain permission from the Social Insurance Authority. Similarly, the competent minister is entitled to exempt private sector entities from the 1% subscription fee covering compensation of salaries and transfer fees in the event that the private sector entity undertakes to pay the same.

2. Financial Rights of Patients

By virtue of the medical insurance program, covered employees are entitled to receive compensation for their salaries during the first 90 days of sick leave equivalent to 75% of their daily salary. Such percentage is increased to 85% after the first 90 days of sick leave for another similar period. The medical insurance program entitles pregnant women to receive compensation for their salaries equivalent to 75% of their salaries during the period of the compulsory maternity leave.

3. Conditions for Application and Suspension

In order for private sector employees to benefit from this program, they must have been subscribed to the medical insurance program for at least three consecutive months or six non-consecutive months (provided the last two of the six months are continuous). As to pregnant women, they may only benefit from this program if they have been subscribed for at least ten months. Coverage is suspended in three cases: (a) during the period an employee temporarily works at an entity that does not apply the medical insurance program; (b) during compulsory military service; or (c) unpaid leave, secondment, and study leave. The above-mentioned program is applicable to the extent that the employees do not benefit from another medical program as per the rules and regulations of the employer.

Conclusion

Public and private sector entities which employ more than 500 employees are now required to subscribe to the medical insurance program provided for in the Social Insurance Law. This medical insurance program entails payment to covered employees of compensation equivalent to 75-85% of their salaries during sick leave for a maximum period of 180 days. By issuing this decision, the Minister of Health has ensured the application of the medical insurance program by all private sector entities. It is, however, to be noted that, since 1981-1982, all entities which employ 5-499 employees have been required to apply the medical insurance program even if their headcount increased or decreased beyond that threshold. Therefore, many of the entities that employee more than 500 employees will be already applying this medical insurance program by virtue of the 1981-1982 decisions. However, a review of current social insurance subscriptions might be necessary in order to ensure full compliance with the new decision.   [1] Social Insurance Law No. 79/1975, Official Gazette, Issue No. 35 (cont.), 28 August 1975. [2] Minister of Health Decision No. 858/1981 on the implementation of medical insurance provisions on the employees of the public and private sector entities where 4-499 employees work in all the governorates of Egypt, Egyptian Gazette, Issue No. 271, 29 November 1981. [3] Minister of Health Decision No. 160/1982 amending certain provisions of the Minister of Health Decision No. 858/1981, Egyptian Gazette, Issue No. 104, 5 May 1982. [4] Minister of Health Decision No. 553/1983 on the implementation of medical insurance provisions for in the Social Insurance Law No. 79/1975 on the employees of the public and private sector entities, Egyptian Gazette, Issue No. 60, 10 March 1984. [5] Minister of Health Decision No. 79/2017 on the implementation of medical insurance provisions on the employees of the public and private sector entities where 500 employees or more work in all the governorates of Egypt, Egyptian Gazette, Issue No. 52, 4 March 2017.