Unions Reject GEMS Contribution Hike, Demand Affordable Solutions

Two major public service unions, the Public Servants Association (PSA) and Nehawu, have rejected the Government Employees Medical Scheme’s (GEMS) 13.4% membership fee increase for 2025, calling it unaffordable and harmful to workers.

Representing nearly 500,000 state employees, the unions are urging GEMS, the National Treasury, and the Department of Public Service and Administration to halt the implementation of the hike. They argue that the increase undermines wage agreements negotiated at the Public Service Coordinating Bargaining Council (PSCBC) and exacerbates the financial burden on public servants.

Nehawu expressed strong dissatisfaction, accusing GEMS of straying from its original purpose of providing affordable medical coverage for state employees.

“GEMS has become a financial burden on public servants, with yearly increments making it unaffordable for many,” Nehawu said.

The PSA echoed these sentiments, describing the hike as “exorbitant” and claiming it has effectively reduced net salaries for many employees.

“The 13.4% increase has left our members frustrated and angry. We will engage with other unions to find alternative solutions to this crisis,” the PSA stated.

GEMS defended its decision, citing healthcare inflation as the driving factor. The scheme noted it had kept contributions lower in recent years by using reserves, resulting in R10 billion in savings for members.

“To keep offering good value, we now need to adjust contributions to match healthcare inflation,” GEMS explained.

This dispute coincides with ongoing salary negotiations between state employees and the government at the PSCBC. Unions rejected the government’s initial 4.7% salary increase proposal in December and revised their demands to between 5.5% and 6%.

Unions fear that the GEMS hike could erode any gains from wage agreements, leaving public servants worse off.

With approximately 22% of South Africa’s medical aid market share by the end of 2023, GEMS serves 845,000 principal members and 2.27 million beneficiaries. Its size and market influence mean that changes in its contribution structure significantly impact public servants nationwide.

Unions are now exploring alternative solutions to ensure affordable medical assistance for their members. Both PSA and Nehawu have vowed to intensify efforts to challenge the fee hike and prevent further financial strain on state employees.

As government negotiators prepare to respond to union salary demands at the PSCBC, the standoff over the GEMS contribution hike is set to escalate. Public service unions are calling for unified action to ensure medical aid affordability while safeguarding employees’ financial stability.

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