Friday, 19 July, 2024
HomeMedical SchemesNHI will make it harder to attract skilled staff – law firm

NHI will make it harder to attract skilled staff – law firm

With the signing of the National Health Insurance (NHI) Act into law, it may eventually become harder for companies trying to attract talent, according to a local law firm, which says that employers customarily offer perks like private healthcare in efforts to lure good staff.

Cliffe Dekker Hofmeyr (CDH) said the point of departure on an employment perspective is the funding of the NHI fund, reports BusinessTech.

The NHI Act names three primary sources of funding for the fund: a payroll tax on employees, raising personal income tax, and redirecting most of the approximately R250bn spent on private medical aid schemes to the fund.

“SA has a skills mismatch and the race for talent is fierce. Employers here compete with both local and international competitors in a shallow talent pool for workers who have valuable, industry-specific skills,” said CDH.

“To attract and retain staff, employers often offer perks like private healthcare. The NHI Act may, in time, require employers to think of alternative creative perks to attract employees due to the dilution of the benefit of private medical health insurance.”

CDH said the practical implications of the hybrid fund remain unclear, and could mean that employees would have to contribute towards the fund and elect to contribute to a private medical aid scheme to access services excluded from the fund.

It is believed that the employer’s role will be that of the Unemployment Insurance Fund (UIF) model regarding the Fund contribution.

“Employers who contribute towards their staff’s medical aid benefits may potentially continue to contribute towards both the Fund and private medical aid schemes. Any extra costs will probably affect profitability.”

The law firm added that employers would then be expected to update their health policies and benefits to reflect the coverage offered by the Fund and their chosen medical scheme, if any.

“It is important to note that until the NHI Act can be implemented, the status quo remains, and there is no immediate impact on private medical aid schemes, members of private medical aids, and private medical healthcare benefits offered by employers.”


BusinessTech article – Law firm flags NHI ‘point of departure’ (Restricted access)


See more from MedicalBrief archives:


Medical schemes and union kickstart NHI legal challenges


Government open to more talks and ‘collaboration’ on NHI


Let’s be pragmatic to make NHI work for us






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