Union members of the Government Employees Medical Scheme (GEMS) have threatened to withdraw from the scheme – and are investigating legal action, as well as suggesting further protests – if the contributions increases are not withdrawn, reports Business Day.
In response, GEMS is offering bilateral talks to defuse the rising tension.
Cosatu, the Federation of Unions of South Africa (Fedusa) and the Public Servants Association (PSA) have said that despite state subsidies, the scheme’s recent premium hikes are more than double the pay increases awarded to civil servants.
They have also accused the scheme of “not serving its purpose, but serving the principal officer and executives”.
GEMS has almost 2.45m beneficiaries, and is available only to civil servants and their dependants. Most employer groups in government offer a subsidy of up to two-thirds of a member’s monthly medical scheme contributions, but only if they join GEMS.
In January, GEMS imposed a weighted average premium increase of 9.8%, which it later reduced to 9.5% in February. This followed a 13.4% weighted average premium hike in 2025. Civil servants were awarded a 5.5% salary increase in 2025/26 and are in line for a 4% pay rise in 2026/27.
Public sector unions protested last month and are threatening to do so again unless GEMS backs down on its contribution increases. They also want members to be given the freedom to choose their medical scheme without losing their subsidies, and for a forensic audit of the scheme’s governance, finances, and procurement and administrative practices.
GEMS board chair Nomzamo Tutu wrote to unions last week in response to their demands but did not yield any ground. The board is satisfied that appropriate governance and oversight systems are in place, she said.
On Monday, GEMS COO Vuyo Gqola defended the scheme’s position, saying it experienced unexpectedly high claims last year and has been forced to hike premiums to ensure its solvency ratio does not fall below the statutory requirement of 25%.
The scheme received contribution income of R65bn but paid out claims of more than R67bn in 2025, she said.
In response to unions’ concerns, she defended expenditure on executive and trustee remuneration, saying it was in line with industry norms.
However, the unions have called for the removal of the principal officer and scheme executives and criticised the frequency with which the board of trustees meets.
There were 53 board meetings last year, generating more than R1.4m in fees for each trustee, according to Cosatu public sector co-ordinator Itumeleng Molatlhegi.
Public sector unions are also questioning why GEMS forks out so much on marketing initiatives like billboard and television advertisements when it has a captive market, said Molatlhegi.
Gqola said the marketing and sponsorship of events like the Comrades Marathon was necessary to attract new members, and added that the scheme had received 18 successive unqualified audits since it began operating in 2006.
PSA GM Rueben Malaka said the union was seeking legal advice on whether it could take GEMS to court for deviating from its mandate to ensure affordable medical scheme cover for civil servants. It is also considering withdrawing from GEMS, he said.
Business Day article – Gems medical scheme offers talks to avoid union protests (Restricted access)
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GEMS given seven days to respond to union demands on steep hikes
Planned protests after trade unions reject GEMS hikes
Premium hike slammed by GEMS members