The Insurance Association of Jamaica (IAJ) has added its voice to those that are cautioning the Government against imposing a General Consumption Tax of 16. 5 per cent on group health insurance premiums as part of its tax package to fill the $13.5 billion shortfall in the 2017/18 budget.

“The IAJ is concerned that this decision will increase the cost to both employers and employees, and will have a negative impact on the efforts of the industry to increase the number of persons who have health insurance,” Chief Executive Officer of Guardian Life Limited, and President of the IAJ, Eric Hosin told the Jamaica Observer a day after finance minister Audley Shaw announced the revenue measure, which is expected to yield about $1.88 billion.

The new tax will become effective April 3. The premium for group health is usually shared by employers and employees, and there are fears that there could be any number of consequences resulting from the tax, such as some employers opting to drop health insurance benefits altogether, asking employees to pay more, or decreasing the amount of money applied to certain benefits.

Hosin explained that health insurance coverage in Jamaica, based on figures as at September 30, 2016 is low, as only 415, 867 employees — 207,302 of them Government employees — have group health insurance. This is approximately a third of the country’s workforce and there are an additional 289,417 persons (128,415 on Government schemes) covered as dependents, Hosin pointed out. “The total number of persons covered is therefore 705,284, which represents approximately a quarter of our population,” he stressed.

http://www.jamaicaobserver.com/news/Insurance-group-firmly-against-GCT-on-health-plans_92149