Cyprus: Implementation of New General Health System Places Obligations on Employers

Cyprus passed the General Health System (GHS) law (No. 89(I)/2001) in 2001, but implementation legislation has only recently been introduced and the bulk of the new regime will come into effect in 2019.

It wasn’t until 2018 that a set of regulations to implement the 2001 law was introduced, allowing, inter alia, patients to choose their own health care providers for the provision of comprehensive health care services at a nominal cost. The intention is for the main costs to be covered by a special government fund, for which statutory contributions will be withheld from salaries on a monthly basis, in a similar manner to social insurance contributions.

The GHS law will be implemented in two phases. The first phase concerns out-of-hospital healthcare, such as services provided by personal and specialist doctors, pharmacists, and laboratories; it will be implemented on June 1, 2019. The second phase will be implemented on June 1, 2020, and concerns all other health care services, including in-patient health care and services from other healthcare professionals such as clinical nutritionists, physiotherapists, nurses and midwives, etc. Employees, employers, self-employed individuals, government officials, as well as pensioners are obligated to make GHS contributions based on their incomes. For the private and public sectors, contributions on gross monthly salaries will commence on March 1, 2019, at 1.70 percent for employees and 1.85 percent for employers (deductible at source), and will respectively increase to 2.65 percent and 2.90percent as of March 1, 2020.

Service providers have been invited to express comments on their participation in the GHS. Although in principle all sides agree on the need to have such a system, there are conflicting views on its intended application, and the private medical sector has expressed significant skepticism and criticism. Negotiations failed to reach consensus on essential demands; as a result, the Pancyprian Medical Association and a number of other specialist doctors’ associations have rejected the GHS and called on their members not to participate, claiming that it will have the opposite effect to what is intended. On the other side, the government repeatedly expressed its determination to proceed with the implementation of the GHS as is, backed by the Pancyprian Federation of Patients, which considers that it will meet the needs and expectations of citizens, reduce long waiting lists, and strengthen the public health sector.

Comment

Many believe that reform of the public health sector in Cyprus is long overdue, but that a reliable and efficient general health system, accessible to all parts of society on equal terms, must be above political and economic motivations. To serve its purpose, the GHS law requires the approval and participation of the vast majority of private sector health care providers. With very little interest expressed by that sector so far, the government has work to do to ensure the GHS survives and flourishes as intended.

Written by Nicholas Ktenas and Natalia Hadjipapa of Elias Neocleous & Co. LLC and Roger James of Ogletree Deakins

© 2019 Elias Neocleous & Co. LLC and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.