COSATU PUBLIC SERVICE UNIONS REJECTS THE UNJUSTIFIED GOVERNMENT
EMPLOYEES MEDICAL SCHEME INCREASE AND CALLS FOR A NATIONAL DAY OF
ACTION.
The public service unions affiliated to COSATU and represented in the Public Service
Coordinating Bargaining Council — DENOSA, NEHAWU, SADTU, POPCRU, SAMATU,
PAWUSA and SAEPU — unequivocally rejects the decision by the Government
Employees Medical Scheme (GEMS) to impose a 9.8%-member contribution increase for
2026, following an already devastating 13.4% increase in 2025.
While we have called the gathering to inform our members, the contributors of GEMS,
their beneficiaries, and all relevant stakeholders about our provincial protest actions and
ultimately our nation picket at GEMS offices. The matters related to GEMS are not only
limited to our rejection of GEM’s imposition of exorbitant increases on contributions
without any corresponding improvements regarding the benefits.
The national picket on the Thursday 26 February, will be phase one of our rolling mass
action in line with our multi pronged approach as adopted in our action plan. We have
endorsed a three-month action plan, which will include activating the legal strategy and
massive action at different workplaces from which a final national march will be rolled
out should we not find joy with GEMS.
We will be evoking the legal strategy to fight the scheme on a number of areas.
We are going to embark on a three-month programme of action challenging the increases
and governance failures in GEMS.
From January 2026, members are paying 9.8% more, this constitutes a staggering 23.3%
increase over two years noting the 13.4% last year. This is an assault on public servants
already battling a severe cost-of-living crisis.
This is taking place while:
• Public servants received only 5.5% salary adjustment in 2025/26
• Will receive 4% in 2026/27
• Inflation sits at approximately 3.5%
• Government subsidy increases are limited to 4.5%
Medical aid costs are rising far above wages and inflation. This is real wage erosion and
a direct attack on workers’ take-home pay. GEMS was created through PSCBC
Resolution 1 of 2006 to provide affordable, solidarity-based healthcare, especially for
lower- and middle-income public servants. It was never intended to operate like a profit driven commercial scheme. GEMS has unfortunately abandoned this mandate.
The Council for Medical Schemes recommended an increase of 3.3% for 2026. GEMS
ignored this guidance and imposed an increase 6.5 percentage points higher,
demonstrating a disturbing disregard for workers.
Managing the monopoly of GEMS
We will be activating a process to open for freedom of choice for public servants who
wish to belong to other medical aid schemes to do so with full subsidy. This will happen
immediately in the event that GEMS shows some resistance to our demands. We
understand that we are part of the resolution that founded GEMS and to that effect we
will be legally interrogating possibilities to amend such and or to fully withdraw from the
agreement without inviting any negative implications to our members.
GEMS was formed not to conform to the prevailing conduct of other medical aid schemes
but was endorsed as a special vehicle to disrupt the existing environment and cater for
an affordable option as opposed to a profit driven initiative. The thinking was to collate a
collective buying power of public servants to ensure better negotiations with the service
providers.
While we engage in the revisiting the PSCBC Resolution 1 of 2006, clause 5.6 that is giving
GEMS monopoly in the public service. The engagement will be through either a review
and bring an alternative to GEMS, we will guard against any harm that will be transferred
to our members. The legal team will investigate all possibilities for either an effective
alternative or a drastic shape-up of GEMS.
Exemption to 25% reserves.
Our legal team will be filing an urgent application for exemption to the required twenty
five percent reserves as it is a close scheme and the guarantor remains government.
Upon the signing of the founding agreement at the PSCBC, GEMS was processed through
an act of parliament and therefore has full backing as a government entity.
Our understanding is that GEMS is a special close scheme and should not be treated as
an ordinary scheme to be subjected to the prevailing environment. Such application will
seek to also strengthen the governance and efficiencies in management so as to avoid
abuse and collapse of the scheme.
Composition of the board.
In its founding architecture of Government Employee Medical Scheme as a negotiated
product of the Public Service Coordinating Bargaining Council (PSCBC) was to ensure
that the ownership and control of the scheme rests within its founding mandate. The
control of the board was for both the employer, who have 50% vote in the PSCBC together
with the workers’ representatives who collectively have 50% vote in the PSCBC to jointly
be responsible for the governance of the scheme. So far only 50% of board members are
directly appointed by the minister of DPSA representing the employer, while the other
composition of governance is open to a vote which mostly does not guarantee the
collective representation of the founding mandating of GEMS.
Our posture has always been to redirect the governance of GEMS to its founding
mandate, where labour collectively will appoint board members in the same light with
the employer. GEMS is a product of collective bargaining between the two active parties
at the PSCBC – being the employer and public service workers. Therefore, it must also be
reflected in its board or Accounting Authority as a structure that has to be directly
representative, reporting and receiving mandates from the constituencies. We will be
challenging the matter to among others have control over governance.
Governance in GEMS
We want to hold the board and management of GEMS accountable for its financial
mismanagement. The conduct of board members and that of the Principal Officer (PO)
and management seem not to consider and protect the interests of owners of GEMS. We
believe that the Accounting Authority is failing in its fiduciary duties by allowing the
exorbitant increases way above what even the Council of Medical Aids Schemes (CMS)
would have recommended.
For a number of financial years now in terms of the recent annual reports of the CMS it
has been exposed that the GEMS board and its committees hold by far more meetings
than any boards of other medical aid schemes, albeit it is an umbrella medical aid
scheme; yet there is no concrete reflection of the benefits of such numerous meeting.
The sitting of more than fifty meetings in a year where each board member claim a full
sitting board fee even in the face of poor performance of the scheme is a scandal that
require investigation.
Financial mismanagement
While the concentration of financial mismanagement is aimed at members abuse as
alluded by the utterances of the Principal Officer, GEMS board has failed to monitor and
bring to book any abuses within the scheme. It is wrong that the scheme is using a lot of
money fighting its own members instead of instituting cost cutting measures.
Furthermore, the attention of this mismanagement is not focusing on parties contracted
to manage the scheme. A huge share of financial gain goes to Metropolitan and
Medscheme: the two companies entrusted to manage the scheme. We have always raised the matter that in its founding principles, GEMS was not supposed to be
outsourcing administration to third parties but rather to build internal capacity for such.
Medical Aid Schemes are not for-profit in terms of the Medical Aids Schemes Act. In this
regard, this legislation did not anticipate that the schemes would contract out their
administration, which is the fundamental reason for their existence, to the external forprofit
enterprises. These administrators are encouraged to limit the coverage of benefits as much as possible whilst increasing co-payments by members and this defeats the whole fundamental objective of making the schemes not for-profit when the administrator is driven by profit in which they benefit from declining coverage of benefits. This becomes even more of a profiteering exercise when the contracted for-profit administrator operates in an uncompetitive environment of more than 800 000 principal members.
Unwarranted marketing budget.
GEMS is determined as a monopoly scheme and somehow has an advantage on public
servants joining it due to the agreed subsidy from government. So we fail to understand
why GEMS would have a huge marketing budget that include using mainstream media to
advertise while it is certainly guaranteed members who are employed under the Public
Service Act. This is irrational and evidently fruitless expenditure in the interest of the
marketing companies and this too must be investigated in terms of the cost and benefit
analysis. Workers are now being forced to pay for governance failures they did not create.
Tanzenite Beneficiaries
We have now noted with concerns the decision by GEMS directing tanzanite beneficiaries not to use private hospitals but to go to public hospitals. The question then becomes why these beneficiaries must pay for medical aid (GEMS) if they must utilise public hospitals. They are paying for same services that they will get at a very low cost in public hospitals or public health centres.
Our Central Demands:
• Immediate withdrawal of the 9.8% increases
• A full forensic audit into governance, finances and procurement
• Review of outsourcing contracts and administrative costs
• Alignment of executive remuneration with public-service norms
• Implementation of labour’s anti-fraud proposals
• Redesign of benefits to protect lower-income members
• Genuine engagement within the PSCBC
• Accountability, including the removal of implicated executives
Legal and Structural Intervention:
We have endorsed a three-month programme of action, including:
• Immediate legal action challenging the increases and governance failures
• Pursuit of exemption from the rigid 25% reserve requirement, recognising GEMS
as a state-backed closed scheme
• Institute legal action against exclusionary measures of tanzanite beneficiaries
• A review of outsourcing arrangements and cost drivers
• Intervention to realign governance with the original PSCBC mandate
• Exploration of amendments to Resolution 1 of 2006 to allow freedom of medical
scheme choice with full subsidy protection for public servants
Programme of Mass Action:
We are going to embark on Provincial pickets on 24 February 2026 at GEMS regional
offices. These will be followed by a National Day of Action on Thursday, 26 February 2026
at GEMS Head Office, Pretoria. These demonstrations mark the end of Phase One, to be
followed by intensified workplace mobilisation and, if necessary, a national march.
In conclusion:
Public servants are not asking for luxury. They are demanding fairness, transparency, and
a medical scheme that serves its founding purpose — to protect workers, not burden
them. GEMS exists because of workers. It must therefore serve workers.