The Government Employees Medical Scheme (Gems) has launched a last-ditch effort to fend off further protest action from unions over its contribution increases, offering bilateral talks to defuse rising tension.
Trade union federation Cosatu, the Federation of Unions of South Africa (Fedusa) and the Public Servants Association (PSA) maintain that despite state subsidies, the scheme’s recent premium hikes are unaffordable because they are more than double the pay increases awarded to civil servants.
Gems is South Africa’s biggest restricted medical scheme, with almost 2.45-million 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.
Gems imposed a weighted average premium increase of 9.8% in January, 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 are also calling for 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 compelled 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.
A scheme’s solvency ratio, a key measure of its financial health, is a measurement of its accumulated funds to its annual contribution income.
Gems sought to balance long-term financial sustainability with affordability, Gqola said in an interview with Business Day. The scheme’s solvency ratio was just shy of 25% at end-December, she said, declining to provide more recent figures as they have yet to be audited.
In response to unions’ concerns, she defended the scheme’s expenditure on executive and trustee remuneration, saying it is in line with industry norms.
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 spends so much money on marketing initiatives such as billboard and television advertisements when it has a captive market, said Molatlhegi.
Gqola said the marketing and sponsorship of events such as the Comrades Marathon are necessary to attract new members.
She emphasised that the scheme has a long track record of sound financial management and has received 18 successive unqualified audits since it began operating in 2006. “External auditors have confirmed that the financial statements are a fair reflection of the scheme’s activities, with no material financial errors, fraud or corruption identified,” she said.
PSA GM Rueben Malaka said the union is seeking legal advice on whether it can 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.
“It’s not serving its purpose, but serving the principal officer and executives,” he said.
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