The draft of the “Law of the Republic of Armenia on Comprehensive Health Insurance”, which was recently circulated on the e-draft platform, is at first glance a long-awaited and necessary project, since it is common worldwide to have comprehensive health insurance, which should free citizens from the huge financial burden conected with health.
However, even after the amendments, the draft still contains problematic provisions, some of which I will discuss below. Employees will pay from 120,000 to 164,400 drams per year for health insurance, the amount of which will be revised every year, including taking into account the projected changes in the consumer price index, which, however, is never done when setting the minimum wage.
According to the Statistical Committee of the Republic of Armenia, in 2023 the poverty rate in the Republic of Armenia is 23.7%. Among the poor there are also working poor who, even having a job, are not able to provide for their minimum needs and those of their family members, since the minimum wage in the Republic of Armenia does not take into account the needs of the worker and his family. In the current socio-economic conditions, when taxes on public transport, garbage collection and property are increasing, health insurance contributions will become an additional burden for workers, which will negatively affect their income, especially for those workers who are already trying to cope with rising prices with minimal income, which does not follow from the requirement of Article 1 of the Constitution of the Republic of Armenia, namely: “The Republic of Armenia is a sovereign, democratic, social and legal state.”
It is necessary to highlight the provision of legislative guarantees for social protection and well-being of people as the most important component of a social and legal state. The problem is that, according to the draft, the burden of paying contributions for compulsory health insurance is primarily imposed on the employee.
The draft law, in particular, mentions "hired workers" (the term "hired worker" is not included in the Labor Code of the Republic of Armenia). The monthly calculation base for insurance premiums is the wages calculated by employers for individuals who are employees, and the annual calculation base is income received for the performance of work (provision of services) under civil law contracts, wages, In fairness, it should be noted that employees will pay: 1) 40% of the insurance premium if the established base for calculating the insurance premium is less than or equal to twice the minimum wage (in the case of receiving a salary of up to 150,000 drams), 2) 60% of the insurance premium if the established base for calculating the insurance premium is less than or equal to four times the minimum wage, but more than two times the minimum wage (in the case of receiving a salary of more than 150,000 drams, but less than 300,000 drams), 3) one hundred percent of the insurance premium if the established base for calculating the insurance premium is more than four times the minimum wage (in the case of receiving wages over 300,000 drams).
This means that each employee, however, will pay between 4,000 and 13,700 drams per month. Employers will not be required to distribute this amount or revise wages accordingly. Meanwhile, employees are exposed to various risks in the workplace that can affect their health. In a number of European countries, including Germany, Austria, France, Belgium and Switzerland, employers also make mandatory payments for employee health insurance.
Employers' participation in this system will help reduce the financial burden on employees and ensure social justice. In parallel with the reasonable and logical implementation of the system, this process should be accompanied by systemic reforms, including the law on wage indexation, as well as adequate and fair distribution of the burden of participation of employers, the state and employees. Otherwise, this is an additional tax for employees.
Elen Manaseryan
President of the Confederation of Trade Unions of Armenia
