New 'Mega-Decree' Reforms Employee Health Benefits

• Published date: 24 March 2024
• Subject Matter: Employment and HR, Food, Drugs, Healthcare, Life Sciences, Health & Safety
• Law Firm: WTW
• Author: Stella Sanyan

Employers in Argentina should look closely at cost increases resulting from sweeping reforms that allow healthcare providers to adjust plans' premiums on their own terms. Previously, they were subject to statutory limits.

Employer Action Code: Act

President Javier Milei's new administration issued a Decree of Necessity and Urgency (DNU) No. 70/2023, introducing sweeping reforms to loosen rules governing the country's economy. Among other changes, the decree amends the legal framework for employee health benefits by enabling healthcare providers to join the regime for compulsory health entities (obras sociales). Employees receive medical care via membership in either a unionized or a non-unionized obra social (for unionized or non-unionized employees, respectively). Health coverage can be supplemented under private medical plans, via private healthcare providers.

Key details

The main healthcare-related changes under the DNU, effective December 29, 2023, include:

• All new employees covered by collective bargaining agreements (CBAs) can change their healthcare provider from the start of employment. Under previous rules (effective July 2021), employees covered by CBAs were assigned to an obra social for their work activity sector and had to wait one year before being allowed to change it; during this time, the compulsory employee and employer healthcare contributions were designated only for their assigned obra social.
• Prepaid Medicine Enterprises (Empresas de Medicina Prepaga - EMPs), which are private health providers offering voluntary prepaid insurance plans, may now join the obras sociales regime. In the event an EMP decides to do so, insured employees may designate that their compulsory employee and employer healthcare contributions are paid directly to the EMP Previously, all healthcare contributions had to go through an obra social first, with the obra social serving as an intermediary between employees and EMPs, providing coverage for high-cost and complex treatments while retaining a portion of the contributions.
• Premium amounts for private medical plans can now be freely established by EMPs and obras sociales. The government can no longer review or invalidate premium increases.
• EMPs that choose to join the obras sociales regime and receive healthcare contributions directly must divert 20% of the compulsory employer...