Thu | Jan 18, 2018

Insurers should stop whining

Published:Tuesday | March 28, 2017 | 12:00 AM


When it comes to health and tax, I, like every human, shudder in fear, but if you put emotions aside, you'll get the bigger picture.

So the first person who came out swinging against the Government's planned application of general consumption tax on group health insurance premiums was the former chairman of the Economic Programme Oversight Committee and the current CEO of Sagicor Group.

Let's look at their flagship programme of Sagicor Life. The company reported profit in 2014 of $6.3 billion, $8.2 billion in 2015, and $8 billion in 2016.

On Sunday, March 12, I saw a Jamaica Observer story in which CEO of Guardian Life and president of Insurance Association of Jamaica, Eric Hosin, discussed how this tax will be passed on to customers and offering concern that employers will drop insurance from their budgets.

Guardian Life's profit for 2014 and 2015 I haven't found 2016 numbers yet are $2.2 billion and $4.8 billion, respectively.

So let's add up both companies' profit for 2015 you'll get $13 billion. The Government just wants $1.88 billion out of that.

Hosin went on to explain that health insurance coverage in Jamaica, based on figures as at September 30, 2016, is low, as only 415,867 employees - 207,302 of them government employees - have group health insurance.

This is approximately a third of the country's workforce and there are an additional 289,417 people (128,415 on government schemes) covered as dependents.

So here are my questions: How many of us really benefit from the insurance we are paying? How many of the employers and employees benefit when insurance companies boast all that profit about annually?

I'm all for businesses making profit, but they must pay their fair share too.

Health insurance is a service, and such services qualify for taxation.