Health coverage not mandated for employed spouses

Cayman Islands employers – including the government service – are not required by the local Health Insurance Law to provide healthcare coverage to employed spouses of island residents, Health Insurance Commissioner Mervyn Conolly said Saturday.

Mervyn Conolly
Mervyn Conolly

Mr. Conolly’s remarks came in response to questions during a poorly attended presentation at the Small Business Expo, held Saturday at the University College of the Cayman Islands campus. The afternoon presentation was touted as an information session to assist Cayman’s small business owners.

While many island employers do choose to cover spouses of their employees who are also working here, there is no legal requirement for them to do so, the health insurance commissioner said. It is only in cases where the spouse and underage dependents of the working person are unemployed where that coverage is required to be provided under the Health Insurance Law.

The issue is something Mr. Conolly said he is aware that the government, in particular, is now looking into, as it faces an estimated $1.18 billion healthcare liability (measured at present dollar values) during the next 20 years that Finance Minister Marco Archer said risked “overwhelming” the government budget if left unaddressed.

“Obviously, [the government is] looking at everything now,” Mr. Conolly said. “I think you’ve heard of this co-pay thing.”

Currently, the Cayman Islands National Insurance Company covers the spouses and underage children of all of its employees with 100 percent free health insurance. Government workers do not contribute anything to their monthly healthcare premiums.

CINICO insures roughly 3,600 employees, and their dependents, in the Cayman Islands government civil service and hundreds of others who work for statutory authorities and government-owned companies that operate outside of central government. It is estimated that CINICO insures somewhere around 12,000 to 15,000 people in the Cayman Islands.

A number of measures are currently being considered by government to offset rising healthcare costs, including a proposal to raise the government’s retirement age by five years from 60 to 65. Increasing the current retirement age from 60 would mean government workers would pay into the healthcare system longer, putting additional funds toward future liabilities in healthcare.

Minister Archer has also pledged to institute co-payments of healthcare premiums for civil servants with a target date of 2018.

A number of other possibilities include lowering the lifetime coverage maximum for government employees under the CINICO plan from its current $5 million, and instituting a “graduated” coverage scale for retired civil servants based on how many years they worked for the government.

Requiring employed spouses of civil servants to foot the bill for their own healthcare has been discussed previously by Legislative Assembly members, but it has not been listed as a potential cost-saving measure by the administration in any public debates on the subject.

The frightening increase in local health insurance liabilities was laid bare by Minister Archer last month during a Legislative Assembly meeting.

The 20-year estimated liability government carries for future healthcare expenses, measured at today’s value, has ballooned from $654 million in 2004 to $1.18 billion in 2014. “Essential services such as education, national security and healthcare are underfunded because of the healthcare costs and the long-term healthcare liability,” Mr. Archer said at the time.

The government’s overall cost of providing healthcare to its currently insured employees, retirees, seamen and veterans went from $87 million in 2012 to $107 million in the current government budget. Healthcare costs make up about 20 percent of government’s total spending.

The Cayman Islands also has 345 outstanding “loans” to residents who do not maintain healthcare coverage, with unpaid balances of $12.3 million owed to government.