Benin: Introduction of mandatory employer health insurance in 2022

Employer Action Code: Act

Law 37 of 2020 introduced a variety of changes relating to how healthcare will be organized and provided. Among other things, it includes a mandate for all residents to have health insurance; in the case of both private and public sector workers, employers must provide the coverage. The mandate takes effect January 1, 2022. The law additionally reforms the general organization of health services, the latest in a series of steps the government has taken in recent years to gradually replace the existing system (Régime d’Assurance Maladie Universelle – RAMU) with a universal healthcare system under the Human Capital Reinforcement Insurance project ( L'Assurance pour le Renforcement du Capital Humain – ARCH). First announced in 2016, piloting of ARCH’s mandatory health insurance provisions began in 2019 among the poor in select locations in Benin. ARCH’s provisions are expected to be fully operational by 2030.

Key details

From an employer perspective, the main changes and requirements introduced by Law 37 of 2020 include:

• All residents will be required to be covered by health insurance (assurance maladie obligatoire – AMO). For private and public sector workers, employers will be required to provide and pay for coverage. The self-employed will likewise have to arrange their own coverage. Some segments of the population, such as the poor, will be entitled to state-provided coverage.
• AMO insurance will be subject to a minimum level of coverage (panier de soins de base), which will be established by the Council of Ministers. During the pilot phase of government-provided insurance for the poor, covered care included general consultations and treatment for 22 types of illnesses as well as related diagnostics, imaging and medication.

Employer implications

The World Health Organization estimates that total spending on healthcare equaled only 2.5% of GDP as of 2018. Of that, out-of-pocket (OOP) healthcare spending accounted for nearly half. Voluntary health insurance accounted for only 5.5% of all healthcare spending. The successful development of a universal health insurance mandate should eventually result in much higher spending on private health insurance (PHI) and lower OOP spending, but it’s not expected to have a significant impact on the PHI market in the short term.

While certain aspects of what companies will need to do under the new insurance mandate remain to be clarified (such as the minimum level of coverage), employers should already coordinate with their insurance provider and monitor further developments in order to remain compliant.