Employee Unions Urge Telangana Government to Drop 1.5% Salary Deduction for Health Scheme

Hyderabad: Employees unions urged the state government to reconsider the proposal to deduct 1.5 per cent of an employee's basic pay as contribution towards the Employees Health Care Trust for implementing Employees Health Scheme (EHS) from June for employees and pensioners. The Unions' Joint Action Committee (JAC) said the EHS should be restructured on the lines of the Central Government Health Scheme (CGHS).

Speaking at the Joint Staff Council meeting held here under the chairmanship of Chief Secretary K. Ramakrishna Rao, the employee leaders suggested several reforms to make the proposed health scheme transparent, equitable, financially sustainable and employee-friendly. Representatives of 15 recognised employee associations participated in the meeting.

Telangana Employees JAC chairman and Deputy Collectors’ Association president V. Lachireddy, along with JAC general secretary Vodnala Rajashekhar, welcomed the government’s decision to establish the trust but expressed concern over the proposed 1.5 per cent deduction on basic pay. The JAC leaders pointed out that the system could create disparities.

They noted that a young employee with several eligible family members could pay a relatively low amount and secure coverage for all dependents, whereas a senior employee nearing retirement, with only a spouse remaining as a beneficiary, would be required to pay a much higher contribution because of a higher basic pay. Such a model, they argued, would place a disproportionate financial burden on senior employees.

Instead, they advocated a family-based contribution structure under which employee contributions would be determined by the number of enrolled family members rather than basic pay. A nominal contribution could be charged for each registered dependent, subject to a maximum ceiling. This approach, they said, would directly link contributions to actual beneficiaries, ensure equitable sharing of costs and make the scheme more transparent and sustainable.

The JAC suggested that if contributions are collected for dependent children, health card benefits should continue for them irrespective of age limits, as long as they remain covered under the scheme. “If a premium is collected for a beneficiary, health coverage should also be extended to that beneficiary,” they said.

They stressed that employees should be provided complete information about the scheme, including operational guidelines, empanelled hospitals, available speciality services, approved treatment packages, inpatient and outpatient coverage, and the rights and responsibilities of beneficiaries before obtaining their consent and issuing health cards.

They proposed that both employee and government contributions should be deposited directly into the trust account. Such a mechanism, they said, would ensure faster settlement of hospital bills, enhance confidence among empanelled hospitals, facilitate uninterrupted cashless treatment and improve transparency and accountability in financial management.

The employee representatives also recommended a three-tier contribution system similar to CGHS instead of the proposed percentage-based deduction. Under the proposal, non-gazetted employees would contribute a fixed monthly amount and be eligible for semi-private wards, while gazetted employees would pay a higher fixed contribution and be entitled to private wards. An optional third tier would allow employees to voluntarily opt for higher contribution slabs and enhanced benefits irrespective of their designation.

According to the employee leaders, the suggested reforms would align the scheme with CGHS best practices, strengthen the financial stability of the trust, improve transparency and accountability, safeguard the interests of senior employees, increase confidence among beneficiaries and hospitals, and provide comprehensive health protection to government employees and their families.

They urged the government to take these requests into consideration while finalising the structure of the Employees Health Care Trust and the Employees Health Scheme.

Staff unions oppose 1.5% deduction of basic pay for Employees Health Scheme (EHS).

JAC says young employee with several eligible family members could pay a relatively low amount; senior employee nearing retirement, with only a spouse as beneficiary, would pay larger contribution because of a higher basic pay.

JAC seeks family-based contribution structure; contribution to be determined by the number of enrolled family members.

If contributions are collected for dependent children, benefits should continue irrespective of age limits.

Staff and government contributions to be deposited directly into the Employees Health Care Trust account for faster settlement of hospital bills, enhance confidence among empanelled hospitals.

A three-tier contribution system similar to CGHS instead of the proposed percentage-based deduction proposed.

Non-gazetted employees to contribute fixed monthly amount, be eligible for semi-private wards.

Gazetted employees to pay a higher fixed contribution and be entitled to private wards.

Optional third tier for employees whio voluntarily opt for higher contribution slabs.