Argentina: Separating obra social and private healthcare provision

Employer Action Code: Act

For employees participating in the private "prepaid" healthcare system (sistema prepago) for statutory minimum coverage, Ministry of Health Resolution No. 1/2025 requires that employers now direct the entire compulsory healthcare contribution — 3% of monthly pay (capped at 3,055,220 Argentine pesos as of March 2025) from the employee, plus 6% from the employer — to the contracted private healthcare provider (e.g., empresa de medicina privada – EMP). In addition, the private provider is now required to cover at least the statutory minimum healthcare services for the employee and eligible dependents. Previously, the contribution was directed to one of the healthcare entities (obras sociales), which forwarded a portion of the contribution to the selected private provider, if any, while retaining a portion of the contribution (in part, for administrative costs) as well as responsibility for covering high-cost and complex treatments for the employee and dependents.

Key details

• Since December 2024, employees with private prepaid healthcare coverage have been able to designate via a government website that their entire compulsory healthcare contribution should be paid directly to their contracted private healthcare provider (registered under the new National Registry of Insurance Agents), such as an EMP, rather than to an obra social. In this case, the private provider is responsible for providing at least the minimum level of coverage required by law (Programa Médico Obligatorio – PMO). Note: If the total compulsory contribution amount is not enough to meet the premium for the prepaid medical plan, then the employee or employer (usually the latter) must pay the difference.
• Resolution No. 1/2025 eliminates the step of the employee having to make the designation described above. Instead, for employees participating in the prepaid system, employers must automatically transfer the total healthcare contribution to the contracted private healthcare provider. Current employees who wish to be fully covered by an obra social for statutory healthcare services have until March 31, 2025, to designate via a government website that their compulsory contributions continue to be paid to the obra social. Employees may switch their sole source of statutory healthcare coverage (between different obras sociales and private prepaid providers, where contributions are paid to the provider directly) after one year of membership.

Employer implications

Virtually all companies surveyed by WTW provide healthcare coverage supplemental to the statutory minimum, arranged via a combination of obra social and private prepaid coverage (55% of employer plans) or prepaid coverage only (45%). As obras sociales will no longer receive a share of the compulsory healthcare contributions under the new rules (for employees with prepaid coverage), private providers will receive more funding for each member; however, they will also be required to offer a wider range of benefits (as defined by the PMO), which may lead to premium increases. Employers are advised to assess how the changes affect their employees' healthcare coverage and any supplemental employer healthcare benefit arrangements. Employers should also ensure that contributions are directed to the appropriate provider based on employees' decisions.