Colombia Forum

fecherklyn
Joined 2015
Posts: 1386

7 years ago

EPS, are you sure you have the correct affiliation?

7 years ago

I think that one of the most difficult aspects of becoming a resident expat in Colombia is getting to know, and even worse, understand the bureaucratic maze you have to navigate. In my case, even now after 14 years in Colombia I am still learning, sometimes painfully. Here is something I have just come across which you may have to take into account……are you PROPERLY affiliated to the Colombian Social Security system (Sistema General de Seguridad Social – SGSS)? This system OBLIGES resident expats in Colombia to subscribe to the compulsory medical health care and pension program and I have just discovered that I am under scrutiny for evasion in the case of the medical health coverage (EPS) and I am fighting against pressure to contribute to a Colombian pension plan (N.B. I am 74 and already retired elsewhere and my overseas pensions are still subject to at source Social Security Medical Health contributions – in France at 3.2% of gross pension).

The medical care program (EPS). I have had an EPS with Sanitas ever since I arrived 14 years ago. No problem, I answered some questions from Sanitas and started to make monthly contributions which are increased for inflation annually and stood at COP 86,200 per month in 2016. That is as much as I understood up until a few days ago. It now appears this monthly contribution was based on the Colombian Minimum Monthly Salary (which was what everybody else I knew did) and apparently this is WRONG in my case because my DECLARED monthly income (from my annual tax declarations) is several times superior to the Minimum Monthly Salary.

This situation has recently been communicated to me by “La Unidad” which appears to be acting on behalf of the Colombian Minhacienda. “Acting” very aggressively it would seem as my letter is entitled “Trabajador independiente con indicios de evasion en el pago de aportes SGSS”. They certainly do their best to make you feel like a criminal and my wife’s telephone enquiry quickly clarified I had been in fault for a number of years, had to rectify my affiliation within a deadline and was already liable for up to COP 52 million in fines. But wait for it, the best is yet to come.

Having decided this was something to be taken seriously I asked my tax counsel for advice. He confirmed La Unidad was sending out an avalanche of similar letters elsewhere and it constituted a measure from the government to try to do something to patch up the financial problems of the SGSS. Apparently, after years of disregarding the notion of linking the level of contributions to the contributor’s ability to pay, they had decided wage a scourge.

My tax counsel did a back of the envelope calculation using my declared level of “worldwide” income and came up with a rectified contribution of……..COP 1,300,000 per month (instead of COP 86,200), yes, you did read that right! Of course, that is “what it should be” he clarified; but most people will simply re-affiliate with a proposed level of income of two, or 3 monthly minimum salaries and hope the Minhacienda will be satisfied with that.

What strikes me as incredible on the part of the Colombian government is that they feel it acceptable to INSIST all residents contribute to a health scheme at a price LARGELY IN EXCESS of how much they may pay for voluntary, supplementary health coverage. In my case, I pay COP 734,000 per month for my local voluntary, complementary scheme, Colsanitas Prepago, whilst they want me to pay nearly twice that amount (COP 1,300,000) for a compulsory “basic” coverage that I will hopefully never use.

Could this affect you? It is for you to decide, but if you are a “resident”, then you are subject to this legislation (Afiliación ante una EPS del Régimen Contributivo, Articulo 179 de la Ley 1607 de 2012).

The Monthly Minimum Salary in Colombia for 2017 is COP 737,717, say US$ 246 @ $/COP 3,000. Thus, if you’re US pension incomes amount to US$ 2,000 per month, this is equal to eight (8) Colombian Monthly Minimum Salaries and the 2016 EPS contribution was COP 86,200 per month based on ONE Monthly minimum salary.

Of course, anything is possible in Colombia, but I would appreciate other forum members’ comments on this situation.

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