The fourth child for free: The health funds' benefit reaches the court
The Tel Aviv Regional Labor Court has approved a class action lawsuit against Israel's four health funds. The plaintiffs argue that the exemption from supplementary health insurance (SHABAN) premiums for large families violates the principle of equality.
The Tel Aviv Regional Labor Court approved a class action lawsuit last week against the four health funds — Clalit, Maccabi, Meuhedet, and Leumit — claiming that the exemption from insurance premium payments in the supplementary health insurance (SHABAN) programs, granted starting from the fourth child in a family, contradicts the National Health Insurance Law.
The request was filed in May 2024 by four mothers with three children or fewer. The core of the complaint is a violation of the principle of equality: two members in the same fund, of the same age and in the same program, pay different amounts solely based on the number of siblings born before them.
It is important to clarify: the court did not determine that the arrangement is illegal, but that there is a reasonable chance it will be so determined. In the same breath, it almost ruled out compensation for the past, noting the funds' reliance on the regulator's approval over the years. However, the prospect of canceling the arrangement for the future remains a significant concern for the funds.
As of now, no operative order has been issued, and the exemption continues to be granted in all four funds. The Ministry of Health has announced the establishment of a team to examine the issue, but without a set timetable, suggesting a reluctance to handle this "hot potato."
The economic rationale behind the benefit lies in the capitation formula. Each new member registered with a fund increases the budget it receives from the state, while the additional costs for a healthy child are much lower. Therefore, the SHABAN exemption serves as a marketing tool to attract large families into the basic health basket.
According to 2020 Central Bureau of Statistics data, the fertility rate among Haredi women was 6.64, making them the primary beneficiaries of the policy. The court emphasized that such rules, affecting millions of insured individuals, should be established through legislation rather than internal health fund documents, the legal status of which remains questionable.
