Q1. When did the Medical Schemes Act come into operation?
The Medical Schemes Act, No. 131 of 1998 (the Act) came into operation on 1 February 1999. The Regulations in terms of the Act were introduced by Government Gazette No 20556 dated 20 October 1999, and came into effect on 1 November 1999.On 1 January 2000 the Council for Medical Schemes (CMS) came into operation.
Q2. How may a member ascertain his rights and obligations with regards to benefits, contributions and limitations?
Section 30(2) of the Act provides an obligation on medical schemes to provide a detailed summary of the rules which specifies a member’s rights and obligations to every member who joins the scheme, free of charge.The acceptance letter provided to a member when he/she joins will indicate information such as the contribution and any limitations that were placed on the benefits. In addition to the summary members are also entitled to a complete copy of the rules, financial statements, and annual reports upon request and on payment of a fee as may be determined in the rules of the scheme, if applicable.
Selection of Schemes and Benefit Plans/Options
Q3. Must a prospective member apply for membership of a medical scheme through a broker?
No, there is no such provision in the Act. One can apply directly to the scheme or opt to use the services of a broker (intermediary).
Q4. How do I as an individual select an appropriate medical scheme?
- Ensure that the scheme is duly registered in terms of the Medical Schemes Act 131 of 1998. Only entities that are registered by the CMS can do the business of a medical scheme.The names, addresses and telephone numbers of all registered schemes are published on the website of the Council for Medical Schemes. The address is: Accredited Medical Scheme Administrators
- The list is also published annually in the Government Gazette for general information. The office of the Registrar also provides information on registered schemes.
- Information about benefits, contributions, limitations and exclusions must be requested from your medical schemes.
- If you do employ the services of an agent, broker (intermediary), ensure that he/she has been accredited by the Council for Medical Schemes and that your selection of scheme is based on informed consent. To ascertain whether a broker has been accredited prospective members should insist that brokers produce proof of accreditation with Council and/or verify the broker accreditation status on the Accredited Brokers Portal.
- Request the latest financial statements and annual report of the scheme to familiarise yourself of their financial position. These reports are available in the Council’s Annual Report. Click here to view these Annual Reports.
Q5. How do I know which benefit option to select?
Ensure that you understand how the benefit options operate and select according to your healthcare needs and what you can afford. The Prescribed Minimum Benefits (PMBs) must be included in every benefit option. The registered rules of medical schemes fully disclose detailed information regarding the relevant benefits and contributions. It is essential that you obtain the rules of the scheme or a summary thereof to verify all information relevant to enable you to make an informed choice.
Membership, Contributions, and Benefits
Q6. Is membership of a medical scheme available to any person?
Yes the open enrolment principle means that any person can join any medical scheme or their choice.The only exception is restricted medical schemes where you can only join if you meet the eligibility criteria.Eligibility criteria must be based on the grounds provided in the Act and which includes employment or membership of a particular employer, profession, trade, industry, calling, association or union has established a scheme exclusively for its employees or members.
Q7. Can I belong to more than one medical scheme at the same time?
No. It is illegal. Section 28(a) of the Medical Schemes Act prohibits this. Members must ensure that their membership on a former medical scheme is duly cancelled before undertaking membership with a new medical scheme.Ensure that your last date of membership with the one scheme is not after the effective join date with your new medical scheme.
Q8. Can a minor become a member?
Yes, with the assistance of his/her parents or legal guardian, provided that the relevant contributions are paid by him/her or on his/her behalf.Such a minor will be registered as a principal member and not as a child dependent.
Q9. May a medical scheme refuse to admit my dependant?
No. A medical scheme may not refuse admission of a member’s dependant if such dependant meets the eligibility criteria stated in the registered rules of the relevant scheme.
In terms of the Act a dependant is:
- The member’s spouse or life partner;
- Dependent children;
- Other members of the member’s immediate family for whom the member is liable for family care and support; or
- Any other person who is allowed as a dependant under the rules of a medical scheme.
The following information is relevant regarding dependants:
- In terms of the Regulations a child under the age of 21 is defined as a child dependant. A child above 21 is subsequently referred to as an adult dependant.
- People who are physically and mentally disabled can only be registered as child dependants if it is allowed in the rules of the particular scheme. If it is not they can be registered as adult dependants.
- A third generation dependant is the grandchild of the principal member. The majority of medical schemes only allow these dependants to be added to the scheme if the grandparents have legally adopted the child or where a court of law has awarded guardianship to them.In the absence of these legal documents such a child can be registered as a principal member (see Q.8)
- Immediate family refers to those family members who are once removed from the principal member.For example if you are married your wife is your immediate family but if you are not your parents will be your immediate family.
Q10. If a member dies, will his registered dependants still be covered?
Yes, without any break in membership and provided contributions are paid. It is important to inform the scheme if one chooses not to continue.Such members are referred to as continuation members and one of the dependants (usually the surviving spouse) will become the principal member.In the instance that the deceased member belonged to a restricted medical scheme no additional dependants will be allowed on the medical scheme as the link between the scheme and the person who met the eligibility criteria has been broken.For example if the principal member dies and his wife becomes the main member she cannot add her new husband as a dependant and they will have to join an open medical scheme.
Q11 (a) Must I give notice to scheme in the event that I wish to terminate membership?
Yes, if the rules of the scheme provide for such, the notice period stipulated in the rules must be complied with.Contributions must still be paid until the last effective date of membership.
Q11 (b). Am I entitled to benefits while serving notice of termination?
Yes, until the last day of membership provided contributions are being paid.
Q11(c) Am I still liable for contributions if request immediate termination or don’t give notice at all?
Yes. A member remains liable for full contributions for the whole notice period regardless of whether they serve the termination notice or not. A medical scheme may institute legal proceedings to recover outstanding contributions or backdate the termination to the last date of contributions received. This may result in reversal of claims already paid by the scheme during the notice period.If the member had a savings account the debt may be offset before the balance is transferred to the new medical scheme or paid out to the member if he/she does not join a new benefit option with a savings account.
Q12. Must my employer subsidize my contributions to the medical scheme?
Subsidies are conditions of employment and the Act does not provide for such conditions. Neither the Registrar nor the Scheme can intervene in matters relating to medical scheme subsidies and such issues must be taken up with the employer directly
Q13. Can my employer determine which medical scheme can I belong to?
An applicant is free to join any medical scheme of his or her choice. However, some employers may determine in the conditions of employment that its employees must belong to a specific medical schemes.The role of the employer is then limited to the collection and payment of contributions to the medical scheme.If a member is unhappy with the choice of medical scheme selected by the employer the matter must be addressed with the employer or in terms of the Labour Relations Act.
Q14. Is my scheme entitled to cancel my membership when the employer fails to pay the membership fees?
Yes, with the assistance of his/her parents or legal guardian, provided that the relevant contributions are paid by him/her or on his/her behalf.Such a minor will be registered as a principal member and not as a child dependent.
Q15. Can my scheme terminate my membership of the scheme in the case of 1. Retrenchment, 2. Redundancy or 3. Retirement?
All three categories mentioned above concerns employment.If you are on an open medical scheme your membership may not be terminated based on any of the scenarios provided that your contributions are paid timeously.
As far as restricted schemes are concerned you have to meet the eligibility criteria.If the eligibility criteria is concerned with your employment you may only belong to that restricted scheme for as long as you are employed in the specific industry, trade, profession or calling or by a specific employer.If you are retrenched you no longer have a link to the restricted scheme and you may no longer belong to that scheme.You will have to join another open medical scheme of your choice.However if you retire you may stay on the restricted scheme as a continuation member.
Q16. May pensioners' contributions be less than that of other members?
No, contributions to a medical scheme may only be based upon a member’s income, or his number of dependants, or both income and number of dependants.
Q17. May medical schemes determine the contributions of pensioners on their income immediately prior to retirement as a subsequent deemed income or salary?
Yes, unless proof of a reduced income is submitted to the Scheme.The onus is on the member to submit the requested proof to the scheme.
Q18. May a medical scheme determine contributions on the basis of individual high claims or provide for discounted or preferred rates in respect of a particular group of members/clients for whatever reason?
No, unless exemption has been granted to the scheme for an efficiency discounted option, contributions may only be based on a member’s income and/or the number of his dependants or both. The principle of community rating means that everybody pays the same to belong to a medical scheme.The Act prohibits a medical scheme from paying any discount or bonuses whatsoever.
The contributions apply universally to all members who are enrolled and their dependants.
Q19. What is an efficiency discounted option (EDO)?
This is an option with the exact same benefits as its main option; however with reduced contributions due to restrictions placed on members to only use certain healthcare providers or provider groups.Medical schemes have to apply and be granted exemption to have such options registered.
Q20. What is a co - payment?
It is a portion of the cost for which you are responsible, usually to offset some of the cost of care that are not covered by a medical scheme.A co-payment is an out of pocket payment for which you are responsible.Depending on the rules of the medical scheme it will either be a pre-determined sum that you have to pay for a specific procedure or it can be the difference between what the provider charges and what the scheme rate is.A penalty co-payment is sometimes also charged where members voluntarily use a non-designated service provider (DSP) or opts to use medicine(s) which is not on the formulary list.The co-payment is used to encourage members to use DSPs and formulary drugs.Other applicable penalties will be when you fail to obtain pre-authorisation before certain health interventions.Such penalties must be included in the rules of the scheme.
Q21. If I do not claim from my medical scheme, may I receive a no-claim bonus or rebate?
No, the Act prohibits the payment of dividends, bonuses, rebates or re-funding of any portion of contributions.Benefits may also not be carried over to the next financial year.Savings accounts on the other hand are carried over to the next year and paid out to members when they leave the medical scheme and join another scheme without a savings option.
Q22. On what basis may contributions vary?
a. Only in respect of the cover provided. Different benefit options/plans are priced differently depending on the level of cover.
b. If the rules of the scheme so provide, children may be charged a reduced contribution.
c. As previously mentioned contributions may only vary based on the number of dependants and the income band of the principal member.
Q23. May my medical scheme call upon me for increased contributions with retrospective effect?
No, in terms of the Act a medical scheme must give members advance written notice of any change in contributions and benefits or any other condition affecting their membership.
Q24. May a medical scheme request pre-authorisation or second opinions in respect of certain benefits?
Yes, except in an emergency where pre-authorisation should be obtained as stipulated in the rules.In instances where the admission formed part of an emergency the member must request authorisation from the scheme within the timeframes provided in the rules of that scheme.If a medical scheme requires a member to obtain a second opinion, the scheme is liable to fund that report.
Q25. What can I do if I am not satisfied with my current benefit option?
Instead of changing schemes and be faced with waiting periods, a member can either upgrade to a higher benefit option in order to get more comprehensive benefits, or downgrade to a lower benefit option, for less contributions. In terms of the Regulations a medical scheme may determine in its rules that a member may only change his or her benefit option at the beginning of January each year (by giving 3 months written notice before the change is made). Check your respective scheme if a change in benefit option is allowed anytime during the year and on what circumstances.
Minimum Benefits, Waiting Periods and Late Joiner Penalty
Q26. What are prescribed minimum benefits (PMBs)?
The benefits in respect of relevant health services prescribed by the regulations under the Act,
PMBs are defined in Regulation 7 and include the diagnosis, treatment and care costs of:
- any medical emergency;
- The diagnosis and treatment pairs (DTPs) listed in Annexure A; and
- The chronic conditions defined in the Chronic Disease List (CDL).
Q27. What is a designated service provider (DSP?)
A healthcare provider or group of providers selected by the scheme as the preferred provider or providers to provide healthcare services to its members in terms of the diagnosis, treatment and care, in respect of one or more prescribed minimum benefit conditions.
Q28. To what extent are the funding of prescribed minimum benefits restricted?
The diagnosis, treatment and care of a PMB must be funded in full, i.e. at the invoiced amount.The funding may only be restricted under the following circumstances:
a) Where a member voluntarily uses a non-designated service provider or an out of formulary drug the scheme may impose a co-payment.
b) Where the medical scheme has employed interventions aimed at improving the efficiency and effectiveness of healthcare provision by using techniques such as the requirements for pre-authorisation or the application of treatment protocols, the scheme may impose penalties as indicated in the scheme rules.
c) Where a member had a break in coverage of more than 90 days or where a member has never belonged to a medical scheme in the past the scheme may impose waiting periods which includes PMBs (this means that benefits are excluded for the duration of the waiting period).
Q29. What constitutes the involuntary obtaining of services in respect of the PMBs from non - DSPs?
Involuntary obtained means that:
a. The service was not available from the designated service provider (DSP) or would not be provided without unreasonable delay;
b. Immediate medical or surgical treatment for prescribed minimum benefit (PMB) condition was required under circumstances or at locations which reasonably precluded the beneficiary from obtaining such treatment from a DSP; or
c. There was no DSP within reasonable proximity to the beneficiary’s ordinary place of business or personal residence.
Q30. What are the types of waiting periods?
There are two kinds of waiting periods i.e.:
- General waiting period of up to three months.
- Condition-specific waiting period of up to 12 months.
Q31. What does a waiting period mean?
A period during which contributions are payable without the member being entitled to benefits.
Q32. When do waiting periods not apply?
Waiting periods do not apply in respect of:
a. Prescribed minimum benefits, unless the member has never belonged to a medical scheme before or had a break in coverage of more than 90 days (see Q28)
b. A child dependant born during the period of membership
c. A member moving between benefit options unless he/she has to complete the remaining period of previously imposed waiting periods.
d. An individual member who has to involuntarily transfer to another scheme due to a change of employment that causes that member to no longer meet the eligibility criteria of a restricted scheme; an employer changing the medical scheme of his/her employees from the beginning of the financial year.
Q33. How can I prove to a new scheme that I was a member of another scheme?
By producing a membership certificate, which must be provided by the previous medical scheme within 30 days of termination of membership or at any time at the request of a former member or a dependant of a member.The membership certificate must state the period of cover and other prescribed information. The applicant is also entitled to produce a sworn affidavit in those instances where reasonable efforts to obtain a membership certificate for previous membership, were unsuccessful.
Q34. What is a late joiner penalty?
It is a “fine” by way of additional contributions, imposed on persons joining a medical scheme when they are 35 years of age or older and was not a member of one or more medical schemes before 01 April 2001, without a break in membership exceeding three consecutive months since 01 April 2001.
Penalties may be imposed on the late joiner according to a prescribed formula in the Regulations that determines a maximum penalty according to the applicant’s penalty band.The formula takes pervious creditable coverage with other medical schemes into consideration.
Late joiner penalties are imposed indefinitely and do not expire after a certain period and the purpose is to place the late joiner and the other members who have been contributing towards a medical scheme from a young age on the same level as they receive the same benefits.
Q35. What is a late joiner?
A late joiner is an applicant who is 35 years or older when joining the scheme for the first time or an applicant who has had a break in coverage of more than 3 consecutive months from 1 April 2001 at the time of applying for membership.
Q36. What restrictions may a medical scheme impose on an applicant?
- Late joiner penalty
- Waiting periods
Q37. Can a medical scheme impose a condition-specific waiting period on pregnancy?
The scheme may place a condition specific waiting period on any pre-existing condition, including pregnancy, if the applicant has belonged to a previous medical scheme(s) for a period up to 24 months. If the member has belonged to a previous medical scheme(s) for a period longer than 24 months only a 3 months general waiting period may be imposed.Childbirth is a PMB condition and this health event may not be subject to the waiting periods mentioned above.
Complaints against Schemes
Q38a. Where do I go to lodge a complaint if claims are not paid timeously?
Any complaint must first be lodged with the scheme concerned. Written complaints would certainly be preferable, but all schemes should also have dedicated telephone lines to handle everyday complaints and enquiries. All schemes are also required to have mechanisms in place to deal with members’ disputes. If a medical scheme has a disputes committee in place, members and or their legal representatives may be present at disputes committee meetings to present their arguments. Legal representation is not compulsory.
Q38b. Where do I lodge a complaint if I am dissatisfied with a decision taken by the Scheme?
Should all efforts fail to resolve an issue with your scheme, you can submit your complaint to the Council for Medical Schemes Complaints Unit by either posting, faxing, emailing or click to submit online.
Q39. Is a Disputes committee entitled to require the aggrieved member to pay any fees in relation to the dispute?
No, there is no such provision.
Q40. What remedies are available if I am not satisfied with the outcome of Q39?
If you are not satisfied with the outcome of your complaint with the scheme directly, you may escalate your complaint to the CMS where the Registrar will deal with the complaint in terms of section 47 of the Act.
Q41. What recourse do I have if I am not satisfied with the decision of the Registrar?
If you are not satisfied with the decision of the Registrar you may lodge an appeal in terms of section 48 of the Act to the Appeals Committee of Council.
Q42. How does one present such an appeal to Council?
In the form of an affidavit directed to the Appeals Committee and furnished to the Registrar of Medical Schemes not later than three months after the decision concerned was made by the disputes committee.You can send the appeal to the person from whom you received the ruling so that the relevant official can prepare the bundle and send it to the secretary of the Appeals Committee. The secretary will inform the parties of the date and time of the hearing.
The operation of any decisions which is the subject of an appeal shall be suspended pending the decision of the Council.
Q43. Is the Council entitled to award costs when an appeal is considered?
No, there is no such provision.
Q44. Is there a further remedy if I am not satisfied with the ruling of the Appeals Committee?
Yes an aggrieved party may lodge an appeal to the Appeal Board in terms of section 50.There is no prescribed format but the appellant must pay a prescribed fee of R2800 which may be refunded at the discretion of the board if the appeal was successful.
The appeal must be lodged with the secretary of the Appeal Board within 60 days of receiving the ruling that forms the subject of the appeal.
The operation of an Appeals Committee ruling is not suspended pending the section 50 appeal.
Q45. What is mediation and where does it fit in?
Mediation is a process introduced by the CMS whereby certain matters are referred to a panel of independent mediators to try and resolve or narrow down the issues in dispute.If the matter cannot be settled it shall be enrolled for hearing before the Appeals Committee.The process is voluntary and funded by the CMS.Only matters that are identified by the secretary of the Appeals Committee will be referred for mediation.
Q46. How are rulings by the CMS enforced?
Non-compliance with rulings issued by the Appeals Committee or the Appeal Board must be reported to the CMS by informing the same person from whom you received the ruling.The CMS official will then refer the matter to the Compliance and Investigations Unit for enforcement.
Claims, Payment of Accounts and Medical Savings Account (Msa)
Q47. Within what period of time must my account for services or claim reach my medical scheme?
The account must be submitted before the end of the fourth month from the last date of the service rendered as stated on the account.
Q48. May credit balances in my personal savings account be withdrawn in cash?
Only when you terminate your membership of the scheme or a benefit option, and enrol in another benefit option or medical scheme without a savings account or you do not enrol with another medical scheme at all.
Q49. May contributions be paid out of my savings account?
No, except on termination of membership. Funds in the MSA may be used by the scheme to offset any debt owed by the member which would include contributions.
Q50. Can co-payments in respect of PMB benefits be paid out of my MSA?
No, the Act specifically prohibits it.
Q51. How do I know whether or not my scheme has paid and what amount has been paid in respect of a claim?
Payment of claims are regulated by the Act, which includes the dispatch to a member of a statement containing full particulars of the transaction, including the amount charged for every service and the amount of the benefit awarded for each service.
Q52. Within what period of time must the scheme pay my claim?
If the account or claim is correct and acceptable for payment, it should be paid within 30 days of receipt of the claim.
Q53. What is an ex GRATIA payment and do I have a right to such benefits?
It is a discretionary benefit which a medical scheme may consider, normally when the member suffers undue hardship. Schemes are not obliged to make provision therefore in the rules and members have no statutory right thereto.
Q54. What is National Health Reference Price List (NHRPL)?
This is a price list for health services published by Council for Medical Schemes and is used as a guide to medical schemes and healthcare providers for reimbursement of health services rendered.
Q55. Is a provider of a healthcare service entitled to charge more than the fees determined by medical schemes / the tariff specified in the NHRPL?
Yes. Healthcare providers are free to determine their own fees. Consequently, if an account is in excess of the fee determined by the rules of a medical scheme / NHRPL for a particular service, the difference is for the account of the member.
Management and Functioning
Q56. Who manages the affairs of a medical scheme?
Board of Trustees (BOT) of which at least 50% must be elected from amongst members. The rules of the scheme will determine how trustees are elected and how long their tenure will be. These persons must be fit and proper to perform their duties, ensure that the interests of members are protected and that the scheme is properly administered. If they are guilty of misconduct, or reckless trading, they may be held accountable for losses incurred by the scheme.The day to day affairs of the scheme is managed by a Principal Officer (PO) who reports to the BOT.
Q57. How do medical schemes function?
Contributions are pooled for the benefit of members. Schemes are not-for-profit entities and belong to the members. Therefore, the trust funds remains in the scheme, for the benefit of members and their dependants.The Act specifies how medical schemes must treat and invest the funds of the scheme. The funds in a member’s savings accounts do not form part of the risk pool and is used for the exclusive benefit of the member and his/her dependants.
Q58. May I participate in the operation of my scheme?
Yes, in terms of the Act, a medical scheme must provide for annual general meetings (AGMs) where members may voice their views and also present motions. Medical schemes may also hold meetings at different venues for the benefit of members or provide for regional meetings to maximise member participation.
Q59. Are insurance products regulated by the Medical Schemes Act?
Certain stated benefit type insurance products, like hospital cash back plans, international travel insurance, gap cover, etc. are insurance products and fall under the jurisdiction of the Financial Sector Conduct Authority (FSCA). From 1 April 2017 the new Demarcation Regulations will come into effect which will mean that primary healthcare insurance policies will fall under the jurisdiction of the CMS.
Q60. What certainty does a member have that the scheme is able to meet its liabilities in terms of claims?
In terms of the Act a medical scheme must at all times have enough assets to cover its liabilities. Furthermore, a scheme must, over a period of time, hold surplus or accumulated funds equal to at least 25% of gross annual contributions to ensure financial stability and ability to pay claims.
Q61. As members of a group, may we leave the medical scheme to which we belong and claim our pro rata portion of the reserves?
No, in terms of the Act, such reserves are assets of that scheme and all moneys and assets belonging to a scheme must be kept by that scheme.
Q62. Can a medical scheme change its rules and thereby move the goal post?
Yes, there is provision in the Act and in the rules of every medical scheme on how the Board of Trustees may amend rules. All rule amendments must however be approved and registered by the Registrar of Medical Schemes as required by the Act. The scheme will still notify members of such changes as they entitled to it.
Termination of Membership by the Scheme
Q63. When may my scheme terminate or suspend my membership?
Only on the grounds of failure to pay membership fees timeously or other debts owing to the scheme, submission of fraudulent claims, committing other fraudulent acts, or the non -disclosure of material information.
Q64. What happens if my membership is cancelled due to the non-disclosure of material information?
Application forms must be completed by providing all the information requested by the scheme honestly and with the necessary details required.If you are unsure ask your broker or the medical scheme to assist you. Ignorance is not an excuse in law and members who do not provide the correct and truthful information about their pre-existing conditions will be in a difficult position if their membership is terminated due to non-disclosure. Any person who knowingly makes or accuses a false representation or has knowledge of any fact that can affect his/her right to obtain a certain benefit and fails to disclose same, shall be guilty of a criminal office and is liable on conviction to a fin or to imprisonment.
If membership is terminated due to non-disclosure the contract entered into between the member and the scheme becomes null and void, i.e. without any legal effect.The parties must therefore be placed in the same position that they would have been in if the agreement was never concluded.This means that the scheme must pay back all the contributions paid by the member and they must reverse all the claims paid to healthcare providers on behalf of the member.
Q65. If my membership has been terminated due to non-disclosure may I re-apply to the same medical scheme and provide the correct details?
Yes, in terms of the open enrollment principle a member may join any open medical scheme of his/her choice.
Q66. Within what period of time must my account for services or claim reach my medical scheme?
The account must be submitted before the end of the fourth month from the last date of the service rendered as stated on the account. If the scheme is of the opinion that the claim is erroneous or unacceptable for payment it has to refer the claim back to the member and to the provider with reasons for doing so and provide them with an opportunity to correct the claim. The member and the provider must then be provided with a further 60 days from the date that it was returned, to resubmit the account. This period runs concurrently with the initial 4 months provided to submit the account which means that if the account is for example submitted on the same day that the services were rendered and then sent back for corrections, the account will only become stale on the last day of the fourth month from the date of service.
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