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Circular 72 of 2020: Transitioning plans for Discovery Primary Care products

On 29 October 2020, the Council for Medical Schemes’ (CMS) Appeals Board set aside the exemption granted to Discovery Life Limited (Discovery Life) on 18 January 2019. The exemption was granted in terms of section 8(h) of the Medical Schemes Act No 131 of 1998 (MSA).

It exempted Discovery Life’s primary health products from complying with the provisions of section 20(1) of the MSA. Section 20(1) provides that no person shall carry on the business of a medical scheme unless that person is registered as a medical scheme under section 24 of the MSA. Discovery Life is not a registered medical scheme and its products are not registered benefit options.

The Appeals Board maintained that the Discovery Primary Care products did not meet the requirements as set out in the Demarcation Exemption Framework and the application for exemption was submitted after 31 March 2017. As such, the CMS wishes to inform stakeholders of the following transitioning plans where Discovery Primary Care products are concerned:

Protection of members

The CMS will engage Discovery Life to ensure that appropriate mechanisms are in place to transition affected policyholders on the Discovery Primary Care Advanced and Discovery Primary Care Activate options and ensure that they have continuity of cover.

In the next few weeks, the Office will ensure that Discovery Life develops and implements a transitioning plan in the best interests of affected policyholders, within the 31 May 2021 deadline.

31 March 2021

The current exemption of Discovery Life terminates on 31 March 2021. The ruling will allow Discovery Life two additional months to ensure that the product is wound up by 31 May 2021.

31 May 2021 deadline

The ruling is clear that the cancellation of the Discovery Life exemption is suspended until 31 May 2021 at the latest. It is also clear that the exemption framework is to accommodate members that are already enrolled.

LCBO Advisory Committee

The Low-Cost Benefit Option Advisory Committee remains engaged with addressing the challenges faced by primary health insurance providers in complying with the MSA and the need by medical schemes to develop options for low-income earners. The next Advisory Committee meeting is scheduled to take place on the 3rd of December 2020.

Download the Circular here.