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COVID-19: Impact on medical scheme contributions by financially distressed employers and employees

28 March 2020
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The Council for Medical Schemes in concurrence with the Minister of Health published ‘Circular 25 of 2020: COVID-19 lockdown measures’ on 26 March 2020 (Circular).

The purpose of the Circular is to advise the industry of interventions aimed at protecting the interests of members during the COVID-19 pandemic and the current national lockdown until 16 April 2020.

Some of the interventions include:

  • confirmation that COVID-19 is regarded as a prescribed minimum benefits condition, and that cases of COVID-19 should be paid in full in line with the current published National Institute for Communicable Diseases guidelines.  This should cover all consultations, clinically appropriate diagnostic tests and medication as well as the costs of hospitalisation and rehabilitation; and
  • requesting that medical schemes, in the spirit of social solidarity, ‘investigate all disruptions to member contributions on a case by case basis and determine the merits thereof, prior to termination’.

Like the Financial Sector Conduct Authority in its recent Communication entitled  ‘FSCA Communication 11 of 2020 (RF) – COVID-19: Section 13A of the Pension Funds Act, 1956 and financially distressed employers and employees – submission of urgent rule amendments’ the CMS has also acknowledged that employers and employees in financial distress as a result of the COVID-19 pandemic may not be able to pay full contributions to medical schemes. 

It appears that the schemes are encouraged to give some temporary reprieve before terminating membership in instances where, for example, the employer or employee is financially distressed and member contributions are not forthcoming.

Members and employers are urged to carefully consider the rules of their applicable medical schemes to determine what they provide in the event of non-payment or partial payment of medical schemes contributions, alternatively to contact the relevant medical’s call centre for information in relation to contributions. 

As advised by the CMS in the Circular, another intervention is that medical schemes and administrators of medical schemes are regarded as support to essential services and accordingly need to continue with certain of their respective functions during the lockdown period.  These functions include, among others, membership maintenance, claims management as well as call centre functions.