CMS and FSCA
  • A regulator has asked medical schemes to not just kick out members who miss payments during the Covid-19 disaster.
  • Instead, medical aids are supposed to look into each case individually.
  • It is not clear whether this is practically possible for big schemes.
  • Meanwhile a different regulator has given employers some leeway in paying into pension funds – but urged them to keep up the payments that cover life insurance and similar protections.
  • For more stories go to www.BusinessInsider.co.za.

Medical aids should not simply kick out members who fail to make their payments during the Covid-19 crisis, the Council for Medical Schemes (CMS) has asked.

Instead they should consider the circumstance of individuals first, before yanking their coverage.

"In the spirit of social solidarity as outlined by the President during his address to the nation on Monday, 23 March 2020, the CMS requests that schemes investigate all disruptions to member contributions on a case by case basis and determine the merits thereof, prior to termination," the body said in a circular late on Thursday.

Termination of membership could lead to immediate suspension of all benefits.

By law Covid-19, the disease caused by the SARS-CoV-2 novel coronavirus, is a minimum benefit for all medical schemes. That means medical aids must cover the costs of testing, medicine and hospitalisation – up to rehabilitation after recovery – for all members, regardless of their level of cover.

Major medical schemes were not immediately available on Friday morning to answer questions on their practical ability to implement that call. The economic consequences of Covid-19, and measures to contain it, may include unprecedented job losses in South Africa – with many medical aid members unable to keep up their payments.

A pension-fund break for employers – but they should protect life insurance

Meanwhile the Financial Sector Conduct Authority (FSCA) on Thursday issued a circular that urged pension funds to keep up payments on risk-benefit premiums, but to cut employers some slack on other contributions.

Paying the risk-benefit premiums will keep in force policies attached to pension funds, such as life insurance, temporary disability, and in some cases loss-of-income protection.

Pension funds should apply existing rules "to alleviate the challenges that [employers and employees] are currently facing," the FSCA said – or should urgently create such rules if they do not have any.

Companies must pay their pension fund contributions within seven days of the end of the month, but can request a suspension of or reduction in those payments, depending on the rules of each fund.

If employers make such a request, pension fund members must be informed within 30 days. 

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