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Medical schemes: Beware inflated late-joiner fees

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Beware the penalty if you ever joined a medical aid after your 35th birthday. Irregularities in terms schemes present the calculation in the late-joiner penalty may lead to some members being overcharged.

An independent medical aid comparison site, the Medical Aid Bible, submitted complaints to the Council of Medical Schemes (CMS) for the alleged misrepresentation in the late-joiner penalty calculation from the names in the medical schemes are well-known to Moneyweb, however they haven’t been notified via the CMS in regards to the complaints.

Eve Dmochowska, founder of the Medical Aid Bible, says the site received several queries from scheme members who suspected that the late-joiner penalties have been incorrectly calculated.

Not every late-joiner is overcharged, but there will be inconsistency from the ways different schemes present the calculation within the penalty. “We have come across a variety of schemes who misrepresent how a penalty is calculated, into their favour,” she says.

These method of complaints aren’t anything new, the newest CMS Annual Report ensures that the council resolved 46 official complaints about late-joiner penalties in 2014 and 33 in 2015.

How it works

The Medical Schemes Act allows for a late-joiner penalty should the applicant is over 35, under certain conditions.

The penalty is calculated like a portion of the applicant’s basic contribution, which excludes the savings aspect of the contribution. It requires the applicant’s age under consideration together with previous membership. The more time the applicant was without medical aid, the higher the imposed penalty.

Membership connected with an overseas medical aid is not going to count for credible coverage nor any period of cover being a dependent below the age of 21.??

The penalty might be included to the contribution the member pays for risk benefits (including, hospital stays and chronic medicine) without into the contribution of your medical savings, during membership. It is applicable to all kinds of medical aid plans, including hospital plans.

To determine the penalty this calculation can be used: Age upon application minus (35 years + a great deal of previous cover) = total years uncovered.

Number of years uncovered and applicable percentage to calculate fee

Years uncovered

Late-joiner penalty?


1 to 4 years

5% of contribution


5 to 14 years?

25% of contribution


15 to 24 years

50% of contribution


25+ years

75% of contribution?

Example: If you are 58 years’ old about the date of registration and belonged to a new medical scheme for 12 years, the following late-joiner penalty band would apply:?

58 – (35+12) = 11 uncovered years, resulting within a 25% late-joiner penalty in line with the table above.?

Source: Discovery Health Medical Scheme


The Medical Aid Bible’s complaints resistant to the schemes are mainly because they all, in a variety of communication formats, often base the calculation around the credible coverage that applicants had after age 35.

Alicia Schoeman, legal adviser with the CMS, confirmed that creditable coverage as defined in Regulation 11 includes any period when a late joiner became a member or possibly a dependant on the medical scheme, not merely once you hit 35. “It is really a factual statement and definitely will always apply no matter the era of you.”

So in particular if Sally is 38 and had been a part of a reputable South African medical scheme between age 25 and 30, that Few years is highly recommended when calculating credible coverage. Not the 0 years she didn’t belong to a scheme when you are 35.

The Regulations in the Medical Schemes Act Regulations allows the following concise explanation of credible coverage:

Dmochowska states she’s no evidence the particular schemes actually maliciously overcharge members and that it is feasible actually merely mis-representing the penalty to the application form, brochure or website, and not applying the wrong interpretation.

The consequences if applied incorrectly are that members may very well be overcharged knowning that some may be at a less-than-ideal plan, since they believe they can provide the plan they would like to be on.

Not always applied

As late-joiner penalties form a part of the legislation governing medical aid cover, it may be so that it’s going to be used if the applicant meets the standards for that penalty. But schemes are flexible with each use their particular discretion whether use the late-joiner fee. A scheme can impose less penalty, such as 10% get the job done applicant actually qualifies for 25%, or waive it entirely.

Proof of membership

To ensure their credible coverage is taken into consideration and properly calculated, late joiners need membership certificates from previous schemes as confirmation of former membership.

The volume of schemes have dwindled significantly within the last few years. In 2007 there was higher than a 120 schemes, whereas nowadays there are necessarily about 80. Hence it may be hard for former members to call membership certificates.

If you are not capable to acquire a certificate, a sworn affidavit of one’s membership details just like name within the scheme, membership number and period really should be accepted based on the Medical Schemes Act. You ought to however have tried and taken all reasonable steps to receive proof.

Oops! You can easliy not locate your form.

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