Dumisani asks: My company has a closed medical scheme that is compulsory for all management staff. According to company policy, employees are not allowed to choose their own medical aid in the open market. Is this legal? Why do companies create closed schemes? Who benefits?
Maya replies: A company can force you to join a particular scheme by including it as a condition of service, and this is entirely legal so you are pretty much stuck with the scheme.
According to Bernie Clark of Alexander Forbes Health, company schemes — known as closed schemes — are established in terms of the Medical Schemes Act and are regulated. Open schemes are those offered directly to the public.
The good news is that closed schemes aim to provide better, more relevant overall medical aid coverage than their open-market schemes. For example, a closed scheme does not have to spend money on marketing so administration costs would be lower.
Clark says that although they offer fewer choices, they should always offer better value for money or have a more relevant benefit offering for the employees than an open scheme. If they are not then they “are relics of history and should be closed”.
Clark says large companies historically established medical schemes because they could provide better cover for their employees. However, medical schemes are complex and time-consuming to manage, so they are sometimes unable to consistently deliver.
If you are concerned about your company’s scheme it may be worth speaking to HR to find out exactly what your benefits are and compare these to open schemes to see if you are receiving a fair deal.
If not, don’t be afraid to take this up with the company — remember even the HR director would be on the scheme. It is to everyone’s benefit to make sure the scheme is delivering.
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