Satisfy your Risk Committee - Review it now!

Jill Larkan, Head of Healthcare consulting at Financial Advisory business GTC.

Given the depth of the comparisons required, and the employee presentations needed to implement a change in medical aid provider, NOW is the right time to begin this process. Starting this process too late, will result in a delay which could mean that the scheme remains in its current state for another 18 months.

Requirements as set out in the King Corporate Governance Reports state that Employee Benefits should be reviewed annually. The structure, benefits, costs, providers and consultants to the scheme should be reviewed by each employer’s appointed King Risk Committee or sub-committee.

Jill Larkan, Head of Healthcare consulting at leading financial advisory business GTC says: “It is incumbent on the company to ensure that the medical aid and service provider are able to provide suitable, sustainable and cost effective cover that appropriately meets employees’ health cover requirements. Without carefully considered and ongoing reviewing of these factors, many company’s fail to meet their compliance obligations to their Board and Employees.”

Larkan adds that in order to provide employers with integral guidance relating to the required comparisons, GTC Healthcare provides its employer clients with a copy of their annual survey which analyses and ranks premiums of every open medical aid in South Africa. These ratings are then combined with the Council for Medical Schemes’ Annual Report on performance and demographics resulting in an inclusive indicator of better performing plans per category, overlaid by an indication of performance and longevity of each scheme. This ideally offers employers the opportunity to “tick” the necessary boxes in their annual Risk Analysis and satisfy many tasks required to ensure healthy Corporate Governance practices.

“The latest survey, which is due to be published in May 2016, will certainly help companies to conduct a professional review of their healthcare schemes and provide a clear indication of macro indicators , relative to company needs,” Larkan continues.

Larkan also advises organisations to consider consulting with a qualified team of healthcare advisors when conducting this process.

“Qualified, professional advisors are integral as they carefully guide you through this complicated and detailed investigation ensuring benefits and services are relative to your company’s requirements, and that these remain a top priority,” she adds.

The probable timelines for implementation of a January 2017 employer scheme change are depicted here:

The above infographic describes the following timeline:

1. Letter of investigation 1 June (3 – 6 week investigation period – Open plans)
2. Presentation of Report mid-July (consider report)
3. Staff survey (First 2 weeks of August – Who would like to consider alternate plans / brokers)
4. Staff presentations (Last 2 weeks of August)
5. Decision to change (1 September) – Notice to existing and new plans
6. Employer application form (1 September)
7. Member presentations September (2 – 4 weeks)
8. Member Application forms October (2 – 4 weeks)
9. Reconciliation of membership movements and forms (1 November)
10. Delivery of new membership packs and cards (November/December)