Healthcare advisor or medical aid salesperson?
There are many financial advisors who promote their services as healthcare advisors, yet in reality only offer various medical aid scheme solutions.
Brokers who offer various medical aid schemes are offering fixed price products with pre-determined benefits for a pre-determined remuneration structure. These brokers are unable to offer varying levels of service for different fee structures, since medical aid scheme commissions or fees are pre-determined by legislation.
The legislation regarding both benefits and fee structures means that the broker can only offer the same product as the opposition broker. The only differentiating aspect would be a promise of various levels of service. This is a precarious situation for a medical aid broker, as a contract may be lost to an opposition broker due to a real, or perceived, dip in service levels, while the product remains the same.
Client requirements
However, if one looks to the needs or requirements of a client, then surely a healthcare advisor should be aware all avenues of healthcare cover and the restrictions applicable to each, and be able to provide advice regarding the pitfalls of all possible healthcare-related situations.
In practice
For example, a corporate client may ask: “If two of my employees are driving together in a company vehicle to attend to a work related task and are involved in an accident which results in injuries to both, where do I submit my claim in order to ensure my cost of healthcare risk is kept to a minimum?”
Depending on the exact circumstances, the resulting cost of the medical expenses may be claimed from:
(a) Workman’s Compensation (COID) – the injury occurred while on work duty.
(b) Road Accident Fund (RAF)
(c) Passenger liability – the passenger may have been injured as a result of negligence of the driver.
(d) Medical aid scheme – although schemes exclude costs recoverable from a third party.
(e) Group personal accident – may only pay costs not covered by COID, RAF and the employee’s medical aid scheme.
Although claims may eventually be submitted to all of the above risk bearers, only the medical aid scheme cover will ensure immediate medical attention.
Advisors limited
A healthcare advisor should be able to direct the client regarding the submission of claims, based on knowledge of how the legislative and private scopes of cover operate.
The medical aid advisor is best placed to advise the client on all aspects of healthcare funding. However, due to the FAIS legislation, the medical aid broker many not have the FSP licence extension which allows them to advise on typical short–term insurance cover. Similarly, short-term brokers who place the group personal accident cover, liability cover, corporate travel and gap cover, may not offer any advice regarding the medical aid option if they do not have the required FSP extension.
In such scenarios it may be questioned how advice given regarding healthcare funding is in the best interest of the client.
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