The medical aid late joiner penalty: bands, formula and a worked example

Regulation 11 defines a late joiner as an applicant, or an adult dependant of an applicant, who is 35 or older on the date of application. Children are not late joiners.

There is one exception. Anyone who has been covered by one or more medical schemes since before 1 April 2001, without a break of more than three consecutive months since that date, is not a late joiner, whatever their age.

The rule targets first-time or lapsed joiners, not people who moved schemes. If you were continuously covered, or can show enough earlier cover, the formula below reduces or removes the penalty.

Regulation 13 sets the maximum penalty for each band. A scheme may apply a lower penalty, but not a higher one.

Contributions on a medical scheme are otherwise set by income, or number of dependants, or both, and not by age or state of health. The late joiner penalty is the prescribed exception to that community rating rule.

Regulation 13(3) gives the formula:

A = B minus (35 + C)

• B is your age when you apply.
• C is the number of years of creditable coverage you can demonstrate.
• A is the number of years that puts you in a band in the table above.

The table starts at 1 year, so a result below 1 leaves no band to apply. Some examples using only this arithmetic:

The example rows show why every year of proven cover matters. It takes years off the count, and it can drop you a whole band.

Say a couple applies to an open scheme for a plan where each adult's share of the contribution is R1 000 a month. This is an illustrative figure, not the price of a real plan.

• The main member is 45 with no earlier cover. A = 45 minus 35 = 10, which is the 5 to 14 year band. The maximum penalty is 25% of that member's R1 000 share, which is R250 on top of the R1 000, so that adult pays at most R1 000 plus R250.
• The spouse is 33. They are under 35, so no penalty applies and their share stays at R1 000.

If the main member could prove 6 years of earlier cover, A falls to 4, the band becomes 5%, and the maximum penalty is one twentieth of the share instead of a quarter. If a 62-year-old with no cover applied, the maximum would be 75%, or R750 on the same R1 000 share.

Penalties apply to the adult's portion only. A scheme may also charge less than the maximum, so ask for the exact loading in writing before you accept the offer.

Creditable coverage is the number that reduces your band, so evidence matters.

• Ask every scheme you belonged to for a membership certificate showing your start and end dates.
• If you cannot get documents, Regulation 13(6) accepts a sworn affidavit as sufficient proof of creditable coverage.
• If you find proof after the scheme has already imposed a penalty, the scheme must recalculate it. The revised penalty applies from the date you provide the evidence, not from the start of your membership, so hand it in as early as possible.

Gather this before you apply, together with the other papers listed in our documents you need to join medical aid checklist.

It can. Regulation 13(5) says late joiner penalties may continue to be applied when a member or adult dependant transfers to another scheme. Switching schemes is therefore not a way to escape it, and it is worth checking what a new scheme will charge before you move. Our how to change medical aid guide covers the switching steps.

A late joiner penalty is not a waiting period. A waiting period delays cover for a while, and the penalty raises the price of cover. You can face both together, so read waiting periods and exclusions as well.

The CMS also tells members to check what late joiner penalties or waiting periods may apply before joining a new scheme during Open Season.

• Join before 35 and keep the cover going. Continuous scheme membership is what counts as proof.
• Never let cover lapse for more than three consecutive months if you were covered before 1 April 2001.
• Keep certificates from every scheme. They are the only thing that lowers your A.
• If you are already over 35 and uncovered, join sooner rather than later. Each further year uncovered can move you up a band.
• Ask for the calculation in writing, showing your age, your proven years and the band applied.

Our how to join medical aid guide walks through the whole application.

Raise it with the scheme first and use its own complaints process. If that fails, you can complain to the Council for Medical Schemes. The CMS requires that you first exhaust the scheme's internal process, then send a completed complaint form, your account of the facts, the outcome you want and proof that you escalated with the scheme, to [email protected].

The CMS acknowledges a complaint within 6 working days, and the overall turnaround is 120 calendar days from receipt of the scheme's response and supporting documents. It prefers complaints within 3 years. The Customer Care line is 0861 123 267. Full steps are in the CMS complaints guide, and the rules themselves are in the Medical Schemes Act on the CMS site.