Who owns your medical savings account??

Constitutional Court rules in favour of Genesis medical scheme.

The Council for Medical Schemes has just released Press Release 9 of 2017.

The Court has ruled that medical savings accounts can be treated as assets of medical schemes.

Why is this of any importance?

Well, in the press release, which you can access below… mention is made that:

For the CMS, the significance of this judgement lies in the fact that members of medical schemes are not entitled to earn interest on the portion of the money in the PMSA, which according to the judgement, belongs to the medical scheme once such funds are deposited into the scheme’s account. An equally noteworthy implication is the huge bearing on what happens to members’ contributions in a situation where a scheme is declared insolvent. The implication of the judgement is that the members’ PMSA cannot be ring-fenced from being accessed by creditors should a scheme become liquidated.

Which in effect means that if you are on an option that has a medical savings account/ personal medical savings account- you need to keep an eye out that your scheme is managed well, as you are no longer able to consider your savings account as ring fenced (untouchable) by creditors.

“We will continue to be vigilant as we exercise our regulatory oversight. It is important for us that members of medical schemes affected by the judgement still be protected and at this stage would like members to be aware of the impact of the judgement on any monies they may have in savings accounts with their particular scheme“, says Acting Registrar for the CMS, Dr Sipho Kabane.

The above quote is quite scary to me, as it is a pretty broad statement and I am not sure why a warning “to be aware” is given… just keep in mind though.

We also know that the largest open scheme pays interest on the medical savings account balance from year to year… I don’t expect that they will change this.

If there is any correspondence from that scheme… I will link it to this post…so that you all remain up to date with this issue.

Here is the information regards this judgement in terms of Discovery Health, read post here.

(Aside): As far as I know the functioning of the Council for Medical Schemes is paid for by a levy payable by schemes and healthcare brokers… so ruling the costs come from the Council for Medical Schemes seems almost as if the costs are eventually going to be made up for, from those self same levies.

Here is a link to the Press Release: PressRelease9Of2017

 

Who owns your medical savings account?? was last modified: June 23rd, 2017 by Kenny Williamson

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