Medical Schemes Act

Download Complete PDF MEDICAL SCHEMES ACT NO. 131 OF 1998
[ASSENTED TO 20 NOVEMBER, 1998] [DATE OF COMMENCEMENT: 1 FEBRUARY, 1999] (English text signed by the President)

as amended by
Medical Schemes Amendment Act, No. 55 of 2001
Medical Schemes Amendment Act, No. 62 of 2002
Intelligence Services Act, No. 65 of 2002
[with effect from 20 February, 2003—see title DEFENCE] General Intelligence Laws Amendment Act, No. 52 of 2003
[with effect from 28 February, 2003—see title DEFENCE] Prevention and Combating of Corrupt Activities Act, No. 12 of 2004
[with effect from 27 April, 2004—see title CRIMINAL LAW AND PROCEDURE]

ACT
To consolidate the laws relating to registered medical schemes; to provide for the
establishment of the Council for Medical Schemes as a juristic person; to provide
for the appointment of the Registrar of Medical Schemes; to make provision for the
registration and control of certain activities of medical schemes; to protect the
interests of members of medical schemes; to provide for measures for the coordination
of medical schemes; and to provide for incidental matters.

ARRANGEMENT OF SECTIONS

CHAPTER 1
DEFINITIONS
1. Definitions

CHAPTER 2
APPLICATION OF ACT
2. Application of Act

CHAPTER 3
COUNCIL FOR MEDICAL SCHEMES
Part 1: Council
3. Establishment of Council for Medical Schemes
4. Constitution of Council
5. Disqualification as member of Council, and vacation of office
6. Term of office of member of Council
7. Functions of Council
8. Powers of Council
9. Committees of Council
10. Meetings of Council
11. Remuneration of members of Council and committees
12. Funds of Council
13. Accounting officer
14. Annual report
15. Consultation between Minister and Council
16. Cases of improper or disgraceful conduct
17. Liquidation
Part 2: Registrar, Deputy Registrar and staff of Council
18. Appointment of Registrar and Deputy Registrar of Medical Schemes
19. Staff of Council

CHAPTER 4
MEDICAL SCHEMES
20. Business of Medical Scheme
21. Use of designation “medical scheme”
21A. Marketing
22. Application for registration
23. Name of medical scheme and change of name
24. Registration as medical scheme
25. Notification of registration
26. Effect of registration
27. Cancellation and suspension of registration
28. Prohibition of membership of, and claims against, more than one medical
scheme

CHAPTER 5
RULES OF MEDICAL SCHEME
29. Matters for which rules shall provide
29A. Waiting periods
30. General provisions to be contained in rules
31. Amendment of rules
32. Binding force of rules

CHAPTER 6
BENEFIT OPTIONS
33. Approval and withdrawal of benefit options
34. Prohibition on cession and attachment of benefits

CHAPTER 7
FINANCIAL MATTERS
35. Financial arrangements
36. Auditor and audit committee
37. Annual financial statements
38. Registrar may reject returns

CHAPTER 8
DOCUMENTS
39. Requirements in regard to documents to be deposited with Registrar
40. Effect of Registrar’s certificate on documents
41. Right to obtain copies of, or to inspect certain documents

CHAPTER 9
POWERS OF REGISTRAR
42. Registrar may require additional particulars
43. Enquiries by Registrar
44. Inspections and reports
45. Persons not registered to furnish information
46. Removal of member of board of trustees

CHAPTER 10
COMPLAINTS AND APPEALS
47. Complaints
48. Appeal to Council
49. Appeal against decision of Registrar
50. Appeal Board

CHAPTER 11
JUDICIAL MATTERS
51. Application to High Court
52. Judicial management
53. Winding-up
54. Compromise
55. Information as to compromise
56. Appointment of curator

CHAPTER 12
GENERAL
57. General provisions on governance
58. Administration by intermediary
59. Charges by suppliers of service
60. Preservation of secrecy
61. Undesirable business practices
62. Limitation of liability
63. Amalgamation and transfer
64. Voluntary or automatic dissolution
65. Broker services and commission
66. Offences and penalties
67. Regulations
68. Repeal of laws, and transitional arrangements
69. Short title and commencement
Schedule 1 Laws repealed by section 68 (1)
Schedule 2 Transitional arrangements

 

CHAPTER 1
DEFINITIONS
1. Definitions.—(1) In this Act, unless inconsistent with the context—

“Academy” means the Academy as defined in section 1 of the Intelligence Services
Act, 2002;
[Definition of “Academy” inserted by s. 40 of Act No. 65 of 2002.]

“actuary” means any fellow of an institute, faculty, society or chapter of actuaries
approved by the Minister of Finance;
“administrator” means any person who has been accredited by the Council in terms
of section 58, and shall, where any obligation has been placed on a medical scheme in
terms of this Act, also mean a medical scheme;

“Agency” means the Agency as defined in section 1 of the Intelligence Services Act,
2002;
[Definition of “Agency” inserted by s. 40 of Act No. 65 of 2002.] “Appeal Board” means the Appeal Board established by section 50 (1);
“beneficiary” means a member or a person admitted as a dependant of a member;
[Definition of “beneficiary” inserted by s. 1 (a) of Act No. 55 of 2001.]

“board of trustees” means the board of trustees charged with the managing of the
affairs of a medical scheme, and which has been elected or appointed under its rules;
“broker” means a person whose business, or part thereof, entails providing broker
services, but does not include—
(i) an employer or employer representative who provides service or advice
exclusively to the employees of that employer;
(ii) a trade union or trade union representative who provides service or advice
exclusively to members of that trade union; or
(iii) a person who provides service or advice exclusively for the purposes of
performing his or her normal functions as a trustee, principal officer,
employee or administrator of a medical scheme,
unless a person referred to in subparagraph (i), (ii) or (iii) elects to be accredited as a
broker, or actively markets or canvasses for membership of a medical scheme;
[Definition of “broker” inserted by s. 1 (b) of Act No. 55 of 2001 and substituted by
s. 1 (a) of Act No. 62 of 2002.]

“broker services” means—
(a) the provision of service or advice in respect of the introduction or
admission of members to a medical scheme; or
(b) the ongoing provision of service or advice in respect of access to, or
benefits or services offered by, a medical scheme;
[Definition of “broker services” inserted by s. 1 (b) of Act No. 62 of 2002.]

“business of a medical scheme” means the business of undertaking liability in
return for a premium or contribution—
(a) to make provision for the obtaining of any relevant health service;
(b) to grant assistance in defraying expenditure incurred in connection with
the rendering of any relevant health service; and
(c) where applicable, to render a relevant health service, either by the
medical scheme itself, or by any supplier or group of suppliers of a
relevant health service or by any person, in association with or in terms of
an agreement with a medical scheme;

“complaint” means a complaint against any person required to be registered or
accredited in terms of this Act, or any person whose professional activities are
regulated by this Act, and alleging that such person has—
(a) acted, or failed to act, in contravention of this Act; or
(b) acted improperly in relation to any matter which falls within the
jurisdiction of the Council;
[Definition of “complaint” substituted by s. 1 (c) of Act No. 55 of 2001.] “Comsec” means Electronic Communications Security (Pty) Ltd established by
section 2 of the Electronic Communications Security (Pty) Ltd Act, 2002 (Act No. 68
of 2002);
[Definition of “Comsec” inserted by s. 25 (2) of Act No. 52 of 2003.] “condition-specific waiting period” means a period during which a beneficiary is
not entitled to claim benefits in respect of a condition for which medical advice,
diagnosis, care or treatment was recommended or received within the twelve-month
period ending on the date on which an application for membership was made;
[Definition of “condition-specific waiting period” inserted by s. 1 (d) of Act No. 55
of 2001.]

“Council” means the Council for Medical Schemes established by section 3;

 

“curator” means a curator appointed under section 56;

 

“dependant” means—
(a) the spouse or partner, dependant children or other members of the
member’s immediate family in respect of whom the member is liable for
family care and support; or
(b) any other person who, under the rules of a medical scheme, is recognised
as a dependant of a member;
[Para. (b) substituted by s. 1 (e) of Act No. 55 of 2001.] “financial year” means each period of 12 months ending on 31 December;
“general waiting period” means a period in which a beneficiary is not entitled to
claim any benefits;
[Definition of “general waiting period” inserted by s. 1 (f) of Act No. 55 of 2001.]

“Master” means the Master of the High Court;

“medical scheme” means any medical scheme registered under section 24 (1);

“member” means a person who has been enrolled or admitted as a member of a
medical scheme, or who, in terms of the rules of a medical scheme, is a member of
such medical scheme;
“Minister” means the Minister of Health;
“officer” means any member of a board of trustees, any manager, principal officer,
treasurer, clerk or other employee of the medical scheme, but does not include the
auditor of the medical scheme;
“prescribed” means prescribed by regulation;
“principal officer” means the principal officer appointed in terms of section
57 (4) (a);
“Registrar” means the Registrar of Medical Schemes appointed in terms of section
18;
“reinsurance contract” means any contractual arrangement whereby some element
of risk contained in the rules of the medical scheme is transferred to a reinsurer in
return for some consideration;
[Definition of “reinsurance contract” inserted by s. 1 (g) of Act No. 55 of 2001.] “reinsurer” means an insurer—
(a) registered as a long-term insurer in terms of section 9 of the Long-term
Insurance Act, 1998 (Act No. 52 of 1998), unless that insurer is
prohibited from engaging in the practice of reinsurance in terms of
section 10 of that Act; or
(b) registered as a short-term insurer in terms of section 9 of the Short-term
Insurance Act, 1998 (Act No. 53 of 1998), unless that insurer is
prohibited from engaging in the practice of reinsurance in terms of
section 10 of that Act;
[Definition of “reinsurer” inserted by s. 1 (g) of Act No. 55 of 2001.] “relevant health service” means any health care treatment of any person by a
person registered in terms of any law, which treatment has as its object—
(a) the physical or mental examination of that person;
(b) the diagnosis, treatment or prevention of any physical or mental defect,
illness or deficiency;
(c) the giving of advice in relation to any such defect, illness or deficiency;
(d) the giving of advice in relation to, or treatment of, any condition arising
out of a pregnancy, including the termination thereof;
(e) the prescribing or supplying of any medicine, appliance or apparatus in
relation to any such defect, illness or deficiency or a pregnancy, including
the termination thereof; or
( f ) nursing or midwifery,
and includes an ambulance service, and the supply of accommodation in an institution
established or registered in terms of any law as a hospital, maternity home, nursing
home or similar institution where nursing is practised, or any other institution where
surgical or other medical activities are performed, and such accommodation is
necessitated by any physical or mental defect, illness or deficiency or by a pregnancy;
“restricted membership scheme” means a medical scheme, the rules of which
restrict the eligibility for membership by reference to—
(a) employment or former employment or both employment or former
employment in a profession, trade, industry or calling;
(b) employment or former employment or both employment or former
employment by a particular employer, or by an employer included in a
particular class of employers;
(c) membership or former membership or both membership or former
membership of a particular profession, professional association or union;
or
(d) any other prescribed matter;
“rules” means the rules of a medical scheme and include—
(a) the provisions of the law, charter, deed of settlement, memorandum of
association or other document by which the medical scheme is
constituted;
(b) the articles of association or other rules for the conduct of the business of
the medical scheme; and
(c) the provisions relating to the benefits which may be granted by and the
contributions which may become payable to the medical scheme;
“Service” means the South African Secret Service as defined in section 1 of the
Intelligence Services Act, 2002;
[Definition of “Service” inserted by s. 40 of Act No. 65 of 2002.] “this Act” includes the regulations.
(2) For the purposes of this Act, any reference in this Act to a medical scheme
shall be construed as a reference to that medical scheme or to the board of trustees of that
medical scheme, as the case may be.