It’s the day after all your monthly debit orders have run. You know the “usual suspects” have been dipping into your bank account because your cell phone has been steadily dancing away to the tune of a flurry of SMS notifications.
Doesn’t this type of text message activity look familiar in and around the beginning of the month?
- FNB :- ) Paid from a/c xyz 01 April R6 962 Ref: RightSure Medical
- FNB :- ) Paid from a/c xyz 01 April R500 Ref: Just Gym
- FNB :- ) Paid from a/c xyz 01 April R2 500 Ref: Monroe Schooling
- FNB :- ) Paid from a/c xyz 01 April R1 100 Ref: FastCell
- FNB :- ) Paid from a/c xyz 02 April R200 Ref: Streaming TV
- FNB :- ) Paid from a/c xyz 02 April R1 500 Ref: In case Insurance
Hot cuppa coffee in hand, you sit down at the kitchen table to do a quick 2-minute recon.
But something doesn’t add up!
All the debit orders check out, except for your medical aid deduction. It’s far more than usual?
What’s even stranger is that you are aware of the annual increase that kicked in at the start of the year, and this is even more than you budgeted for.
“I need to give the medical scheme a call when I get a gap. I’ll add it to my to-do list. Right now, I need to start working on the clean-up.”
It’s clean up time because your eldest recently turned 21 and you’ve had a series of bashes at your home for his coming of age, the last of which was a pool party that ended in the early hours of the morning.
No room in your mind for anything else except a strategic plan to clean up a piles of empty beer bottles and half eaten boerie rolls.
Fast forward 30 days and your cell phone is doing a version of the hot stepper that only a new series of SMS debit order notifications can bring on.
It suddenly dawns on you that you forgot to give your medical scheme a call to query the peculiar debit order last month and you have a feeling it’s happened again.
A quick check of your SMS inbox corroborates your theory 🙁
Did you know that in terms of the Medical Schemes Act (which governs all South African Medical Schemes) no medical scheme may refuse to admit persons who are dependent on the main member of the plan?
It simply comes down to whether the dependant can be defined as an adult or child?
If you are married and belong to a medical scheme, your plan structure probably looks something like this:
- The main member (that is you)
- Adult dependant (your spouse)
- Child dependant/s (your kids)
But what happens when your child turns 21?
In the eyes of a medical scheme that means your “child” is no longer a child dependent and if they are on your medical aid plan, they are going to be bumped up to adult dependant rates immediately.
The biggest gripe most scheme members have is that they simply aren’t aware of this contribution hike until it happens. One month you are paying X and the next month (without warning) you are paying Y.
What does this mean in Rands & Cents?
Let’s assume that you are a family of four and on a middle-of-the-road medical aid plan.
Your monthly contributions might look something like this:
|1 x Main Member||R2 400 pm|
|1 x Adult Dependent||R1 800 pm|
|2 x Child Dependents||R1 924pm|
|Total||R6 124 pm|
Now let’s assume that one of your kids has just turned 21.
This is what your monthly contribution table looks like now:
|1 x Main Member||R2 400 pm|
|2 x Adult Dependent||R3 600 pm|
|1 x Child Dependents||R962 pm|
|Total||R6 962 pm|
Can you see how you’ve gone from 2 x child dependents to 2 x adult dependents?
That’s because your medical scheme now registers your “child” as an adult dependent.
Your monthly contribution has jumped by a staggering R838 per month!
Maybe you’re lucky and you work for a company that subsidises your medical aid contributions by 50% (they pay half). That means you are only in for an additional R419 per month.
Any which way you look at it, if you aren’t prepared for the contribution hike, you are going to feel a little disgruntled.
Is there anything you can do about it?
Downgrading your medical aid plan would be one way of evening out the sudden contribution increase, but that isn’t always advisable. If your child has turned 21 and is still studying, you are well within your rights to submit proof that your child is a student, to your medical scheme, who will be obliged to consider this.
It’s fair to say that most medical schemes will consider a 21-year old, who is studying, still very much financially dependent on their parents and as such would be treated as a “child” dependent.
If your 21-year old isn’t studying, then you only have one of three choices.
- Bite the bullet
- Consider a more cost-effective plan on the same scheme
- Have your child consider taking out a medical aid plan of his or her own
Let us know if you’ve been caught out by a sudden increase in medical aid contributions when your child turned 21 and if you managed to get your medical scheme to budge?
Until next time.
The Wise About Life Team