Medical Aid When Retrenched and Unemployed

Facing the prospect of retrenchment can be quite taxing on any person and one has to consider a host of financial hardships that will inevitably arise due to the lack of employment. Most people choose to trim unnecessary expenses and insurance cover as well as medical aid is often stopped in order to stretch the monthly budget.

However, the cost of private healthcare in South Africa means that you will be financially strained should you not have medical aid cover nor the cash to pay for your medical bills. So what should you do about medical aid cover if you are employed or soon to be retrenched?

Company Medical Aid Gone

If you have been a member of the company medical aid, you may not be allowed to remain on it if it is a restricted scheme. This type of medical aid is reserved for the employees of a company or a worker within a specific sector of industry. You may be able to keep your cover if you find another job within the same sector of industry but if its a company medical aid, you will most likely lose your cover. At this point you will need to consider an open medical aid. Refer to the List of Medical Aids in South Africa for more details on which medical aids are open or restricted. There are laws in place that will allow you to stay on your company medical aid (restricted scheme) for up to one year after you lose your job, however, your employer is not required to continue subsidising the premiums for this cover.

Medical Aid Protection for the Unemployed

Medical aids do not discount the monthly rates if you are unemployed. Your premium is based on the number of members on the medical aid and the plan that you opt for. However, many medical aids in South Africa now offer a protection cover which will pay your medical aid premiums for 3 to 6 months should you lose your job. This costs only a few rands a month and may not be available through a company medical aid. You should speak to your medical aid, especially open medical aids, about these options. Those few months with no medical aid premiums while you find a job and get yourself back on your feet can make a difference between having cover or being at the mercy of the public health system.

Medical Aid Premiums After Retrenchment

If your company was paying part of the cost of your medical aid, you need to be prepared for a higher premium once you are retrenched. Medical aid subsidies no longer apply once the retrenchment takes effect and you should speak to your medical aid about the full cost of the plan. It may be wise to consider reducing your cover by switching to a cheaper plan. This will keep you covered for emergency medical services until you find a new job and can return to a higher plan with comprehensive benefits.

Remember that if you have no medical aid cover for more than 90 days and if you are over 35 years of age, you will pay a late joiner’s fee if you sign up for medical aid cover at a later stage. It is better to stay covered on a cheaper plan than to give up your medical aid altogether. Non-payment of the premiums will lead to a suspension (Refer to Medical Aid Suspended) and your medical bills will not be covered.

It may also be wise to speak to your medical aid and explain your circumstances. If you have been a member of the scheme for a long period of time, your medical aid may be able to give you a one month reprieve from the premiums if you can prove that you have been retrenched. Alternatively you should ask your medical aid about discounted rates if you settle 6 to 12 months of premiums upfront from your savings or retrenchment payout.