Many employees do not consider the impact on their medical aid cover by changing jobs but this is an important consideration from the moment you hand in your notice of resignation. Much depends on whether you are a member of a open (public) medical aid or closed (restricted scheme). Without proper planning you may find that you do not have any medical aid cover for a month or two during the transition period and this can significantly impact on your personal budget should medical costs arise. Furthermore, even a short period without cover may mean that the new scheme will then impose certain waiting periods and exclusion criteria that can affect you for a few months or even in the first year of cover.
Transferring Your Medical Aid Cover With A New Job
It is not mandatory for an employer to provide medical aid benefits to an employee. Many employers include it as part of the remuneration package and contribute to the monthly cost as an incentive. Changing a job does not necessarily mean that you can transfer your medical aid cover and hold your new employer liable for the costs. First you have to confirm that your new employer will cover part of the contributions. If not, then you will bear the cost of the full monthly contribution on your own.
Secondly, you need to verify whether your change in job affects your membership on your current medical aid. Some medical aids are considered closed or restricted schemes and only allow employees of certain companies or sectors of industry to become members. If you change in job means that you are moving out of the industry altogether or that the new employer is not recognised by the scheme, then your medical aid membership will be terminated.
This may be less of a concern if you are the member of an open or public medical aid. Here any South African can remain a member of the medical aid irrespective of the employer or the sector of industry that they work in. In this instance your medical aid membership is not terminated and does not change in any way. The only difference may be in the employer’s contribution which can differ from one company to another.
Change in Employer’s Contributions
A change in the employer’s contributions to your monthly medical aid premium can work in your advantage or against you. If your new employer is prepared to pay a higher portion of the monthly contribution then you benefit. On the other hand if the new employer pays a smaller portion of the contributions than your previous employer, you will then have to pay the additional amount from your own pocket. This needs to be budgeted for by you, the member. Sometimes your new employer may not offer any medical aid benefits and you will be held liable for the entire cost.
Another factor to consider is whether your new employer will only recognise certain schemes. Many companies prefer to do business with certain medical aid schemes. Therefore the company medical aid may be different from the scheme you currently belong to. The new employer may still agree to contribute to your current medical aid cover but the portion may not be the same as is the case if you joined the preferred medical aid provider. Once again the difference will have to come out of your pocker.
No Medical Aid Cover With Change in Job
The situation sometimes arises where an employee finds himself/herself without any medical aid cover. Once you serve your notice of resignation, steps are already underway by your previous employer to cancel their contributions to your medical aid. You are usually notified in this regard and may then have to bear the entire cost of the monthly contributions until your new employer starts contributing accordingly.
If you are under the impression that your new medical aid will take effect immediately, you may be surprised to find that your new employer is still ironing out details even once you have quit your previous medical aid. It is best to communicate with your employer or HR department and the medical aid and iron out where you stand with regards to cover during this transition period. If necessary, you may consider taking out private cover for the interim.
Failure to switch to a new medical aid should your new employer not continue with contributions to your current scheme may mean that you have no cover for a few months. Upon joining the new medical aid you may find that the scheme then imposes waiting periods or exclusion criteria that can adversely affect you. These waiting periods and exclusion criteria usually fall away if you switch membership provided that this is carefully coordinated between the old and new medical aid without any transition period of no cover.
Despite the involvement of your employer or a broker, the onus is on you as the medical aid member to verify that this transition will be a smooth process. It is important to remember that being covered by two medical aids at the same time is considered unlawful in South Africa. Rather clarify with your old medical aid as to when your membership will terminate and ensure that the new scheme is clear that your membership will take effect immediately upon termination.