Changes to your medical scheme subsidy and what this means to you

There have been some recent changes regarding your medical scheme subsidy. This article will help you understand what this means for you.

What has changed?

Parties to the South African Local Government Bargaining Council (SALGBC): SALGA, IMATU and SAMWU, recently signed a salary and wage agreement. It states:

“4. In respect of medical aid subsidy, the maximum employer contribution to an employee’s accredited medical scheme, as set out in clause 8.1.1 of the Collective Agreement, shall remain unchanged at R3 871.00.  However, the medical aid subsidy of employees receiving an employer contribution of less than R3 871.00 shall, in terms of clause 8.1.2. of the Collective Agreement, and with effect 1 July 2016, increase by 3%, provided that such increase shall not exceed the maximum employer contribution of R3 871.00.”

This means that the upper limit of the subsidy has been permanently capped at R3 871.00 a month. Some employers apply the subsidy upper limit to pensioners as well, which means this will affect you if you are a pensioner.

What does this mean for me as a member?

If you are already receiving the maximum subsidy, the employer’s portion of the total medical scheme contribution will decrease over time.  This means that in the future, as the medical scheme contributions increase, you will need to pay a bigger part of the total contribution from your own pocket.

How do I find out more?

Please note LA Health did not make the decision to change the subsidy; SALGBC decided this during the annual wage and salary negotiations.

If you have any questions about this decision and its effects, you can speak to your shop steward or contact SALGBC or SALGA directly.