Learn about the unfunded claims rule change

On benefit options with a Medical Savings Account (MSA), a set yearly amount is made available in the MSA at the beginning of each year and the member repays this amount to the Scheme via a portion of the monthly contributions over the 12 months of that year.

If a member joins the Scheme part way through the year, only a portion of the yearly amount, according to the number of months left in the year when the member joins, is made available immediately.

The set MSA amount made available on 1 January is based on the size of the member’s family on 1 January every year.

When a dependant is withdrawn during the year, and there is an overspend on available MSA which the member won’t be able to fund through the MSA contributions for the rest of the year, that overspend will be a debt due to the Scheme.

With such debt comes the risk that the Scheme is unable to collect the owed amounts. On 22 February 2017, the Board of Trustees approved a new paragraph for inclusion in Annexure F of the Scheme’s Rules:

“11. Where the Scheme pays a claim or claims, which, in the aggregate, exceed the aggregate amount of those portions of the member’s contributions (including any interest paid to the member) which have been allocated to the member’s MSA, as at the date of such payment by the Scheme, the Scheme shall at its option, be entitled:

11.1 to debit the unfunded claim amount to the member’s MSA; or

11.2 to recover the unfunded claim amount from the member.”

This change, which comes into effect on 1 January 2018, provides the Scheme with a mechanism to mitigate and manage the risks associated with the ever-increasing uncollected member debt.