Carte Blanche on MNET had a slot last Sunday on Prescribed Minimum Benefits which might have caused some confusion.
Just to get more clarity on the PMBs as introduced into the Medical Schemes Act
· PMB’s was introduced into the Medical Schemes Act to ensure that members of medical schemes would not run out of benefits for certain conditions and find themselves forced to go to state hospitals for treatment.
· These PMBs cover a wide range of close to 300 conditions, such as meningitis, various cancers, menopausal management, cardiac treatment and many others including medical emergencies.
· Terminology
In order to understand the impact of the legislation changes, a clear understanding of the terminology is required:
Designated service provider (DSP)
This refers to health care provider/s that have been "selected by the scheme to provide its members diagnosis, treatment and care in respect of one or more of the PMB conditions".
Emergency medical condition
This is a medical condition which is of sudden and unexpected onset that requires immediate medical or surgical treatment. Failure to provide this treatment would result in impairment of bodily functions, serious dysfunction of a bodily organ or part, or would place the person's life in serious jeopardy.
Prescribed Minimum Benefits (PMB's)
PMB's are minimum benefits which by law must be provided to all medical scheme members and include the provision of diagnosis, treatment and care costs for:
· any emergency medical condition
· a range of conditions as specified in Annexure A of the Regulations to the Medical Schemes Act (No 131 of 1998), subject to limitations specified in Annexure A. Included in this list of conditions is the list of chronic conditions
So this means that a long list of conditions identified as Prescribed Minimum Benefits was issued. The list is in the form of Diagnosis and Treatment Pairs (DTPs). A DTP links a specific diagnosis to a treatment and therefore broadly indicates how each of the approximately 270 PMB conditions should be treated. The treatment and care of PMB conditions should be based on healthcare that has proven to work best, taking affordability into consideration. Should there be a disagreement about the treatment of a specific case, the standards (also called practice and protocols) in force in the public sector will be applied.
The treatment and care of some of the conditions included in the DTP may include chronic medicine, e.g. HIV-infection and menopausal management. In these cases, the public sector protocols will also apply to the chronic medication.
Thursday, October 7, 2010
Tuesday, September 28, 2010
PMB's And DSP's go hand in hand
When trying to obtain treatment for a prescribed minimum benefit (PMB) condition, you may come across terms like "designated service provider" and "co- payment". This monthwe concentrate on what these mean for you.
What is a designated service provider?
A designated service provoder or DSP is a healthcare provider (doctor, pharmacist, hospital, etc) who is appointed by your medical scheme to treat or care for prescribed benefit (PMB) conditions of their members.
State healthcare facilities can be DSP's too but before they can be listed as such in the rules of your medical scheme, your scheme must make sure that you and it's other beneficiaries can reach these facilities with reasonable ease and that the required treatment, medication, and care are both available and accessible.
What is a co- payment?
A co- payment is the amount of money or portion of the account that your scheme may request you to fund your own pocket. This could be either a percentage of the fee or the difference between the tariff of your scheme's chosen DSP and the amount charged by the provider (non- DSP) you went to. The co- payment amount must be specified in the scheme rules.
When can the scheme charge a co- payment?
You can use a non- DSP if you want to (voluntarily) but there may be times when you will have no choice but to use a non- DSP. If you choose to voluntarily use a non- DSP for your PMB condition, you may have to pay a protion of the bill as a co- payment.
What is involuntary use of a non- DSP?
If circumstances force you to obtain a service from a non- DSP (i.e. involuntarily) and it's a PMB condition, your scheme must pay for the costs of the treatment, diagnosis, and care in full. These are the reasons why you may need to obtain treatment from a DSP- involuntarily
Perscribed Mininum Benefits (PMB's) are a set of defined benefits to ensure that all medical schemes have access to certain minimum health services, regardless of the benefit option they have selected. Medical Schemes have to cover the costs related to the diagnosis, treatment and care of:
How does treatment at DSP's work?
Your scheme can insist that you go to a DSP, this is not entirely correct as the DSP should be used for the diagnosis as well as soon as your PMB condition is diagnosed, in which case they cover the costs from the start. When your condition is identified as a PMB after diagnosis, your scheme must pay for the tests and treatment in full retrospectively. Treatment for a PMB condition at a DSP is covered in full by the medical scheme.
What is a designated service provider?
A designated service provoder or DSP is a healthcare provider (doctor, pharmacist, hospital, etc) who is appointed by your medical scheme to treat or care for prescribed benefit (PMB) conditions of their members.
State healthcare facilities can be DSP's too but before they can be listed as such in the rules of your medical scheme, your scheme must make sure that you and it's other beneficiaries can reach these facilities with reasonable ease and that the required treatment, medication, and care are both available and accessible.
What is a co- payment?
A co- payment is the amount of money or portion of the account that your scheme may request you to fund your own pocket. This could be either a percentage of the fee or the difference between the tariff of your scheme's chosen DSP and the amount charged by the provider (non- DSP) you went to. The co- payment amount must be specified in the scheme rules.
When can the scheme charge a co- payment?
You can use a non- DSP if you want to (voluntarily) but there may be times when you will have no choice but to use a non- DSP. If you choose to voluntarily use a non- DSP for your PMB condition, you may have to pay a protion of the bill as a co- payment.
What is involuntary use of a non- DSP?
If circumstances force you to obtain a service from a non- DSP (i.e. involuntarily) and it's a PMB condition, your scheme must pay for the costs of the treatment, diagnosis, and care in full. These are the reasons why you may need to obtain treatment from a DSP- involuntarily
- the required service or treatment is not really available from your scheme's DSP or it will be provided with unreasonable delay;
- an emergency occurs under circumstances or at a location that prevents you from obtaining PMB treatment from a DSP; or
- there is no DSP within a reasonable proximity to your ordinary place of business or personal residence
Perscribed Mininum Benefits (PMB's) are a set of defined benefits to ensure that all medical schemes have access to certain minimum health services, regardless of the benefit option they have selected. Medical Schemes have to cover the costs related to the diagnosis, treatment and care of:
- Any emergency condition (http://www.medicalschemes.com/medical_schemes_pmb/emergency_medical_conditions.com)
- A limited set of 270 medical conditions (http://www.medicalschemes.com/medical_schemes_pmb/conditions_covered.htm);
- and 25 chronic conditions
- (http://www.medicalschemes.com/medical_schemes_pmb/chronic_disease_list.htm)
How does treatment at DSP's work?
Your scheme can insist that you go to a DSP, this is not entirely correct as the DSP should be used for the diagnosis as well as soon as your PMB condition is diagnosed, in which case they cover the costs from the start. When your condition is identified as a PMB after diagnosis, your scheme must pay for the tests and treatment in full retrospectively. Treatment for a PMB condition at a DSP is covered in full by the medical scheme.
Monday, September 6, 2010
Health Warning
Be very cautious before cancelling an existing risk policy or allowing a policy to lapse by stopping your premiums. You may not be offered the same terms you had on you had on your original policy, particularly if your risk status has changed – for example, after a deterioration in health.
If your risk status has changed dramatically – for example, if you have contracted a terminal disease – you may be refused cover altogether.
Risk assurance has become very competitive, with the result that it has also become more complex as life assurance companies try to differentiate on product design.
The increased competition has also seen some life assurance companies luring top sales staff from other companies with perverse incentives, which could see these advisors acting in their own interest and that of their new employers rather than yours.
You need to be cautious when a financial advisor suggests that you switch insurance companies – the move may or may not be in your best interest.
Be particularly wary of products that have lower premiums now but allow for significant or vague increases in the future. You may find the future premium increases become prohibitive but you may not be able to change to another company because of the deterioration of your health.
If your risk status has changed dramatically – for example, if you have contracted a terminal disease – you may be refused cover altogether.
Risk assurance has become very competitive, with the result that it has also become more complex as life assurance companies try to differentiate on product design.
The increased competition has also seen some life assurance companies luring top sales staff from other companies with perverse incentives, which could see these advisors acting in their own interest and that of their new employers rather than yours.
You need to be cautious when a financial advisor suggests that you switch insurance companies – the move may or may not be in your best interest.
Be particularly wary of products that have lower premiums now but allow for significant or vague increases in the future. You may find the future premium increases become prohibitive but you may not be able to change to another company because of the deterioration of your health.
Thursday, August 19, 2010
Financial Planning for the Modern Woman- Part 2
Liberty Legal Focus
There is an increasing worldwide trend for partners in a relationship not to get married, but to simply live together or "co- habit" has its own consequences as far as taxes and financial implications are concerned.
Tax implications of a "common law union"
In South African law there is no such thing as "common law spouses" even though the term is brandished aroud so often that factually it may seem to exist. In terms of our tax legislation, and specifically the Taxation Laws Amendment Act 5 of 2001, the definition of spouse was extended to include , among others, "persons who are in a same- sex or heterosexual union with which the Commissioner is satisfied is intended to be permanent". The impact of this legislation is that people who fall within this definition are for purposes of estate duty, capital gains tax and donations tax treated as spouses- the section 4(q) estate duty deduction, CGT roll over's and tax free donations will be allowed between these parties. This is obviously very useful when it comes to personal financial planning and in particular estate planning. While the legislation does state that this kind of union, unless there is proof to the contrary, will be treated as excluding community of property, it does not go very far in terms of spelling ot the parties' rights and obligations in terms of their proprietary interests.
What risks should parties who co- habit instead of marrying be aware of?
A couple of pertinent questions may answer this:
What happens to the assets of one of the parties on death in the absence of a valid will bequeathing those assets to the survivor? The Intestate Succession Act 81 of 1987 specifically deals only with parties married in terms of the Matrimonial Property Act 88 of 1984 and as such precludes co- habiting life partners. The constitutional court has recently made several rulings to the effect that same sex partners and partners married in terms of Muslim or Hindu tenets should also be protected in terms of the Intestate Succession Act, but no rulings has been made regarding heterosexual life partners. Therefore, the survivor would have no legal claim against the estate of the deceased.
It is thus critical that life partners make certain that they have current and up to date wills in place reflecting their intentions and wishes.
Maintenance of Surviving Spouses Act
Likewise, the Maintenance of Surviving Spouses Act, 27 of 1990 only caters for "spouses" who are married in terms of the Matrimonial Property Act. The life partner who may have been co - habiting with the deceased before his/ her death and been completely dependant on this person for maintenance would have no claim whatsoever against his/ her estate. (Note that, in terms of the Pension Funds Act 24 of 1956, the person would qualify as a factual dependant and would be able to lodge a claim against those benefits, if any).
A financial needs analysis must be conducted in order to ascertain what the financial implications of the death of one of the life partners would be on the survivor and if there is a need, this need must be catered for.
What happens if the life partners decide to go their seperate ways and split up?
In 2008 the Domestic Partnership Bill was published which sought to provide some clarity and direction on these matters. Basically it distinguished between registered domestic partnerships and unregistered domestic partnerships. In terms of the Bill, parties to a registered domestic partnership would automatically be entitled to a claim in terms of both the Intestate Succession Act and the Maintenance of Surviving Spouses Act, while those in an unregistered domestic partnership would need to go to court for the relief sought. This Bill also clearly stipulated that such relationships would operate as if they were out of community of property, and so would automatically include the accrual system. On termination of the relationship for whatever reason, the parties would get to share in the growth of each other's estates from inception of the partnership. This Bill has not been taken any further and as such cannot be relied upon by parties cohabiting to protect their rights or interests.
How then do life partners protect themselves and regulate their affairs, other than by having a valid will? What happens practically when the relationship ends?
Universal partnership
One of the parties could allege that what is called a universal partnership exists between them. Basically, what is being said is that in terms of the law of contract, an agreement has been entered into between the parties in which they are to share their assets equally. All the terms necessary to prove a valid contract of partnership would need to be proved:
It is not necessarily easy to prove that a universal partnership exists, for example you will need to show under the "benefit for both parties" that both parties were actually better off together, than they were seperately. Invariably the parties will have to consult attorneys and may even have to go to court. This costs a lot of money, and those people who lack the financial resources to be able to afford legal fees may end up with nothing at all.
The Alternative: A Domestic Partnership Agreement
All parties co- habiting should take the same view as people in a business partnership with each other. They should enter into a legal agreement to regulate their proprietary affairs so that should the partnership terminate, there will be binding guidelines in place to determine how the property will be split up.
The best time to enter into this agreement is when both parties are on good terms with each other and have a long term view on the relationship. It is too late if you wait until one of the parties whishes to go his or her own way. A domestic partnership agreement deals with life partnerships and is similar to entering into an antenuptial contract. It will detail each party's rights and obligations, for example:
Careful thought and consideration needs to be given when doing financial planning for life partners, especially when it comes to protecting their wealth in the event of death or termination of that partnership.
There is an increasing worldwide trend for partners in a relationship not to get married, but to simply live together or "co- habit" has its own consequences as far as taxes and financial implications are concerned.
Tax implications of a "common law union"
In South African law there is no such thing as "common law spouses" even though the term is brandished aroud so often that factually it may seem to exist. In terms of our tax legislation, and specifically the Taxation Laws Amendment Act 5 of 2001, the definition of spouse was extended to include , among others, "persons who are in a same- sex or heterosexual union with which the Commissioner is satisfied is intended to be permanent". The impact of this legislation is that people who fall within this definition are for purposes of estate duty, capital gains tax and donations tax treated as spouses- the section 4(q) estate duty deduction, CGT roll over's and tax free donations will be allowed between these parties. This is obviously very useful when it comes to personal financial planning and in particular estate planning. While the legislation does state that this kind of union, unless there is proof to the contrary, will be treated as excluding community of property, it does not go very far in terms of spelling ot the parties' rights and obligations in terms of their proprietary interests.
What risks should parties who co- habit instead of marrying be aware of?
A couple of pertinent questions may answer this:
- If the relationship should end because the parties fall out, what will happen to the property acquired during the course of the relationship?
- Does provision for retirement include both partners or will both be reliant on one partners pension/ retirement fund?
- Will either parties need or be entitled to maintenance should the relationship terminate?
- What is the intention of the parties if either dies, in terms of the other inheriting?
- Is there sufficient provision for the surviving partner and dependants?
What happens to the assets of one of the parties on death in the absence of a valid will bequeathing those assets to the survivor? The Intestate Succession Act 81 of 1987 specifically deals only with parties married in terms of the Matrimonial Property Act 88 of 1984 and as such precludes co- habiting life partners. The constitutional court has recently made several rulings to the effect that same sex partners and partners married in terms of Muslim or Hindu tenets should also be protected in terms of the Intestate Succession Act, but no rulings has been made regarding heterosexual life partners. Therefore, the survivor would have no legal claim against the estate of the deceased.
It is thus critical that life partners make certain that they have current and up to date wills in place reflecting their intentions and wishes.
Maintenance of Surviving Spouses Act
Likewise, the Maintenance of Surviving Spouses Act, 27 of 1990 only caters for "spouses" who are married in terms of the Matrimonial Property Act. The life partner who may have been co - habiting with the deceased before his/ her death and been completely dependant on this person for maintenance would have no claim whatsoever against his/ her estate. (Note that, in terms of the Pension Funds Act 24 of 1956, the person would qualify as a factual dependant and would be able to lodge a claim against those benefits, if any).
A financial needs analysis must be conducted in order to ascertain what the financial implications of the death of one of the life partners would be on the survivor and if there is a need, this need must be catered for.
What happens if the life partners decide to go their seperate ways and split up?
In 2008 the Domestic Partnership Bill was published which sought to provide some clarity and direction on these matters. Basically it distinguished between registered domestic partnerships and unregistered domestic partnerships. In terms of the Bill, parties to a registered domestic partnership would automatically be entitled to a claim in terms of both the Intestate Succession Act and the Maintenance of Surviving Spouses Act, while those in an unregistered domestic partnership would need to go to court for the relief sought. This Bill also clearly stipulated that such relationships would operate as if they were out of community of property, and so would automatically include the accrual system. On termination of the relationship for whatever reason, the parties would get to share in the growth of each other's estates from inception of the partnership. This Bill has not been taken any further and as such cannot be relied upon by parties cohabiting to protect their rights or interests.
How then do life partners protect themselves and regulate their affairs, other than by having a valid will? What happens practically when the relationship ends?
Universal partnership
One of the parties could allege that what is called a universal partnership exists between them. Basically, what is being said is that in terms of the law of contract, an agreement has been entered into between the parties in which they are to share their assets equally. All the terms necessary to prove a valid contract of partnership would need to be proved:
- That the partnership was entered into for the benefit of both parties;
- That the purpose of the partnership was to generate a profit;
- That both parties made a contribution to the partnership- financial or otherwise, and
- That the contract is legitimate.
It is not necessarily easy to prove that a universal partnership exists, for example you will need to show under the "benefit for both parties" that both parties were actually better off together, than they were seperately. Invariably the parties will have to consult attorneys and may even have to go to court. This costs a lot of money, and those people who lack the financial resources to be able to afford legal fees may end up with nothing at all.
The Alternative: A Domestic Partnership Agreement
All parties co- habiting should take the same view as people in a business partnership with each other. They should enter into a legal agreement to regulate their proprietary affairs so that should the partnership terminate, there will be binding guidelines in place to determine how the property will be split up.
The best time to enter into this agreement is when both parties are on good terms with each other and have a long term view on the relationship. It is too late if you wait until one of the parties whishes to go his or her own way. A domestic partnership agreement deals with life partnerships and is similar to entering into an antenuptial contract. It will detail each party's rights and obligations, for example:
- Their respective financial obligations to the joint home;
- Their rights and obligations towards each other;
- Rights and obligations regarding jointly owned property, including the division of jointly owned property.
Careful thought and consideration needs to be given when doing financial planning for life partners, especially when it comes to protecting their wealth in the event of death or termination of that partnership.
Monday, August 16, 2010
Financial Planning for the Modern Woman
Michelle Human, Legal Marketing Specialist
Can the modern woman really have it all? Today, women have more oppertunities, choices and challenges than ever before. Women need to take control of their financial planning to make sure that they own their lives, especially in the event of a life- changing situation. Here are some things to consider when it comes to taking charge of your financial freedom.
Look after yourself first
A woman needs to have a financial plan that caters for her own needs.
If she has children or is thinking about starting a family, her retirement plan must take into account a possible break in employment, even if only for a short time, while she is on maternity leave.
If it takes a dual income to run a family now, then a dual income will also be required at retirement to maintain the standard of living.
Financial protection in times of crisis
According to the CANSA Association, 1 in 29 women is diagnosed with breast cancer, every year. The effects of such a diagnosis can be devastating, both emotionally and financially.
Making sure that you have cover in place that will pay out in an event of such a diagnosis will at least give you the peace of mind that your financial wellbeing is taken care of. Comprehensive critical illness cover will make sure that funds are available to protect your family and their lifestyle. Consider the impact that this type of disease could have on your lifestyle:
The last thing any blushing bride wants to consider is the fact that her marriage may come to an abrupt end, either as a result of divorce or death. Making sure that you understand the law relating to your marriage could save you heartache in years to come.
The three marital regimes provided for in terms of the Matrimonial Property Act:
When a woman starts a family she may choose to leave formal employment to be a full- time mom or work reduced hours with a flexible schedule. Here are some things to consider when you have children:
Generally, women live approximately seven years longer than men. A women of 65 will need approximately 15% more than a man of the same age to provide the same pesnsion for the rest of her life, so women really need to put careful thought into their retirement plans.
Leaving a legacy
All too often women underestimate the need for a valid will as part of a comprehensive financial plan. It is not as simple as leaving all your assets to your spouse or significant other.
A will gives you the oppertunity to provide a guardian for your child in the event of both parents passing away. You may wish to provide for your children using a testamentary trust. This allows you to choose the trustees who will manage the funds for your children and give certain instructions regarding distribution of income and capital. Consider that your surviving spouse may remarry or have more children. Without a will, there are no guarentees that your children will receive the legacy you intended for them.
Going through the process of drafting your will also allows you to consider the impact of the estate duties, income tax and expenses that can easily erode the inheritance you thought you were leaving.
Life cover is an affordable way of ensuring that cash is readily available when your dependants need it most.
Can the modern woman really have it all? Today, women have more oppertunities, choices and challenges than ever before. Women need to take control of their financial planning to make sure that they own their lives, especially in the event of a life- changing situation. Here are some things to consider when it comes to taking charge of your financial freedom.
Look after yourself first
A woman needs to have a financial plan that caters for her own needs.
If she has children or is thinking about starting a family, her retirement plan must take into account a possible break in employment, even if only for a short time, while she is on maternity leave.
If it takes a dual income to run a family now, then a dual income will also be required at retirement to maintain the standard of living.
Financial protection in times of crisis
According to the CANSA Association, 1 in 29 women is diagnosed with breast cancer, every year. The effects of such a diagnosis can be devastating, both emotionally and financially.
Making sure that you have cover in place that will pay out in an event of such a diagnosis will at least give you the peace of mind that your financial wellbeing is taken care of. Comprehensive critical illness cover will make sure that funds are available to protect your family and their lifestyle. Consider the impact that this type of disease could have on your lifestyle:
- Who would take care of your children? Whould you need an au pair to fetch them from school and other activities, supervise homework and dinnertime?
- Would you need someone to take care of household chores or drive you to treatments and doctor's appointments?
- Make sure that you can illiminate all other worries and focus on getting the best treatment possible.
The last thing any blushing bride wants to consider is the fact that her marriage may come to an abrupt end, either as a result of divorce or death. Making sure that you understand the law relating to your marriage could save you heartache in years to come.
The three marital regimes provided for in terms of the Matrimonial Property Act:
- Community of Property- the parties to the marriage share all profits and losses and are seen to have one undivided estate. Thus everything is shared equally.
- Ante- nuptial- contract (ANC)- this automatically includes the accrual system and is a community of profit, but not a community of loss, which comes into effect when the marriage ends. This is probably the most popular marriage regime of modern times. Assets required before the marriage may be exluded, but any growth in assets acquired during the marriage is shared equally when the marriage comes to an end.
- Ante- nuptial contract excuding accrual- the accrual system is expressly excluded and the parties have completely seperate estates. This is a marital regime often used where parties have already acquired significant wealth prior to their marriage.
When a woman starts a family she may choose to leave formal employment to be a full- time mom or work reduced hours with a flexible schedule. Here are some things to consider when you have children:
- Are your existing retirement benefits transferred into a Preservation Fund or Retirement Annuity to create a nest egg for the future?
- Are you accessing this amount now to reduce your costs and make your decision to stay at home more viable?
- Does the reduced income in the household allow you to continue with some form of retirement savings?
Generally, women live approximately seven years longer than men. A women of 65 will need approximately 15% more than a man of the same age to provide the same pesnsion for the rest of her life, so women really need to put careful thought into their retirement plans.
Leaving a legacy
All too often women underestimate the need for a valid will as part of a comprehensive financial plan. It is not as simple as leaving all your assets to your spouse or significant other.
A will gives you the oppertunity to provide a guardian for your child in the event of both parents passing away. You may wish to provide for your children using a testamentary trust. This allows you to choose the trustees who will manage the funds for your children and give certain instructions regarding distribution of income and capital. Consider that your surviving spouse may remarry or have more children. Without a will, there are no guarentees that your children will receive the legacy you intended for them.
Going through the process of drafting your will also allows you to consider the impact of the estate duties, income tax and expenses that can easily erode the inheritance you thought you were leaving.
Life cover is an affordable way of ensuring that cash is readily available when your dependants need it most.
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