Focus on underwriting 2025

 

Below is information about the underwriting in 2025.

The underwriters of Momentum Medical Scheme play a crucial role in evaluating the medical risks associated with new applicants. They assess the potential impact that these individuals may have on the Scheme and utilize various risk management tools as mandated by legislation to ensure that the Scheme remains sustainable over the long term. These risk management tools include implementing late joiner penalties, establishing three-month general waiting periods, and applying twelve-month exclusions for pre-existing conditions. Each of these measures is designed to mitigate risks and promote a balanced pool of members within the Scheme.

What is a late joiner penalty? A late joiner penalty is a financial charge that can be levied against individuals who have not previously been enrolled in a South African medical scheme. This penalty specifically targets individuals over the age of 35 and is calculated on a sliding scale that considers both age and the duration of time without prior medical coverage. However, this penalty is waived for members who have maintained continuous coverage in a medical scheme since April 1, 2001. The rationale behind implementing late joiner penalties is to protect medical schemes from adverse selection, which occurs when individuals delay joining until they are older or experiencing health issues. By discouraging this behavior, the penalties aim to foster a healthier, more stable membership base.

What is a three-month general waiting period? In certain circumstances, and from a risk management perspective, Momentum Medical Scheme may impose a three-month general waiting period on new beneficiaries. This means that individuals must wait three months from the start date of their membership before they are eligible to claim any benefits from the Scheme. However, beneficiaries who qualify for the Prescribed Minimum Benefits (PMBs) can still receive treatment at a State facility during this waiting period, provided that the condition falls under the PMB coverage. A comprehensive list of the Prescribed Minimum Benefits is available on the medical schemes website (for further details, please visit https://www.medicalschemes.co.za/).

What is a twelve-month pre-existing condition specific exclusion? In certain situations, members may be subject to a twelve-month specific condition exclusion. This means that for the first twelve months following the commencement of their membership, Momentum Medical Scheme will not cover any treatment costs related to the specified condition and any associated disorders. If members qualify for the Prescribed Minimum Benefits, they can still access treatment at a State facility, as long as the condition is included in the PMB coverage. A detailed list of these benefits is also accessible on medicalschemes.com (for more information, please see https://www.medicalschemes.co.za/).

Focus on Underwriting: Individuals

The legislation provides a framework for categorizing different types of applicants based on their prior medical scheme coverage and any changes in employment status.

Type One: This category includes applicants who have never had medical scheme coverage or those who have experienced a break in their membership of more than ninety days after resigning from their previous scheme. For these individuals, Momentum Medical Scheme may impose a three-month general waiting period, a twelve-month condition-specific waiting period for each member, and a late joiner penalty. It is important to note that Type One members do not qualify for the Prescribed Minimum Benefits.

Type Two: Applicants falling into this category have had less than two years of continuous medical coverage and have applied to join Momentum Medical Scheme within ninety days of leaving their previous medical scheme. For Type Two applicants, the Scheme may choose not to impose the three-month general waiting period, but a twelve-month condition-specific waiting period may apply for any conditions that arose within the last twelve months. Additionally, any remaining condition-specific or general waiting periods from their previous medical scheme may also be enforced, along with the possibility of a late joiner penalty. Unlike Type One members, Type Two members do qualify for the Prescribed Minimum Benefits.

Type Three: This group consists of applicants who have maintained two or more years of continuous coverage and have applied to join Momentum Medical Scheme within ninety days after leaving their previous scheme. For these individuals, the Scheme may impose a three-month general waiting period but will not enforce a twelve-month condition-specific waiting period. A late joiner penalty may still be applicable. Importantly, Type Three members do qualify for the Prescribed Minimum Benefits.

Type Four: This category includes individuals transitioning from a restricted or closed medical scheme, who are no longer eligible to remain on that scheme, and who have applied to join Momentum Medical Scheme within ninety days of their previous scheme's termination. For Type Four applicants, the Scheme will not impose a three-month general waiting period but may enforce any remaining condition-specific or general waiting periods from the previous medical scheme, along with the potential for a late joiner penalty. Type Four members also qualify for the Prescribed Minimum Benefits.

Focus on Underwriting: Groups

Small groups: Momentum Medical Scheme defines small groups as those that are compulsory or composed of a defined compulsory group, with membership ranging from 2 to 9 principal members. To consider the acceptance of a small group, we require several pieces of information, including a fully completed group quote template (which can be obtained from your Business Consultant, Practice Consultant, or Specialist Health Marketing Adviser) that includes demographic details such as the number of principal members, their dates of birth, and the number of adult and child dependants. Additionally, a completed Momentum Medical Scheme company application form is necessary, along with individual application forms for all employees that answer all medical questions thoroughly.

Once we have received the demographic, industry, and health profile of the group, we will analyze this information. Based on our assessment, the group may be accepted with or without late joiner penalties, declined, or deferred pending further information. It is important to note that groups are subject to an annual review, and Momentum Medical Scheme reserves the right to renegotiate the original terms of acceptance.

Large groups: Momentum Medical Scheme recognizes large groups as those consisting of 10 or more principal members. To qualify, the group must meet acceptable demographic criteria, which include having an average age of less than 45 years, a family chronic ratio of less than 25%, and a direct claims ratio of less than 75%. To assess the acceptance of large groups, we require the completion of the group quote template, which includes demographic information, dates of birth, and details regarding adult and child dependants, as well as chronic utilization.

This information must be submitted alongside additional documentation, such as the correct employer name and company registration number, a clear definition of the compulsory group if it does not apply to all employees (excluding those on their spouse's medical scheme), confirmation that Momentum Medical Scheme will be compulsory for future employees, and a breakdown of the industry along with job functions expressed as a percentage (for example, 80% administration, 10% manual laborers, and 10% management).

Upon receipt of all required information, the group will either be accepted without late joiner penalties, declined, or individual decisions may be proposed. The outcome will be communicated in writing to the employer through their financial adviser. It is also important to note that large groups must submit a certain percentage of application forms before their membership can be activated, which varies based on the size of the group. For instance, for groups with 10-100 principal members, 75% of forms must be submitted, while for groups with 101-500 members, the requirement is 70%, and for those with over 500 members, it is 65%.

In all cases, the remaining membership forms must be submitted by the next billing date unless prior arrangements have been made regarding a specific take-on period, which cannot exceed three months.

Concession Business groups: The Medical Schemes Act permits employer groups to switch between medical schemes without incurring any waiting periods on January 1st of each year, a process referred to as Concession Business. However, certain criteria must be met for all applications under this provision. Firstly, a legitimate employer-employee relationship must exist, and groups must have a minimum of two employees. Self-employed individuals are not eligible for this underwriting concession. Billing and contribution collection must always be conducted in advance, utilizing debit orders exclusively. Additionally, it is essential that all staff on the existing medical scheme be compelled to transfer their membership to Momentum Medical Scheme. Employees who are not beneficiaries of an existing medical scheme will be subject to full underwriting, and late joiner penalties may be applied where applicable. Furthermore, any existing waiting periods or exclusions will also be enforced.

To meet the requirements for Concession Business, the following information must be submitted by September 30th: a letter of intent to join Momentum Medical Scheme, a fully completed company application form, the previous three months’ payroll (if the employer cannot provide proof of payroll, alternative documentation such as submissions made to SARS, proof of UIF payments per employee, or a letter from the auditor confirming the list of employees will be accepted), and demographic information submitted electronically in an Excel spreadsheet containing details such as full names, dates of birth, gender of principal members, dependants, chronic conditions, and income.

If all criteria are satisfied and the documentation is submitted on time, terms of acceptance will be provided. These terms must be signed by the employer and returned along with the necessary documentation, including fully completed individual member application forms and certificates of existing medical scheme membership for each employee. Groups that meet the regular underwriting criteria for large groups should be submitted through the standard new business channels.

Late Joiner Penalties: The application of late joiner penalties by Momentum Medical Scheme follows specific guidelines. No late joiner penalty will be imposed on members who are younger than 35 years of age. Additionally, members who have been enrolled in a medical scheme since before April 1, 2001, and who have had a break in membership of no more than three consecutive months immediately before joining Momentum Medical Scheme will not face any penalties. In all other cases, the following formula, as stipulated by legislation, will be used: A = B - (35 + C), where B represents the member's age and C represents the number of years of creditable coverage (time spent on a South African registered medical scheme).

For example, if a prospective member is 85 years old and has had 61 years of creditable coverage, the calculation would be as follows: A = 85 - (35 + 61), resulting in A = 85 - 96, which equals -11. Therefore, the late joiner penalty would be zero since any negative number defaults to zero for this calculation.

The maximum penalty as a percentage of the risk contribution per member is tiered as follows: for 1-4 years of late joining, the penalty is 5%; for 5-14 years, it is 25%; for 15-24 years, it is 50%; and for 25 years or more, it reaches 75%. It is important to note that international or foreign coverage, as well as hospital cash plans or stated benefit insurance policies, are not recognized by Momentum Medical Scheme as creditable coverage for determining member type or for calculating late joiner penalties.

When applying late joiner penalties at the inception of membership, they are enforced for individual memberships where applicable. For small groups, penalties may be applied based on the group decision. In large groups, no late joiner penalties will be imposed, except for adult dependants (excluding spouses) who join after the principal member's commencement date or who were not dependants of the principal member on the previous medical scheme.

For additions to existing groups, late joiner penalties will apply as per the group decision for small groups, while for large groups, they are generally not applicable, except for adult dependants as described above.

It is also worth noting that no commission will be paid on the late joiner component of the contribution.

Focus on Underwriting: Dependants

Spouse or partner dependants: According to the rules of Momentum Medical Scheme, a spouse is defined as the individual to whom the member is legally married, whether under civil law or customary law. A partner, on the other hand, refers to someone with whom the member has a serious, committed relationship that resembles marriage, based on objective criteria of mutual dependency and shared living arrangements, regardless of the gender of either person.

For Super Group employees, there is a provision for adding spouses as dependants. An active member who is an employee of a Super Group has a 30-day window from the date of their marriage to add their spouse without undergoing underwriting. To do this, a copy of the marriage certificate must be included with the Addition of Dependants application form.

Child dependants: The rules of Momentum Medical Scheme define a "child dependant" as the unmarried child of a member, which includes stepchildren, adopted children, or foster children, who is under the age of 21 and is not financially independent. This definition also extends to full-time students under the age of 21. To register a child dependant, relevant documentation such as an adoption order or official proof of foster care must be provided. It is important to note that Momentum Medical Scheme does not cover second-generation children, meaning the children of a child dependant are not eligible for coverage.

Addition of newborn child dependants: Newborns must be registered, and a newborn registration form must be completed within 30 days of birth to be accepted without undergoing underwriting.

Adopted children: If an application is submitted for an adopted child under the age of 18 to join Momentum Medical Scheme within 30 days of the legal adoption date, the child will be added to the adoptive parents' membership without the need for underwriting. Proof of legal adoption is required in this case. Conversely, if the application for an adopted child under 18 is received more than 30 days after the legal adoption, the child will be added to the adoptive parents' membership with full underwriting. Proof of legal adoption must still be provided. If the adoption process is ongoing, confirmation such as a letter from a social worker or court documentation indicating that the adoption is in progress, along with the date the child was placed in the care of the adoptive parents, must be submitted. In this instance, the child will be accepted without underwriting, provided the application is made within 30 days of the placement.

The member must include the child in their membership from the first of the month in which the child was placed in the adoptive parents' care. Unlike the case of a newborn child, the contribution for the first month is not waived.

If an application for an adopted child is submitted more than 30 days after the adoption or more than 30 days after the child was placed in the care of the adoptive parents, full underwriting will apply, and proof of legal adoption will be required.

For adopted children over the age of 18, an application to join the Scheme will also require full underwriting, provided that proof of legal adoption is submitted showing that the adoption occurred while the child was still under 18.

Child dependant as a principal member: It is possible for parents, legal guardians, or other third parties to apply for a child to be designated as the principal member on their own Momentum Medical Scheme membership. In such cases, the contribution payable will reflect the principal member rate rather than the child rate.

Adult dependants: According to the rules of Momentum Medical Scheme, an "adult dependant" is defined as an individual who does not meet the criteria for child dependant status, is 21 years or older, and is financially dependent on the principal member. This can include individuals related to the principal member by blood, marriage, or adoption, as well as divorced spouses or second spouses recognized under indigenous African law or religious tenets.

It is important to note that applicants must satisfy at least one of the criteria mentioned above to be granted adult dependant status. In terms of underwriting for adult dependants, Momentum Medical Scheme does not impose a maximum entry age limit. However, adult dependants must meet the qualifying criteria at the time of application and during the annual review period. Individual underwriting applies to adult dependants where it is applicable to the group as a whole. When group underwriting is in effect, adult dependants are assessed as part of the group, and any adult dependants included in the quote will be subject to individual underwriting if they are not currently covered by the existing medical scheme. For these members, a fully completed Individual Application for Membership form or Certificates of Membership from the current scheme will be required.

When an adult dependant is added to an active contract under a group, individual underwriting will apply to that addition.

Addition of adult dependants: Any adult dependants added after the commencement date of a member (or who were not dependants on the member's previous medical scheme) will be subject to individual underwriting and must submit a fully completed Individual Application for Membership form.

Below is information about changes to membership

Continuation members: Members of Momentum Medical Scheme may continue their membership without needing to provide additional medical evidence under certain circumstances, maintaining the same terms and conditions that applied during the principal member's tenure. These circumstances include retirement, where members may remain on the Scheme subject to their employment agreement's conditions; the death of the principal member, which allows the spouse and dependants to retain their membership; divorce, where the spouse may continue membership in accordance with the divorce agreement; and for dependants, a child who becomes self-supporting may become a principal member on their own membership. Moreover, members withdrawing from employment are eligible to remain on the Scheme.

It is essential to understand that for continuation to apply, there must be no break in membership. If a member has been part of a large group for less than three months and chooses to stay on Momentum Medical Scheme after retirement or resignation, full underwriting will be required.

Reinstatements: In the event of a lapse in membership due to non-payment of contributions, Momentum Medical Scheme allows a one-month grace period before the membership is officially lapsed. If a member requests reinstatement after their membership has lapsed, full underwriting will be necessary. For voluntary withdrawals, if members leave and later seek re-admission to the Scheme, full underwriting will apply, irrespective of the group size.

Change of benefit option: Members have the flexibility to upgrade or downgrade their benefit option within 30 days from the date their membership is activated. After this initial period, changes to options can only be made at the beginning of each year, and no new underwriting restrictions will be imposed during these changes.