Most South Africans would like access to private healthcare but it can be costly without medical aid cover. However, medical aid can also be quite expensive. It is therefore not surprising that a medical aid subsidy can be an attractive feature of any remuneration package when considering a job. Employers are aware of the importance and allure of offering its employees access to medical aid, albeit only in part with a subsidy.

Find cover that suits your budget

Before you sign that employment offer, it is important to understand the repercussions of the medical aid option that you are being given by your employment. There are many facets to consider and while it definitely can be a benefit, there are some ‘catches’ that every employee needs to consider. It is important to speak to an open medical scheme or an independent medical aid broker for proper clarification on these matters.

Can Employers Force Employees to Join Medical Aid?

Many employees are under the impression that they are forced to join the medical aid that the employer chooses. This is untrue in many instances. If an employer includes terms in the employment contract that medical aid membership is mandatory, then an employee is required to do so. Many employers do not include this requirement in the employment contract unless an employee may be exposed to circumstances where they may fall ill.

Furthermore if an employer does require medical aid membership, then the employer should provide some subsidy for the medical aid premiums. While employers can agree to only subsidise premiums for a specific medical aid (usually a restricted scheme), the employee is not forced to join this medical scheme. Employees can opt to join another open medical scheme but cannot expect their employer to subsidise premiums in these cases.

Subsidy, Fringe Benefit and Cost to Company (CTC)

In the past, employers used to pay a portion of the employee’s medical aid premium. This could vary from company to company with some paying as little as 20% of employees’ premiums to others paying as much as 60%. However, new tax laws impact on these subsidies. Now the employer’s contribution to the employee’s monthly contribution is seen as a fringe benefit. Therefore the employee has to bear that tax for this extra benefit.

Another issue that employees have to face, especially new employees, is that employers add the cost of medical aid to the final remuneration package. Therefore the take home salary can be much lower than expected. In these instances the employer does not pay any extra subsidy to the medical aid premiums beyond what is declared in the salary package. Employees have to understand how this will affect their tax and take home pay.

Related policies like medical gap cover are usually not covered by employers. This type of cover is not mandatory but with the high cost of private healthcare and many doctors charging above medical rates, medical gap cover has become almost essential for South Africans.

Employees Already Covered on Medical Aid

Many employees already have cover, either on their parents’ or spouse’s medical aid. This can be a complicated matter. Firstly, any dependant over the age of 18 who is employed does not qualify to be on their parent’s medical aid. By doing so, you may be committing fraud by not fully declaring your work status to your parent’s medical aid. However, the same does not apply to being on a spouse’s medical aid.

Both adult members, the main member (your spouse) and adult dependant (you), can be on one medical aid plan despite being employed by different employers. Unless your employer insists that you are on your own medical aid as per the employment agreement, you are not required to leave your spouse’s medical aid cover. Conversely, you cann’t expect any subsidy or compensation from your employer for being on your spouse’s medical aid.

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