2. Notice Period: Discovery Health requires a full calendar month notice period for resignations.
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1 28 October 2010 Dear Employee Resignation from company recommended medical scheme We acknowledge receipt of your request to resign from one of Vodacom s recommended medical schemes (Discovery Health, Genesis or Bonitas). This was detailed in the policy change Memorandum by the Chief Human Resources Officer, dated 08 June We wish to advise you of the following process steps and precautions that need to be noted in your request for termination of membership: 1. Termination Form: You will be required to complete a formal scheme termination form before either of the funds can terminate your membership. Please contact Phindile Mntambo (HR Admin & Support) for assistance. 2. Notice Period: Discovery Health requires a full calendar month notice period for resignations. Genesis Medical Scheme requires a full calendar month notice period for resignations. Bonitas Medical Scheme requires a full calendar month notice period for resignations.
2 3. Underwriting: Under circumstances of voluntary medical scheme cover, members are able to select against medical schemes by only taking out cover when required. As a result the medical scheme legislation has two provisions to aid them in managing the adverse selection by members. You need to be fully aware of these circumstances, should you intend on applying for membership to another medical scheme or if you intend to rejoin one of the company recommended schemes in future. These provisions are: 3.1 Waiting Periods Medical schemes may impose a three-month general waiting period on all benefits (i.e. no benefits payable), and/or a 12-month exclusion for any pre-existing sickness conditions in various circumstances. Any scheme you may apply to has the right to impose the applicable waiting period or exclusion to you and your family and this will also be applied by Discovery Health, Genesis Medical Scheme or Bonitas Medical Fund if you seek to rejoin either of them at some point in the future. 3.2 Late-joiner Penalties Late-joiner penalties of up to 75% of the risk contributions can be imposed if a member chooses not to join at a younger age and only joins a scheme later in life. From 1 April 2001, medical schemes are entitled to apply a "late-joiner" penalty to new members over the age of 30 who have not been a member of a medical scheme for a total of five years or longer. The penalty takes the form of a percentage increase in the member's contributions. The maximum penalty imposed depends on the amount of time the member has not belonged to a registered medical fund as indicated below: 5 to 9-years 1.05 x contributions (5% increase) 10 to 19-years 1.25 x contributions (25% increase) 20 to 29-years 1.50 x contributions (50% increase) 30-years x contributions (75% increase) The new medical scheme will require a "Certificate of Membership" from an applicant s previous medical scheme as proof of membership. If a certificate cannot be provided
3 before membership is activated, the member will be billed for the "late-joiner" penalty and refunded that portion of the contribution once the scheme is in receipt of the certificate. 4. Member Queries If you elect to join a medical scheme other than one of Vodacom s recommended schemes, you will need to deal directly with that medical scheme on any queries you might have with regard to membership, medical accounts, plan selection, or annual plan review, etc. As the costs of medical care continue to escalate, and as pressure on the state facilities refuses to subside, we urge all employees to take out medical scheme cover, be it with the company recommended schemes or other schemes, and in doing so, we also urge you to remain cognizant of the risks and benefits of individual versus group cover. Kind regards, Rewards and Benefits
4 OPTING OUT OF PARTICIPATING IN COMPANY RECOMMENDED MEDICAL AID FUNDS I (Full name), Employee number: hereby confirm that I have been informed of the company s policy regarding voluntary participation in the company recommended medical aid funds (refer to Memo by Chief Human Resources Officer dated 8 June 2007), and having been informed, elect not to apply for membership of those funds. In this regard, I fully understand and accept that: 1. Should I apply for membership of an alternate fund, I will be responsible for all and any arrangements in respect of the application process, payment of contributions, changes to my membership status, obtaining tax certificates and filing tax returns in respect of contributions. I understand that I will only qualify for the deduction of tax allowances in my tax return if I contribute to a medical fund duly registered in terms of the Medical Schemes Act. 2. As an applicant to an alternate scheme, I may be subjected to underwriting conditions that may be imposed by that scheme which may include any combination of a general waiting period, exclusions for pre-existing conditions and late joiner penalties. 3. As a member of an alternate fund, the company will not apply the tax concessions on my contributions to that fund. 4. As a member of an alternate fund, I will not receive advice from the Broker servicing the company recommended funds, unless such advice is sought in respect of the company recommended schemes, however I can appoint a Broker on an individual basis. 5. As with members of the company recommended funds, if I elect not to apply for any medical fund membership, or if I elect to apply for membership of an alternate fund but
5 exhaust my benefits, I will not be eligible for financial hardship assistance either for myself or my dependants, should it be required regarding medical care. 6. Should I apply for membership to the company recommended schemes at any time after my first-month (Genesis) or third-month (Discovery Health) of full-time employment, I may be subjected to individual underwriting. Signature: Witness: Date: Signature:
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