IMPORTANT CHOICE CONCERNING MEDICAL AID WITH EFFECT FROM 1 JANUARY 2013

Transcription

1 Company letterhead <Name> <Address> <Date> Dear <name> IMPORTANT CHOICE CONCERNING MEDICAL AID WITH EFFECT FROM 1 JANUARY INTRODUCTION As you know, membership of either the N Option Plus or the N Option Basic of the Naspers Medical Fund ( Nasmed ) is currently a condition of service for permanent employees of Media24 (unless they are a registered dependant on their spouse/life partner s registered medical scheme elsewhere). Membership is also available to employees who are members of Nasmed when they retire from Media24. Management believes that medical aid is an important benefit and would like to ensure that you, the employee/retiree, have a say in choosing the most appropriate medical scheme for the needs of Media24 staff and retirees. This letter provides important information that you will need about the choices available to you and the voting process that will be followed. 2. THE CURRENT POSITION Nasmed was established in the early 1940 s with the purpose of providing medical fund benefits to all salaried employees of the then Nasionale Pers Limited (Naspers). Nasmed was registered with the Council for Medical Schemes on 7 March 1972 (registration no. 1241) for the purpose of providing cost-effective benefit options to the employees and retirees of Naspers, and later Media24. In terms of the conditions of employment of Media24, qualifying employees and retirees have access to either the N Option Plus or N Option Basic of Nasmed. Nasmed, like all other registered medical schemes, is governed by the Council for Medical Schemes which was established with the introduction by the Medical Schemes Act 131 of

2 Nasmed s financial position has remained at acceptable levels throughout and costs and benefits are highly comparable with the open market. However, Nasmed is a closed membership medical scheme (not open to members of the public) and thus has a limited number of members. This means that only two options can be offered, which causes dissatisfaction amongst some members. In response to the complaints, Media24 s management agreed to investigate alternative medical schemes with a wider range of benefit options on offer. 3. ALTERNATIVES CONSIDERED The Council for Medical Schemes has specific requirements for any process which could lead to the closure of one medical scheme and the transfer of its members to another medical scheme. Media24 thus engaged independent medical scheme consultants, Alexander Forbes Health (Pty) Ltd. ( AF Health ) to assist us in identifying potential suitable alternative medical schemes. A sub-committee of the Media24 Exco was formed to review these alternatives. The results of the first round of the analysis identified four open medical schemes for engagement on a potential transfer of Media24 members. Further negotiations followed with the various medical schemes as well as the Council for Medical Schemes. The result was that the sub-committee identified Discovery Health Medical Scheme ( DHMS ) as the most suitable alternative for Media24 and its employees and retirees. This decision was based on various considerations including financial strength, available benefits, cost, number of options and administration capabilities and effectiveness. 4. WHAT HAPPENS NOW? A decision about whether to remain with Nasmed or to transfer to DHMS must be made by the current members of either the N Option Plus or the N Option Basic of Nasmed. All current and retired employees, who are principal members of the two benefit options on Nasmed as at 1 September 2012 will be given the opportunity to vote on a potential change of medical scheme. This voting process will have the following set criteria: More than 50% of all current N Option Plus or N Option Basic Nasmed members will be required to vote. Should more than 50% not vote, the transfer will be considered to have been rejected. 2

3 Should more than 50% of current members of the two options vote, then the decision to transfer will be based on the responses of 50% + 1 of current members that have voted i.e. the majority vote will determine the outcome. 5. EMPLOYER RESPONSIBILITY Media24 management will ensure that sufficient information is provided so that members can adequately assess the alternatives and thereby make an informed vote. The voting process will be concluded timeously so that a final decision can be made. The outcome of the vote will determine the membership of the selected medical scheme for the foreseeable future. AF Health has been engaged to present a series of information sessions around the country to make sure that you are fully informed of the voting options, receive independent and professional advice if required and assist with enabling you to exercise your right to vote by the deadline. 6. MEMBER RESPONSIBILITY: VOTING ON THE PROPOSED TRANSFER Members have a responsibility to express their views. Sufficient information will be provided in various formats including, electronic, hard copy, presentations and one-on-one assistance. You must read all communication carefully. Media24 would like to place you in the position to make an informed decision when you vote. Please see Annexure A for details of dates, times and venues of the countrywide information sessions. As the benefit year of all medical schemes begins on 1 January and ends 31 December; and contribution adjustments are made on 1 January each year by most open market schemes, the most suitable time to transfer from one medical scheme to another is 1 January. This ensures that members do not experience disruption and confusion with regard to benefits (e.g. there will be no pro-ration of benefits as would be the case when changing medical schemes during the year/after 1 January of any year). Regardless of whether you exercise your right to vote or not, you will be bound by the majority decision that takes effect on 1 January No variances will be allowed, regardless of personal circumstances or preferences. 3

4 7. GENERAL INFORMATION Current employees will be provided with all information electronically. Retirees will be provided with printed information. Information sessions will be scheduled nationally for both current employees and retiree members. Please try and attend these sessions. AF Health staff will be available to offer independent advice and assistance. Representatives from People Management will be also available at sessions. 7.1 A summary of the N Option Plus and Basic Options and DHMS Plans and Default Options A basic summary of the two medical schemes will be provided. However it is important to note that this will be a high-level summary and you should refer to the detailed brochures provided by them to confirm benefits and contributions. The medical schemes rules will always take precedence should there be any printed error or dispute in information provided. This is a complex topic, so we strongly encourage members to make use of the online tools and attend the information sessions. It is also important to note that due to the announcement of benefits and rates for 2013 (and any other year previously) only taking place in late September and into October, all information provided to you with this letter and during the information sessions will be based on 2012 information, and is subject to possible change when the medical schemes make their announcements, depending if and what they change with effect from 1 January However, a decision needs to be made before then so that a smooth transition can be made if required, and sufficient time is available to do detailed member information sessions and for DHMS, if chosen, to produce your new membership details and cards, prior to the December holidays. AF Health suggests that members assume a 10% increase guideline on the current DHMS contributions from 1 January 2013, and a similar amount on N Option Plus and N Option Basic 4

5 as from July 2013 (as you are aware both N Options delay their contribution adjustment date to align with your salary increase month), when doing their calculations. However, these figures may vary according to medical scheme and benefit option once actual rates for 2013 are announced. Regardless of selected medical scheme, further communication will follow when the medical schemes announce their 2013 benefits and contributions. In order to assist you in your selection, and offer some guidance, AF Health have mapped your current benefit option on Nasmed to the closest comparable benefit option on DHMS at. However, the DHMS range includes many more benefit options that may be more closely suited to your actual healthcare needs and we therefore suggest that you consider all options on offer from DHMS versus the N Options under Nasmed, in order to gain full insight and understanding of your choices. 7.2 When will the transfer take place, should it happen? If the decision (through majority member vote) is made to transfer to DHMS, then members will be transferred with effect from 1 January Members may be required to complete application forms and reapply for certain benefits, but this will be communicated in detail during October and November, should this option realise. Should the decision be to remain with Nasmed, membership will continue without any interruption into The only form you will be required to complete is if you decide to change from the one benefit option to the other (N Option Basic and N Option Plus). 8. MEMBER VOTING Every N Option Plus and N Option Basic member s vote is important. The only way to make yourself heard is to participate in the VOTING process either in favour of or against the transfer to DHMS. We rely on the willing and active participation of members to VOTE by no later than 28 September WHY IS IT IMPORTANT FOR MEMBERS TO VOTE? 5

6 Before the particular medical scheme can be approved by Media24, at least 50% of N Option Plus and N Option Basic members are required to participate in the voting process to indicate whether they vote in favour of OR against a change in medical schemes. If the majority of voters (at least 50% + 1 of the valid votes received) vote FOR the transfer to DHMS, the transfer will be implemented from 1 January If the majority of members (at least 50% + 1 of the valid votes received) vote AGAINST the transfer to DHMS, all employees and retirees will continue as members of one of the N Options under Nasmed. We will inform all members of the outcome of the voting process by 5 October HOW TO VOTE Current employee members a user-friendly electronic voting system has been designed and can be accessed here. Retiree members - Please complete the enclosed ballot paper and return it to us by using the free-post self-addressed envelope enclosed. Only principal members of the N Option Plus and the N Option Basic of Nasmed as at 1 September 2012 are entitled to vote. Employees who are dependants of their spouse s/partner s medical scheme will not be entitled to vote. Regardless of whether you vote online or by postal ballot, each member will only be entitled to one vote. 11. WE WILL LET YOU KNOW WHAT THE OUTCOME IS As soon as we have counted the votes and completed the auditing process, which will be conducted by PricewaterhouseCoopers (PwC), we will let you know the outcome of the voting process and inform you of further steps. 6

7 Every endeavour has been made to supply you with sufficient information so that you can make an informed vote, in the interests of yourself and your family. Please refer to Annexure A for full details on the countrywide information sessions and Annexure B for answers to frequently asked questions. Your attendance is important as these sessions will provide you with a complete overview of the alternatives and the importance of you voting. Please use the opportunity wisely as it will determine your future with regards to medical scheme membership whilst in our employ. Kind regards Shelagh Goodwin GM: People Management For further information, advice or assistance, please contact: Phone: Alexander Forbes Helpline during office hours (07:30 17:00) clientspecialist@aforbes.co.za 7

8 8 ANNEXURE A

9 ANNEXURE B IMPORTANT QUESTIONS AND ANSWERS Q: Why do I have to vote? A: Media24 considers itself to be a responsible employer that wherever possible, seeks to offer employees fair employee benefits. Media24 is therefore giving employees who are members of the N Option Plus and the N Option Basic of Nasmed the opportunity to determine the future medical scheme of choice within the company. Q: But I thought we are already with Discovery. Why the need for change? A: In fact Nasmed is administered by Discovery (Pty) Ltd, which is an administration company that effectively handles the back office administration of various medical schemes (e.g. processing of claims, handling of general enquiries relating to benefits and contributions, in terms of the specific medical scheme s Rules). However, Nasmed is substantially different in benefits and rates to the open market Discovery Health Medical Scheme (DHMS), also administered by Discovery (Pty) Ltd. The DHMS has some 19 benefit options available to their members, whilst Nasmed s two benefit options, the N Option Plus and the N Option Basic, are available to qualifying Media24 employees and retirees in terms of company policy. Q: What happens if I decide not to vote? A: Due to the criteria set out in the main letter, 50% of current Nasmed N Option Plus and N Option Basic members will be required to vote before the votes are tallied. If you do not vote, it will be assumed that you wish to remain with the current medical scheme, namely Nasmed. Furthermore, if you do not vote and as a result 50% of members do not 9

10 vote, Media24 will maintain the status quo, meaning that all members will remain members of Nasmed. Q: What happens to employees who are not currently members of Nasmed? Will they be able to join if the result of the current members votes effects a move to DHMS on 1 January 2013? A: If an employee is not part of Nasmed now, then that employee may be allowed to join DHMS, but may be subjected to waiting periods and underwriting. Members and their dependents who are currently members of Nasmed as at 1 September 2012 will not be subjected to any underwriting or waiting periods with the transfer on 1 January Q: Why do I have to belong to the company s approved medical scheme, rather than having freedom of choice to select any medical scheme available in the open market? A: Having a preferred medical scheme(s) allows the company to provide fair access to medical benefits for all its employees, ensuring that nobody is negatively affected by underwriting requirements that may apply in open schemes when joining as a private member. With a proposed transfer of this nature, the Council for Medical Schemes will only allow the transfer to go ahead if all existing members transfer to the new scheme together. Media24 regularly reviews its HR policies and takes any decision in the best interest of the majority of employees. It is common practice in South Africa for companies to select a preferred medical scheme for employees. Reasons for this include, underwriting, training, advice to employees, services to assist employees being available and governance. Employees do have the right to belong to their spouse or partner s registered medical scheme as a dependent but proof of this membership is required on a yearly basis. Q: Will I have to complete a new application form if to the majority vote is in favour of moving to DHMS? 10

11 A: Yes, DHMS is a completely separate medical scheme to Nasmed, with different benefits, contributions and entry criteria; thus all new members are required to complete a new application form. Q: What will happen with my dependants that are over 21? A: On Nasmed s N Option Plus and N Option Basic children can remain on Nasmed until the end of the month before they turn 26. However, from the age of 21 benefit limits that are specific to adults will be applied, where they are different to children example, they will have a larger Above Threshold Benefit limit and Self Payment Gap.. On DHMS, children can currently remain on the medical scheme after turning 21. However, from the age of 21 the member will pay the adult dependent contribution for the child and benefit limits that are specific to adults will be applied, where they are different to children. Q: When can I change benefit options as a member of DHMS and how does this compare with when I can change benefit options as a member of Nasmed? A: Like most medical schemes you are entitled to review your benefit options and change on the 1 st of January each year whether a member of DHMS or if you want to choose between N Option Plus and N Option Basic. In certain exceptional circumstances changes may be allowed during the year, but this will depend on the situation and will be subject to approval by the medical scheme and Media24. Q: What will happen to my current Medical Savings Account (MSA) if the majority vote is to move to DHMS? A: Any accumulated MSA credit remains your money. By law the savings will be required to be transferred to DHMS should we change and you choose a benefit option that has a medical savings account. Should you move to a benefit option that does not have a savings account, then the accumulated savings in Nasmed will be paid to you. However, due to the current medical scheme (Nasmed) having to honour claims for up to 4 months after service date, the closing balance of any MSA accumulated in Nasmed will only be transferred to DHMS or paid to you (whichever is applicable) in May of You will not 11

12 be able to draw on this money for claims and services received prior to transfer/payment of the MSA funds. However, your new savings allocation for 2013 on DHMS will be available immediately and is available up front, as usual with medical scheme benefit options that have MSA benefits. Q: Who can I contact for more information or support? A: For more information and assistance, you can: Phone Alexander Forbes Helpline during office hours (07:30 17:00) - clientspecialist@aforbes.co.za with your enquiry Log onto: Intranet: XXX Nasmed website: Discovery website: Please note that neither Nasmed nor DHMS staff can assist with advice on your selection. They can only clarify questions related to their own specific medical scheme benefits and contributions. Please do not request advice from any party at either scheme, as it is illegal for them to give you advice. Q: What will my company post retirement subsidy be if the result of the vote is that I transfer to DHMS on 1 January 2013? A: Certain Retirees are entitled to a Post Retirement subsidy based on their original Conditions of Employment. The subsidy policy where applicable at the time of the changeover will be as agreed upon between the employer and employee. A separate communication in this regard will be sent to qualifying retirees in due course. Q: How does my salary and family size affect my current contributions on Nasmed and how could this change if the majority vote is in favour of moving to DHMS? 12

13 A: The Nasmed N Option Plus and N Option Basic contributions are based on family size and total monthly pensionable salary, and members only pay up to a maximum of 4 dependants (be they adults or children or a combination of both). In the case of Retirees, contributions are currently determined according to family size and the last total pensionable salary in the month prior to retirement. Other than the KeyCare option the DHMS various benefit options contributions are based on family size only and charged up to a maximum of 3 children. The adult rate is charged for children over 21. However, the KeyCare option uses total family size and total annual income (not pensionable income) to determine contributions. Q: Should I vote in favour of a transfer to DHMS and the result of the final vote be in favour of this transfer, will I be subject to underwriting (waiting periods or exclusions)? A: No. DHMS has agreed to accept all current Nasmed N Option Plus and N Option Basic members without underwriting so there will be no waiting periods and exclusions with the transfer on 1 January However, members may need to re-apply for certain benefits (e.g. chronic medication benefits). Should you have any concerns in this regard please refer to the DHMS Chronic Illness Benefit document that is made available with the various communications. Q: If the majority vote is in favour of the transfer to DHMS, what will happen with my current Vitality membership? A: Your current Vitality membership will be transferred and linked to your new membership number. 13