The Employer’s Guide to Medical Aids

medical aid insurance employersAs an employer, you may choose to subsidise employees medical aid contributions.

As a business owner, you can integrate the total cost of benefits, such as medical aid, pension fund contributions, and a travel allowance, into a structured cost-to-company (CTC) remuneration package. Alternatively, you can pay a portion of your employees’ medical aid contributions directly to a medical aid scheme.

An advantage of the CTC alternative is that any above-inflation increases to medical aid contributions are borne by the employee and not the company.

Open or restricted medical aid schemes?

There are two broad categories of medical aid schemes in South Africa – open schemes and schemes that are closed, or restricted.

Closed medical aid schemes may be specific to companies – like in the case of the BMW Employees Medical Aid Society – or industries, as in the case of Bankmed, The Building and Construction Industry Medical Aid Fund and the Fishing Industry Medical Scheme.

Average contribution increases are typically lower for closed medical schemes than for open schemes.

What to look for in a medical aid for employees

Dealing with a single medical aid provider when subsidising employees’ medical aid tends to cut down on red tape and simplify the payment process.

When choosing a medical aid for employees, it’s a good idea to focus on the key financial indices that point to the ability of the provider to pay claims.

Independent global credit ratings, cash reserves, solvency ratios, average age of beneficiaries and the pensioner ratio are all vital metrics that indicate that financial health of a medical aid supplier.

Quick and easy medical aid schemes comparison

At IFC, we’ve generated user-friendly snapshots of the leading open medical aid schemes in South Africa. These provide relevant financial indicators, as well as details of the special benefits and different plans offered by each scheme.

Our medical aid comparison tool is a quick and efficient way to compare similar plans so you can identify the best possible option at the best price.