Medical Aid for Small Businesses

Most small businesses in South Africa don't have the benefit of belonging to sector-specific closed medical aid schemes. However, that doesn't mean that medical aid shouldn’t be part of SMEs' remuneration plans.

By subsidising medical aid contributions paid by their employees, owners of start-ups and small businesses can help protect their staff from potentially crippling medical costs. In turn, taking care of your staff can earn worker loyalty, improving productivity and boosting profits.

The benefits of medical aid in CTC

Many small businesses work on the cost to company (CTC) remuneration model. Benefits like the after-hours use of company cars, rental allowances and medical aid are integrated into a total package that, due to tax implications, is often more attractive to employees than a higher salary.

According to recent research, more than 80 percent of workers agree that health and wellness initiatives are vital to company loyalty. With medical aid as part of the package, working class South Africans have access to preventative wellness programmes and premium quality healthcare, provided by private doctors and hospitals.

Coupled with enhanced worker loyalty are practical business benefits of proper access to medical care, including lower absenteeism and higher worker output.

Dedicated medical aid for small businesses

Some South African schemes, such as Fedhealth, have tailored solutions for small businesses. The idea is to support entrepreneurs by providing affordable healthcare across the employee spectrum.

The value-for-money group options at Fedhealth start at around R800 per month for entry-level subscribers to medical aid.

How to choose a medical scheme for your SME

Apart from cost, there are other variables you should consider before you choose a medical aid provider for your small business. The first is solvency ratio – the amount of money the medical aid scheme has available to pay claims.

All schemes in South Africa are legally obliged to have a solvency ratio of at least 25%. Ensure you choose a scheme that meets or exceeds the legal requirement.

The medical aid provider's average beneficiary age and pensioner ratio are also important. Ideally, you want to join a scheme with a low pensioner ratio and comparatively young beneficiary base. With this kind of profile, the average number of claims is automatically lower, leaving surplus cash reserves for the following year.

In terms of global credit rating, solvency ratio and the average age and number of beneficiaries, these are among the best medical aid schemes for small businesses in South Africa:

Consult a medical broker

Choosing a medical aid scheme that will best meet the needs of your employees – without breaking the bank – can be a challenging task. Instead of relying on guesswork, we suggest you chat to one of our brokers, who specialise in providing objective advice about South African medical aid and medical insurance products, including medical aid for small businesses.

Contact us for more information or to discuss your needs.