The Council for Medical Schemes (CMS) has issued a statement on the judgment made against them by the Constitutional Court. The judgment follows a matter that was taken on appeal by Genesis Medical Scheme who argued that funds in a personal medical savings account (PMSA) may be treated as assets of a medical scheme.
This judgment has significant implications for members who have savings accounts as part of their medical scheme benefit option for the following reasons:
- The judgment means that members of medical schemes will NOT be entitled to earn interest on their money in their PMSA as it will now belong to the medical scheme once such funds are deposited into the scheme’s account.
- Should a medical scheme be declared insolvent – there will be no guaranteed protection of members’ funds from being accessed and attached by creditors in the event of the liquidation process of a medical scheme.
The CMS has stated that they will ensure that medical schemes affected by the judgment are continued to be protected, but that it is important for members of these medical schemes to be aware of the impact of the judgment on the funds in their personal medical savings accounts.
The CMS has also stated that it will continue to regulate the medical schemes industry in terms of the Medical Schemes Act and their duty remains to protect the interests of all members of medical schemes.