UPDATE | Post Office asks govt to help with medical aid arrears, council mulls exemption | Fin24

The Post Office has approached government for funding to help pay its medical aid arrears.

• The SA Post Office says it will partly rely on its own revenue to make payments to allow medical scheme MEDiPOS to retain required liquidity levels and continue providing cover to its employees.
• But the Post Office has also approached government for funding and is still waiting for the outcome of that request.
• The settlement agreement that allows contributions to MEDiPOS is subject to approval from the Council for Medical Schemes.

The South African Post Office will rely partly on its revenue to cover the arrears in employee contributions to medical aid scheme provider MEDiPOS, but will also seek assistance from national government.

Meanwhile, the Council for Medical Schemes said it would consider an application by the trustees of MEDiPOS to exempt it from medical aid scheme regulations in order to give it the breathing room needed to continue covering contributing Post Office employees.

This comes after the Post Office, MEDiPOS and unions reached a settlement agreement which was converted into an order by the Johannesburg Labour Court last week, after the medical scheme warned that contributing employees ran the risk of losing their benefits in October.

Sunday Times initially reported that the medical aid benefits of up to 50 000 Post Office employees were in jeopardy as the Post Office owed MEDiPOS R602 million in unpaid member contributions.

Following this, trade union Solidarity went to the Labour Court to have it compel the Post Office to pay full contributions. 

The settlement agreement, according to a statement by Solidarity, allowed MEDiPOS to continue covering employees for the month of October. The statement also said the settlement agreement was subject to approval from the Council for Medical Schemes.

Post Office spokesperson Johan Kruger told Fin24 that the Post Office will use its own revenue to make payments that will allow MEDiPOS to retain the required liquidity levels to enable it to continue covering its contributing members.

“The Post Office’s revenue allows it to partly service the MEDiPOS fees. In terms of the settlement, the payments will continue. This will allow MEDiPOS to retain the required liquidity levels. The Post Office appreciates the constructive spirit owing to which the settlement was reached,” said Kruger.

Kruger confirmed that the Post Office has also approached government for funding and is still waiting for the outcome of that request.

Registrar and CEO of the Council for Medical Schemes (CMS) Sipho Kabane said in a statement that MEDiPOS initially filed an exemption in terms of section 8(h), from compliance with section 26 (7) and scheme rule 11.6, to
allow deferment of contributions payment.

Kabane said, the CMS granted the exemption for a six-month period from 11
December 2020 to 11 June 2021 on condition that trustees of MEDiPOS did not suspend
membership during this period, and that the scheme’s reserves was maintained at 25% consistent with statute.

Kabane said on the day before the expiry of the exemption, the trustees of MEDiPOS filed an application requesting CMS to extend
the exemption until February 2022, which was declined.

“The CMS reviewed the application, including an independent actuarial evaluation of the scheme’s current and
projected solvency ratio, and resolved to decline the extension of the exemption, on the basis that SAPO’s accumulated
debt and its persistent failure to honour contributions due had placed the scheme in a precarious financial position, with rapid erosion of reserves, as the scheme continued to pay healthcare claims, despite not receiving contribution
income,” said Kabane.

Kabane said without this exemption, the scheme is in direct contravention of its scheme rules and the requirements of the MSA,
and this could result in the suspension of benefits due to outstanding contributions.

He added that , the CMS noted the recent court settlement between the trade union Solidarity, the Post Office and Medipos in the
Labour Court in Johannesburg.

“We are currently reviewing the settlement which has been made an order of court and the CMS decision will be
communicated in due course. In the meantime, employees of SAPO remain protected, and will continue to receive
their healthcare benefits, in line with the court order,” concluded Dr Kabane.

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