Late Joiner Penalties
It is a “fine” by way of additional contributions, imposed on persons joining a medical scheme when they are 35 years of age or older and was not a member of one or more medical schemes before 01 April 2001, without a break in membership exceeding three consecutive months since 01 April 2001.
Penalties may be imposed on the late joiner according to a prescribed formula in the Regulations that determines a maximum penalty according to the applicant’s penalty band. The formula takes pervious creditable coverage with other medical schemes into consideration.
Late joiner penalties are imposed indefinitely and do not expire after a certain period and the purpose is to place the late joiner and the other members who have been contributing towards a medical scheme from a young age on the same level as they receive the same benefits.
✅ Discover the 4 Best Medical Aids with No Late Joiner Penalty in South Africa
Penalty bands (number of years of no cover after age 35)
| Maximum penalty
| ||
1 – 4 years | 0.05 x monthly contribution | ||
5 – 14 years | 0.25 x monthly contribution | ||
15 – 24 years | 0.50 x monthly contribution | ||
25+ years | 0.75 x monthly contribution |
Frequently Asked Questions
What is a late joiner penalty in medical schemes?
A late joiner penalty is a surcharge imposed on individuals who join a medical scheme after a specified age or after a certain period of not being a member of any medical scheme.
When does the late joiner penalty apply?
The late joiner penalty applies when an individual joins a medical scheme at an older age or after a specified period of not having medical scheme coverage.
What is a waiting period?
When enrolling in a medical aid plan, it is essential to understand the different waiting periods that may apply.This is a three-month waiting period during which members cannot claim any benefits, except for Prescribed Minimum Benefits (PMBs). This period is applicable to all new members, irrespective of their health status or previous medical aid membership.
How is the late joiner penalty calculated?
The calculation of the late joiner penalty depends on various factors, including the age at which the individual joins the scheme, the number of years without medical scheme membership, and the specific rules set by the medical scheme.
What is the purpose of the late joiner penalty?
The purpose of the late joiner penalty is to incentivize individuals to join medical schemes earlier and maintain continuous membership. It helps ensure a balanced risk pool and prevent adverse selection.
Can the late joiner penalty affect the cost of medical scheme premiums?
Yes, the late joiner penalty can impact the cost of medical scheme premiums. The penalty is usually added to the standard premium, resulting in a higher monthly premium for individuals who are subject to the penalty.
✅ READ more about Best Hospital Plans in South Africa
