Medical Schemes Amendment Bill and Occupational Diseases in Mines and Works Amendment Bill: briefing

Meeting report

SOCIAL SERVICES SELECT COMMITTEE
29 October 2002
MEDICAL SCHEMES AMENDMENT BILL AND OCCUPATIONAL DISEASES IN MINES AND WORKS AMENDMENT BILL: BRIEFING

Chairperson: Ms. L Jacobus

Documents Handed Out:
Medical Schemes Amendment Bill [B37B-2002]
Occupational Diseases in Mines and Works Amendment Bill [B39B-2002]
Department of Health briefing on Medical Schemes Amendment Bill 2002
Proposed Amendments to Medical Schemes Amendment Bill (Appendix)

SUMMARY
Department of health officials briefed the Committee on the Medical Schemes Amendment Bill of 2002. The discussion centered on the revised definition of the word "broker" in the Amendment Bill. The definition was expanded and includes provision of service or advice both in respect of admission of members to medical schemes and provision of ongoing services and advice to members. The principal Act only recognised services provided by brokers in respect of introduction or admission of members to medical schemes.

The Director General of the Department of Health, briefed the committee on Occupational Diseases in Mines and Works Amendment Bill.

MINUTES
Briefing by Mr. Thabo Rakoloti & Stephen Harrison
Medical Schemes Amendment Bill [B 37B-2002]
Ad Clause 1
Mr. Harrison explained that the new definition of broker was comprehensive and was aimed at avoiding numerous interpretations. The definition now encompassed the term "broker services".

Ad Clause 2
The purpose of this amendment was to incorporate the conduct of brokers during broker activity. Dealing with conduct requires regulation of broker activity especially in respect compensation of such brokers. In addition the Minister was empowered to determine the amount of compensation as expressed in the existing Medical Schemes Act. He also alluded to the fact that broker activity was currently not properly regulated.

Mr. Harrison stated that the power of the Minister of Health was no longer provided in terms of section 67 of the principal Act. Financial Advisory and Intermediary Services Bill [FAIS] now covered the code of conduct applied to brokers

Dr. Nel (NNP) referred to clause 1 and asked why the definition of broker had not been mentioned in the memorandum of the Bill. Mr Harrison replied that Subsection 7 of the principal Act was not mentioned precisely because clause 2 clearly stipulated that no person may act as broker unless the Medical Schemes Council had awarded the accreditation to practice as such.

For a detailed account of the proposed amendments and the briefing by Mr. Rakoloti please see the appendix.

Briefing by Mr.Ayanda Ntsaluba, Director General in Department of Health
Occupational Diseases in Mines and Works Amendment Bill [B 39B-2002]

Mr. A Ntsaluba indicated that the purpose of the amendment Bill was to enable the persons diagnosed with compensatable diseases medically examined within 24 months to receive compensation and be examined at the nearest medical facilities available.

Ad Clause 1
The purpose of this amendment was to extend the period of medical examination from six months to 24 months. Taking into account the slow progression of diseases like pneumoconiosis the extended period of 24 months was justifiable. Mr. Ntsaluba indicated that previously persons undergoing medical examination after they had left employment were given only six months to file their application for compensation. After broad consultation between organised labour and registrar of mines it was agreed that the period be extended to 24 months.

Ad Clause 2
The effect of this amendment was to enable the mine employer to compensate only reasonable costs incurred by the employee where such employee had been in the employment of the owner of mine. The employee concerned must furnish proof that costs incurred were legitimate and necessary for medical aid.

Furthermore the insertion of period 'not more than two years' was necessitated by the nature of the compensatable disease and the slow progression of such diseases.

Ad Clause 3
The effect of the provision was to ensure that the substantial portion of the contribution by the employer towards medical costs of his employee was fully beneficial to such employee not the broker. Mr. Ntsaluba pointed out that there had been flagrant abuse of the system of payment by intermediaries. Therefore the purpose was to ensure that the broker was not remunerated beyond 0,5% of the payout towards the employee.

The meeting was adjourned.

Appendix 1
PROPOSED AMENDMENTS
MEDICAL SCHEMES AMENDMENT BILL [B 37B - 2002]

CLAUSE 1
1. On page 2, from line 10, to omit paragraph (a) and to substitute:

(a) by the substitution for the definition of ''broker'' of the following definition:
'' 'broker' means a person whose business, or part thereof, entails providing broker services, but does not include—
(i) an employer or employer representative who provides service or advice exclusively to the employees of that employer;
(ii) a trade union or trade union representative who provides service or advice exclusively to members of that trade union; or
(iii) a person who provides service or advice exclusively for the purposes of performing his or her normal functions as a trustee, principal officer, employee or administrator of a
medical scheme,
unless a person referred to in subparagraph (i), (ii) or (iii) elects to be accredited as a broker, or actively markets or canvasses for membership of a medical scheme.''; and
(b) by the insertion, before the definition of ''business of a medical scheme'', of the following definition:
'' 'broker services' means—
(a) the provision of service or advice in respect of the introduction or admission of members to a medical scheme; or
(b) the ongoing provision of service or advice in respect of access to, or benefits or services offered by, a medical scheme;''.

CLAUSE 2
On page 2, from line 25, to omit paragraphs (a), (b) and (c) and to substitute:

(a) by the substitution for subsection (1) of the following subsection:
''(1) No person may act or offer to act as a broker unless the Council has granted accreditation to such a person on payment of such fees as may be prescribed.'';
(b) by the substitution for subsection (2) of the following subsection:
''(2) The Minister may prescribe the amount of the compensation which, the category of brokers to whom, the conditions upon which, and any other circumstances under which, a medical scheme may compensate any broker [in terms of subsection (1)].'';
(c) by the substitution for subsection (3) of the following subsection:
''(3) No [person] broker shall be compensated for providing broker services [relating to the introduction or admission of a member to a medical scheme in terms of subsection (1)] unless the Council has granted accreditation to such [a person on payment of such fees and on submission of such information as may be prescribed] broker in terms of subsection (1)''; and
(d) by the substitution for subsection (6) of the following subsection:
''(6) A broker may not be directly or indirectly compensated for providing broker services by any person other than—
(a) a medical scheme;
(b) a member or prospective member, or the employer of such member or prospective member, in respect of whom such broker services are provided; or
(c) a broker employing such broker.''.

LONG TITLE

1. On page 2, in the first line, to omit ''so as to broaden'' and to substitute ''in
relation to broadening''.

2. On page 2, from the first line, to omit '', in order to provide for'' and to
substitute ''and''.