NAMFISA issues unfair practice declaration against medical aid funds
The Namibia Financial Institutions Supervisory Authority (Namfisa) has issued a declaration of undesirable practice pertaining to contribution discounts, loadings and differentiated treatment of individual members and employer group members of medical aid funds.
The objective of the declaration is to address and eliminate the unjust and inequitable practice which prejudices some of the members of the Funds.
Namfisa noted that the granting of discounts and differential contribution rates to individual members, group members and different sized group members, must be eliminated by 31 December 2023.
According to Namfisa, a recent assessment shows that medical aid funds grant discounts to retain and attract the membership of employer groups to the disadvantage of members that are not part of groups.
The authority said their assessment shows that two members of the same age and of the same health profile are currently subjected to different contribution rates, only because of their affiliation to a particular group.
The authority further declared that the loading of contribution rates of individual members, group members and different sized group members, must be eliminated by 1 January 2021 while the calculation of an individual’s contribution rate based on the age of the oldest beneficiary and designating the said beneficiary as the principal member, must be eliminated by 1 January 2021.
Further, the determining of any other form of contribution rate that ultimately results in a direct or indirect discount, must be eliminated by 31 December 2023.
“Although the abolishment of discounts might have a short term adverse impact on some members, it will ultimately result in a fairer treatment of all members in the long run,” Namfisa said.