Clearing medical aid fund issues
The Namibian Medical Aid Fund Administrators, Methealth Namibia Administrators, Medscheme Namibia, Prosperity Health Administrators and Paramount Healthcare Administrators issued a statement seeking to clarify pertinent issues pertaining to medical aid funds.
All private Medical Aid Funds in Namibia, with the exception of the Public Service Employees Medical Aid Scheme (PSEMAS), are regulated under the Medical Aid Funds Act, No 23 of 1995, and report directly to Namibian Financial Institutions Supervisory Authority (NAMFISA).
Medical Aid Funds are non-profit organisations which belong to the contributing members of that Fund and are managed by an independent Board of Trustees, consisting of employer groups and individuals, elected by the members to govern the Fund’s affairs. As such, a Medical Aid Fund cannot make “profits” or distribute dividends to any person or entity. Any underwriting surpluses remain in the Fund and are used to build reserves to protect members to ensure that the Fund has sufficient reserves to pay for medical aid costs when the need arises.
The reserves are also a NAMFISA requirement to ensure the future sustainability of the Fund and to cater for potential and escalating medical costs incurred by members.
The primary responsibilities of a Medical Aid Fund are to:
1. Ensure that all contracts of the Fund which include payment for any transfer of risk arrangements, managed healthcare, health professionals and administrators’ contracts, auditing and actuarial fees that are negotiated and concluded by elected the Board of Trustees;
2. Have the benefits and contributions of the Funds managed by independent actuaries and determined by the Board of Trustees and approved annually by NAMFISA;
3. Have the annual financial statements audited by independent auditors on an annual basis and submit it to NAMFISA for assessment, evaluation and scrutiny by the regulator;
4. Ensure that an annual general meeting is held for the Fund’s members where the annual financial statements, the auditor’s report findings and other topics covering members’ interests are discussed and clarified;
5. Use independent actuaries to assist in benefit design and improvements;
6. Ensure that contracts of the Funds are inspected and audited annually by the regulator (NAMFISA);
7. Submit quarterly financial management accounts to NAMFISA within 30 days of the last day of the specific quarter;
8. Appoint an independent Principal Officer who oversees the daily affairs of the Fund and the Principal Officer reports to the Board of Trustees;
9. Hold regular EXCO and trustee meetings during which the Fund’s affairs are discussed and the administrator must provide various reports to monitor the Fund’s performance according to set principles and guidelines. No employee of the Administrator may sit on the board of trustees;
10. Apply good corporate governance principles through professional accountants, legal advisers, HR practitioners and other professional bodies from the private industry;
11. To ensure that trustees have no direct and/or indirect relationship with the Administrators of the Fund. To this end, all trustees must submit an annual declaration of their private interest and others they serve to NAMFISA.
All Medical Aid Funds have two major categories of expenditure, namely healthcare expenditure which covers all aspects of treatment, and non-healthcare expenditure which consists of administrative and management costs. In 2012, the first accounted for 88.9% of all fund expenditures and the latter, for only 11.1%.