You must appoint your healthcare broker

Only you, the consumer, may appoint a healthcare broker to act on your behalf in dealing with a medical scheme, the Council for Medical Schemes says. If either your scheme or your employer appoints a broker for you, you can terminate the appointment by notifying your scheme, and then you may appoint your own broker.

The scheme must stop paying fees to the broker immediately it receives your notice to terminate the broker’s services.

In response to several enquiries, the council issued a statement saying: “When a member has been admitted to a scheme without the assistance of a broker, there is no basis in law or otherwise for any person or entity (including an employer, trade union or medical scheme) to appoint brokers for their employees or members, or for brokers so appointed to claim from the medical scheme concerned to be compensated, without having been appointed by the employees or the members themselves. No person or entity is in a position to assume the role of an agent representing the member in appointing a broker in relation to the medical scheme thereafter.”

Your employer may appoint a broker, but the broker must obtain your agreement before he or she can act for you or sign you up as a scheme member. That broker is your adviser until you “unappoint” him or her by notifying the scheme.

If you join a scheme without a broker and your employer subsequently appoints one, the broker must have you sign a broker note before he or she can act on your behalf. You have the right to refuse to sign the broker note, which means the medical scheme may not pay that broker for advising you.

Medical schemes cannot prevent you from applying to join a scheme if you do not use the services of a broker. And your employer or medical scheme, or anyone else, cannot overturn your appointment of a broker.

The council’s comments are in line with a circular it issued in 2010 that stated: “When a member has been admitted to a scheme without the assistance of a broker, no other person or entity is in a position to assume the role of agent representing the member in appointing a broker thereafter. Failure to comply with this provision undermines the law of agency principle, which is enshrined in the Financial Advisory and Intermediary Services (FAIS) Act, as well as the Medical Schemes Act.”

A healthcare broker may introduce you to a scheme and help you apply to join it. He or she may also provide ongoing advice about the scheme’s benefits and help you with your claims.

Healthcare brokers must be accredited financial services providers and must comply with the code of conduct under the FAIS Act, enforced by the Financial Services Board. They must also be accredited brokers with the Council for Medical Schemes.

Brokers are paid by your scheme, not by you, and their fees are governed by regulations under the Medical Schemes Act. The fees are three percent of your contributions, up to R75 a month, plus VAT.

A scheme may not pay a broker more than the regulated amount, or compensate him or her indirectly.

Although you don’t have to have a broker to belong to a medical scheme, the council recommends that you use one. “The public cannot be expected to have expert knowledge on medical scheme matters, and sometimes the variety of products available and the number of benefit options may not be easily understood,” Danie Kolver, the council’s general manager of accreditation, says.