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Council for Medical Schemes Publishes Demarcation Exemption Framework

The Council for Medical Schemes (CMS) issued Circular 19 of 2017 on 15 March 2017 in respect of the Demarcation Exemption Framework, including the Guideline: Framework for Exemption of Providers of Indemnity Products that conducts the Business of a Medical Scheme from provisions of the Medical Schemes Act (MSA) 131 of 1998.

The guideline stipulates that an application for exemption may only be granted by the CMS on the completion of the following two-stage process:

An applicant is required to submit basic information before 31 March 2017. The CMS may grant an exemption to providers of indemnity products, who conduct the “business of a medical scheme”. This exemption is on condition that the applicant complies with the second set of requirements within 30 days from the date of the exemption being granted; and

Applicants are thereafter required to submit extensive information, including fair treatment of policyholders and acting in their best interest; as well as also set out a case for exceptional circumstances to justify a need for exemption.

The MSA defines the “business of a medical scheme” as follows:

‘‘Business of a medical scheme’’ means the business of undertaking, in return for a premium or contribution, the liability associated with one or more of the following activities:

(a) providing for the obtaining of any relevant health service;

(b) granting assistance in defraying expenditure incurred in connection with the rendering of any relevant health service; or

(c) rendering a relevant health service, either by the medical scheme itself, or by any supplier or group of suppliers of a relevant health service or by any person, in association with or in terms of an agreement with a medical scheme;”

The amended definition of “business of a medical scheme” will become effective on the same day as the Demarcation Regulations, which is 1 April 2017.

Members of the SAIA Health Insurance Forum have raised various queries in respect of the Demarcation Exemption Framework including practical issues that may arise in the application process. The SAIA is therefore requesting a meeting with the CMS to discuss the issues raised by its members.

The link to the Exemption application on the CMS’ website is:

or more information contact: Easvarie Naidoo