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Healthcare
Friday, December 1, 2006
Broker aid

The success of the introduction of the low-income medical scheme will rely heavily on how it is integrated with existing healthcare provision. There are many pitfalls and employers therefore need the assistance of brokers.

This is the view of Andre Jacobs, Regional Manager Healthcare for Aon South Africa, which is a risk management and insurance consulting organisation. “The proposed Low Income Medical Scheme (LIMS), targets employees earning between R3 000 and R6 000 per month.”
He points to three possible misconceptions:
• That this employee category might be perceived as a group not needing financial advice relating to their medical scheme;
• That their needs are perceived to be similar to employees on the existing medical scheme options; and,
• That this group would be comfortable with poor quality advice.

Mr Jacobs says the process of choosing a medical scheme option is a joint effort between the broker and the member. “The member has the obligation to define clearly his healthcare needs and risks whilst the broker must ensure he provides information and guidance as to how to choose a medical scheme option.
“Our Aon employees, for example, have all undergone a skills program to equip them with ‘option modeling tools’, which will allow them to assess the healthcare risks and needs of members. This modeling tool uses as its base the internationally accepted 6-step financial planning process. This will ensure that no matter what level of employee we work with, they will all receive the same quality of advice.”
He says it is important to note that there will be a totally different benefit set for LIMS members. One example is that they may not have access to Private Hospitalisation. The reason for this restriction in benefits needs to be understood in context with the lower contributions being made. In essence, the LIMS benefit set will have a specific value proposition for those qualifying employees.
Employer subsidy and participation policy will also need revision. “Here employers will have to re-assess their participation and subsidy policy to ensure that it supports the introduction of the LIMS products without unnecessarily burdening the bottom line profit imperative for the business. The Aon compliance audit tool will assist employers to identify and avoid or manage unnecessary additional employment risk in integrating the LIMS within the healthcare provision to employees.
“The most important aspect of which employers should be mindful is that the implementation of the LIMS product must include the involvement of competent brokers if it is to be successful.”

Copyright © Insurance Times and Investments® Vol:19.6 1st December, 2006
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