The transition of Bonitas Medical Fund’s administration from Medscheme to Momentum Health, scheduled to take effect on 1 June, is continuing, even as the legal challenge brought by Medscheme works its way through the courts.
As previously reported, the High Court application to halt implementation of the contract was removed from the urgent roll, with the matter expected to be re-enrolled once outstanding procedural issues are resolved.
Read: Bonitas-Medscheme court battle stalls as application removed from urgent roll
The application forms part of a broader dispute over Bonitas’ procurement processes. Medscheme is seeking to halt the implementation of the administration contract awarded to Momentum Health, arguing that it should not proceed while a regulatory investigation by the Council for Medical Schemes (CMS) into earlier tender processes is still underway. Bonitas has rejected this position, maintaining that the Momentum contract was lawfully awarded and is separate from the tenders under investigation.
In the interim, both Sanlam, through Medscheme, and Momentum Health have outlined how they are managing the operational and workforce implications of the change, as well as the uncertainty created by ongoing litigation.
Momentum indicated that it is proceeding with preparations despite the unresolved legal process.
“We respect the ongoing legal process; however, it would be irresponsible not to proceed with the transition while the courts make their determination,” said Damian McHugh, chief marketing officer at Momentum Health.
“A transition of this scale requires significant lead time. We are taking a prudent approach and preparing thoroughly so we are ready to fulfil our mandate. This positions us to transition smoothly and minimise any disruptions to members, regardless of timing.”
Sanlam has also acknowledged the litigation, noting concerns around the procurement process.
Kanyisa Mkhize, chief executive of Sanlam Corporate, said the group has “noted the litigation currently underway with Bonitas over alleged predetermined outcomes in four RFP processes”.
“It is critical that these medical scheme members continue to be protected, that due process is followed, and that any concerns about governance and fairness in procurement processes are properly and independently examined before decisions affecting members become irreversible,” she said.
The matter is expected to return to court once procedural issues have been addressed.
Workforce and capacity
In comments previously reported by News24, Sanlam CEO Paul Hanratty indicated that the loss of the Bonitas mandate could place a significant number of jobs at risk at Medscheme, given the operational capacity built around the contract, while noting that the contract represents a relatively small portion of Sanlam’s overall earnings.
Sanlam said its immediate priority is to ensure that “medical scheme clients and their members continue to receive the high quality of service and attention which they expect”, adding that “this service continues at the same high level”.
The group added that “any disruption to a decades-old relationship naturally brings with it challenges that require response and adaptation”, noting that “options and opportunities have been identified, prioritised and are being assessed”.
Sanlam’s broader “wealth and health” approach centres on integrating healthcare considerations with financial planning, including risk cover and savings, within a more unified advice framework. The strategy also places emphasis on using data and clinical insights to better align healthcare and financial outcomes over time.
Read: Sanlam links health and wealth in advice model shift
Sanlam holds a controlling 60% stake in AfroCentric, the investment holding company that owns Medscheme, its largest subsidiary and a major medical scheme administrator and health risk manager.
Sanlam said that, in the context of its “wealth and health” approach, its interest is “primarily in preserving the expertise and experience of Medscheme while continuing to serve the 3.3-million members and beneficiaries of the 13 schemes it administers”.
It added that Sanlam approaches implementation of its strategy “through a patient long-term lens”, and said it does not anticipate that this matter will affect that approach.
Sanlam said the potential impact on Medscheme’s workforce is being managed through several actions.
First, it said Medscheme approached the winning bidder in terms of Section 197 of the Labour Relations Act, which provides that when a business, or part thereof, is transferred as a “going concern”, employment contracts transfer automatically from the old employer to the new employer.
“Unfortunately, the winning bidder has rejected such an application of the law in this instance, in spite of legal precedent,” Sanlam said.
Second, Sanlam said several opportunities to redeploy staff into other parts of the business have been identified, with more details expected to become available to staff in the coming weeks.
Third, Sanlam said it will prioritise employment applications from Medscheme staff.
Momentum Health, meanwhile, said it is assessing its workforce requirements as part of its operational readiness planning, with the aim of ensuring that all essential positions are filled and trained ahead of the planned June implementation date.
Operational readiness
Momentum said it is working through key operational milestones ahead of the planned implementation date.
“We are investing significantly in people and infrastructure to deliver on this transition,” McHugh said, adding that key steps include securing additional office facilities, establishing walk-in centres across the country, filling critical roles, and ensuring that enterprise systems are configured with Bonitas-specific benefits and scheme rules.
“We are working methodically through each milestone to ensure minimal disruption,” he said.
The group said it operates on a “modern, scalable administration platform”, has “proven experience in managing large medical schemes”, and is making further investments in systems infrastructure, and operational capacity to support the implementation process, to ensure “consistent, high-quality service to members and stakeholders”.
The group said this investment supports “both immediate transition requirements and long-term sustainability”, and is intended to support “the scale and complexity of the administrative requirements”.
On staffing, Momentum indicated that onboarding is being managed through a structured process.
“Service continuity and operational stability from day one is essential,” McHugh said.
“Our onboarding programme is tailored to each function’s responsibilities and is rolled out in a phased and structured manner,” he said.
He added that the administrator is engaging with Bonitas’ team to ensure a smooth transition and handover of institutional knowledge, with new staff expected to work alongside experienced team members as the implementation date approaches.
