The Council for Medical Schemes (CMS) has obtained a High Court order placing MediPos under provisional curatorship because the South African Post Office (Sapo) has not paid contributions to the scheme.
The CMS brought the urgent application on an ex parte basis on 14 February. The return date is 21 August.
Judge Lettie Molopa-Sethosa appointed Justice Kudumela as the provisional curator.
MediPos, which was established in 1995, is a closed scheme that caters to Sapo employees and their families. It has 11 000 principal members and slightly more than 21 300 beneficiaries.
In a statement, the CMS said MediPos informed it that Sapo last paid contributions in July 2022. At that stage, the scheme’s solvency ratio was 35.9%, and it was expected to reach 11% by December.
Dr Sipho Kabane, the CMS chief executive and registrar, said he was forced to act “swiftly” because Sapo was technically insolvent and has indicated that it intends to cut working hours and/or retrench staff.
He said the outlook for MediPos was “bleak”.
According to Kabane’s affidavit submitted with the CMS’s provisional curatorship application, Sapo owes MediPos R717 million. It incurred losses of R2.2 billion in the 2021/22 financial year, and its liabilities exceeded its assets by more than R4bn.
MediPos was losing members, its financial position was “perpetually unstable”, and it reported an operating loss of R272m in December, Kabane said.
“The scheme is facing imminent collapse and therefore the suspension of benefits to its members and beneficiaries,” he said.
MediPos’s solvency ratio has been on a downward trajectory since 2019, from 90.5% to 67.7% in 2020, and to 36.1% in 2021.
As a result of the declining solvency ratio, in 2021 the CMS placed MediPos under close monitoring, as a Type III scheme – one whose solvency ratio is above the statutory minimum of 25% but is experiencing financial difficulties and a rapidly decreasing ratio.
Business Day quoted Sapo spokesperson Johan Kruger as saying that the current arrangement whereby Sapo pays two-thirds of employees’ contributions was not sustainable.
“Sapo plans to now allow its employees to choose from hospital plans, medical insurance or medical schemes, and will phase out the subsidy of medical aids contributions,” he was quoted as saying.
I need to talk to somebody in connection with my brother in law George Richard Smith who lived in Belgium and passed away on 9th October 2023. I do have power of attorney, his wife who lives in Belgium asked me to contact someone at the postal med aid. What will happen now with contributions and will his wife still benefit? My contract number is 0835319330
Good day
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