Ins and outs of medical savings accounts

Most medical schemes that offer savings accounts operate these accounts through their administrators. You submit your claim to the scheme, through its administrator, in the usual way and the claim is paid if you have enough money in your savings account.

Typically, you don't pay any charges when you claim, nor are any annual fees deducted directly from your savings account. Discovery Health, however, points out that there is a charge for administering savings accounts, and this charge is included in your contribution to the scheme.

Most schemes operating savings accounts through their administrators say they don't pay interest on credit balances in these accounts. Genesis points out that paying interest on these balances means you could be liable for tax on the interest earned.

Schemes which are the exception and do pay interest on positive balances include: Discovery Health, which pays 6.3 percent a year; Ingwe, which pays at the rate equivalent to the average interest that the scheme earns on your savings; Medicover, which pays a rate linked to the prime rate; Pathfinder, which says its rates fluctuate, but it is currently paying 4.8 percent a year; and OpenPlan, which, at the discretion of the trustees, pays two percent less than the current money market rate.

Some schemes that have medical savings accounts offer credit facilities on these accounts, giving you access in advance to what you will contribute to the account during the year. Some give you access to the full year's contributions to your account, some limit the credit to six months worth of contributions and others to nine months.

This can be helpful if, for instance, you incur a lot of medical expenses when you have only just started contributing to a savings account and have not yet accumulated much of a balance.

However, you should also remember that if you use this credit and then leave the scheme before the end of the year and before your contributions have covered what you spent in advance, you will owe the scheme money.

Schemes that do not pay interest on positive balances in savings accounts typically do not charge interest when members access savings account funds in advance. The exceptions include Discovery Health, which charges 2.5 percent on negative balances, and Pathfinder, which charges 7.2 percent a year.

OpenPlan does not charge for advancing savings account contributions, but it does pay interest on positive balances.

Cards

Some schemes outsource the administration of their savings accounts and use health debit or credit cards. For instance, Bonitas and Medshield use Standard Bank's MediCard, although Medshield is moving to a new card.

Resolution Health is planning to launch a debit card for scheme members as well as non-members.

If you are a member of one these schemes, you will be issued with a debit/credit card in addition to your normal membership card. Your savings account contributions are paid into the card and you present the card as a form of payment when you get medicine from a pharmacist or visit a doctor.

As long as you have funds available in the card and the healthcare provider has the facilities to process your transaction, the payment goes through. If the healthcare provider cannot process the transaction, you will have to submit the claim to your scheme for payment. The provider is likely to ask you to settle the bill first and then claim back from your scheme, which may mean you have to wait for your money.

The companies that provide these cards have different rules on interest, credit facilities and charges. Personal Finance will outline these details, and the Council for Medical Schemes's views on these cards, next week.

Here are some of the medical schemes that offer savings accounts that enable members to manage their own day-to-day cover:

- Bonitas' Bonsave option;

- Discovery's Essential Core Standard option;

- Medihelp's Dimension Core option;

- OmniHealth's OmniSave option;

- OpenPlan's Premier Classic option;

- Oxygen's Core Plus option;

- Pathfinder's Lane option;

- Pharos's Footprint option; and

- Resolution Health's Hospital Plan.

The following are some of the medical schemes that offer day-to-day medical benefits and savings accounts to top-up or extend any of the scheme's benefits:

- Cimas's Nu-Gen Excess Plan and Wellness Plan;

- All other Discovery plans;

- Fedhealth's Core, Maxima Core, and Maxima Standard options;

- Genesis's Plan B;

- Ingwe's Capitation and CarePlus options;

- Liberty's Siliver option;

- Medicover's Alta, Bona and Titan plans;

- Medihelp's Medihelp100 and Medihelp80, Dimension Elite and Dimension Prime options;

- Medshield's MediPlus, MediElite and MediValue options;

- OpenPlan's Premier Select, Premier Elite and Premier Pinnacle options;

- All other Oxygen plans;

- Pathfinder's Trailblazer, Avenue and Boulevard options;