Media release: Council for Medical Schemes may not compel employers

The Free Market Foundation has lodged comments with the Council for Medical Schemes about the Council’s proposal in June to issue a Circular which would purport to compel an employer who chooses to appoint a medical-scheme broker on behalf of its employees to appoint at least three such brokers, so as to allow its employees freedom to choose any of the appointed brokers as and when an employee so wishes.

This act of compulsion contemplated by the Council for Medical Schemes (praiseworthy though it might seem to be) is not authorised by the Medical Schemes Act of 1998, which sets out the powers of the Council. Gary Moore, senior consultant at the Free Market Foundation, states that “The Act does not authorise the Council, by issue of a Circular or otherwise, to stipulate that an employer who appoints a broker on behalf of its employees must appoint at least three brokers. Neither does the Act authorise the Minister of Health to make regulations compelling an employer to appoint three brokers for its employees”.

Any contemplated Council Circular that sought to compel employers to appoint a minimum number of brokers for their employees would violate the Constitution, which declares that the Republic is founded on the Rule of Law. It is a principle of the Rule of Law that public bodies must not exceed the limits of their powers.

The FMF comments can be read HERE.