Gap cover regulations 2016 brought much-needed clarity to the gap cover market. Before the regulations were introduced, there was much uncertainty around what gap cover providers could and could not cover, and what obligations they had to their clients.
The new regulations brought about changes that ensure gap cover providers must adhere to certain standards, including the provision of clear and transparent information to their clients. This information includes details of the benefits offered, as well as any limitations and exclusions.
One of the most significant changes by the gap cover regulations 2016 was the requirement for gap cover providers to limit their benefits to a maximum of R150 000 per annum per insured person. This cap ensures that gap cover policies are used to supplement medical aid benefits, rather than as a substitute for them.
The regulations also stipulate that gap cover providers must only provide benefits for services that are not covered by medical aid schemes. This means that gap cover policies cannot cover expenses that medical aids are obliged to cover under the Prescribed Minimum Benefits (PMBs).
In addition to these changes, gap cover regulations 2016 also required providers to offer a standardised product with set benefits and exclusions. This standardisation ensures that clients can easily compare different gap cover policies and make informed decisions about which policy best suits their needs and budget.
Gap cover regulation changes in 2016 have brought much-needed clarity and standardisation to the gap cover market, making it easier for clients to understand what benefits they can expect and what limitations and exclusions apply. If you are considering taking out gap cover, it is important to choose a provider who adheres to these regulations and provides clear and transparent information about their policies.
Medical Aid and Gap Cover
The demarcation between short-term health insurance and medical schemes goes back to 2000, after the enactment of the Medical Schemes Act no. 131 of 1998. To educate consumers on the difference between medical aid scheme cover (which is governed by the Medical Schemes Act) and other types of health insurance (which are governed by the two insurance Acts), the final “Demarcation Regulations (DR)” was signed into law on 23 December 2016.
Gap Cover Regulations 2016 FAQ:
Do the 2016 regulations penalise Gap Cover?
No. Gap Cover is a short-term health insurance product that the new regulations is still necessary. It will remain, notwithstanding a few changes.
What are the main changes to Gap Cover?
- The annual benefit level has been capped at R150 000 per insured person per annum (This is subject to annual review/amendments)
- No enrolment discrimination based on age.
- Separate pricing on a “per group” basis, allowing for open enrolment and evading anti-selective practices in the market.
When did these new regulations come into effect?
These Demarcation Regulations (DR) were signed into law on 23 December 2016. All new policies had to comply from 1 April 2017. Existing policies had until 1 January 2018 to comply.
