CONSTITUTIONAL COURT
Genesis wins case on accounting for use of medical savings funds
Genesis medical scheme has won its legal battle with the Council of Medical Schemes over how to account for the funds in members’ medical savings accounts (MSAs), a development that has potentially far-reaching implications for both the industry and consumers. On Tuesday, the Constitutional Court ruled that all funds paid by members to their schemes should be considered as assets, regardless of their intended use. This technical accounting point will make a material difference in the way schemes calculate their solvency ratios that measure gross income against reserves. Treating MSA balances as assets means schemes’ reported solvency ratios will improve, because funds accumulated in MSAs will now be considered as part of a schemes’ reserves, said Insight Actuaries joint CEO Barry Childs. This is important because better solvency ratios mean less pressure on schemes to increase premiums. The judgment overturned a high court ruling that the council has used for the past decade as the ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.