In South Africa, medical aid schemes can impose late-joiner penalties on individuals who join a medical aid scheme after the age of 35; those who have never been medical aid members, or those who have not belonged to a medical aid scheme for a specified period of time since April 2001.

Late-joiner fees have been put in place to compensate for potentially increased claims by people who join a medical aid scheme when they’re already older or infirm, and can range from 5% of contributions to 75%. The fees are imposed at the discretion of the medical aid company, and apply to all types of medical aid plans, including hospital plans.

How are late-joiner fees are calculated?  Late-joiner fees are calculated as a percentage of one’s medical aid contribution, but exclude the savings component of the contribution (where applicable). A simple equation is used to determine the late-joiner penalty fee:

Age upon application minus (35 years + years of previous cover) = Total years uncovered. The number of years uncovered corresponds to a percentage on the following table, which is used to calculate the fee:

Total years uncovered Late-joiner fee

0- 4 years 5% of contribution

5 – 14 years 25% of contribution

15 – 24 years 50% of contribution

25 years or more 75% of contribution

Speak to a My-Fin advisor for more information