What's the difference between closed and open medical schemes?

Closed medical schemes are medical schemes where membership is limited to members of a specific employer, employer group or industry. UKZN Medical Scheme is a restricted medical scheme and only employees, retirees. and widows/widowers of employees of the University of KwaZulu-Natal can belong to the Scheme.

Anyone can join an open medical scheme - they have no restriction on membership. Open medical schemes have to accept all people who apply for membership. Employers who do not offer their employees a restricted medical scheme and people who do not join a medical scheme through their employer, join an open medical scheme.

Why does UKZN have a closed medical scheme for its employees?

UKZN'S main reason for offering employees a closed medical scheme is that it allows most employees access to better benefits at lower contributions than they would be able to through open medical schemes.

Contributions are lower in a closed scheme because:

• Members of the Scheme use their benefits wisely (have a better claims cost profile) than members of open schemes
• The Scheme's operating costs are lower than that of an open scheme. This is largely because the Scheme does not have certain expenses such as marketing expenses or broker fees, which are necessary for open medical schemes
• The Schemes Trustees are not remunerated, as with open schemes.

UKZN also chose to use a restricted medical scheme because:

• A restricted medical scheme can tailor benefits to suit the needs of their members. UKZN aims to ensure employees have access to comprehensive cover for major medical expenses.
• A restricted medical scheme can set contribution levels to meet the needs of the participating employer and its members.