The Competition Tribunal of South Africa has unconditionally approved the amalgamation of Bonitas Medical Fund (Bonitas) and Nedgroup Medical Aid Scheme (NMAS), to be effective from January 2022.
The product offerings of each scheme will remain unchanged for the rest of the year, however, NMAS members will officially be migrated to Bonitas from January next year.
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“The amalgamation will ensure that NMAS members become part of a large, sustainable medical scheme and further entrench Bonitas’s role as a leader in the healthcare market,” said Lee Callakoppen, principal officer of Bonitas.
“Over the past few years, various developments in the healthcare industry have led to a series of consolidations and amalgamations among schemes, a trend that is expected to continue. As a key player in the industry, with a wide range of options tailored to meet the needs of South Africans, Bonitas is positioned as the ideal amalgamation partner.”
The merger comes after the boards of trustees of NMAS commissioned preliminary investigations into a possible consolidation opportunity via an independent actuary earlier this year.
The positive outcomes of the first feasibility studies provided adequate motivation, which then propelled the NMAS board to pursue a merger process.
“NMAS has over 47 000 beneficiaries and the membership is encouraging. The benefits of the amalgamation are numerous [and] Bonitas is South Africa’s second largest open medical aid with financial indicators above the legislated requirements and industry average,” said Callakoppen.
“The scheme has one of the highest credit ratings in the industry, which is synonymous with a high claims-paying ability and stability, in turn ensuring members’ access to quality healthcare.”
As part of the regulatory requirements, the amalgamation process was subject to member consultation, who then voted in favour at the scheme’s annual general meeting which was held on August 18.
According to the schemes, the meeting was followed by ratification by the Competition Commission as well as an approval by the Council of Medical Schemes (CMS) to ensure that due diligence was afforded to all regulatory processes.
“The newly amalgamated scheme will have a broader national footprint and better economies of scale to negotiate favourable rates and improve provider networks. Bonitas’ strong financial stability and predictable claims history should also translate to more value for new members of the scheme,” added Callakoppen.
“The boards of NMAS and Bonitas entered into these amalgamation negotiations with the best interests of our members at heart. We believe this amalgamation will be to their advantage and benefit.”
Bonitas is an open medical scheme while NMAS operates as a closed medical scheme with its membership restricted to employees and retirees of Nedbank and Old Mutual Insure.
Palesa Mofokeng is a Moneyweb intern.