The Retirement Benefits Authority (RBA) has announced the formation of stand-alone and umbrella Post-Retirement Medical Funds (PRMFs) Regulations.
Post-retirement medical schemes can now be registered and regulated without the need to be entrenched to pension funds in a regulatory move aimed at enabling more people to access quality healthcare services after retirement.
Previously, such funds were operated by pension schemes as a special fund since their introduction in 2018. This meant that members whose pension schemes did not wish to explore the medical insurance space were locked out from saving for their healthcare insurance during their working years.
The pension regulator will oversee the accumulation of contributions and management of the funds while the Insurance Regulatory Authority (IRA) will oversee the payments through medical services providers. The PRMFs shall be required to appoint a corporate trustee to manage the fund and may seek actuarial expertise in design and funding. In addition, the funds shall be required to have registered within the country.
Speaking at a conference organized by Enwealth Financial Services at the Aberdare Country Club in Nyeri, Anne Mugo, RBA Chief Manager for Market Conduct noted: “This provision is in response to requests from the market. The previous regulation was only allowing you to contribute to your own scheme but we were informed that some schemes do not want to set up medical funds so they are denying their members this benefit”.
A survey conducted by Strathmore University and Enwealth Financial Services in May last year showed great distress among retirees attributed to huge medical expenses they have to incur. In the survey, 41% of the retirees reported they had to pay cash for their medical bills, only 32% having medical insurance while 20% were under National Hospital Insurance Fund (NHIF).
Simon Wafubwa, Enwealth Financial Services CEO noted during the event: “Medical insurance cover is one of the key pillars to successful retirement. According to statistics, 60 per cent of an individual’s medical expenses are incurred after the retirement age as this age group is highly vulnerable to diseases and need for hospitalization increases. Over the years, there has been a push from the market for Post-Retirement Medical funds, where members voluntarily contribute for medical insurance in their post-retirement years”.
The RBA official noted that the retirees under Post-retirement medical schemes will be covered for pre-existing and high-risk conditions, an area that most insurers shy away from or charge extremely high premiums.
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