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Firms cite barriers in offering portable medical benefits

So far, only 17 of 1,400 unionised companies in the private sector have taken up plans to provide employees with portable medical benefits.

SINGAPORE: It benefits employees by ensuring their insurance coverage continues after they leave a job and does not necessarily cost a company more.

However, employers, while not averse to providing staff with portable medical benefits, cite barriers such as insufficient information, a lack of incentives and administrative hassles.

Employers TODAY spoke to said these issues need to be resolved if the National Trades Union Congress (NTUC) wants to succeed in its renewed push for more companies to take on portable medical benefits schemes (PMBS).

A PMBS typically involves riding on the Medisave and MediShield Life framework to provide medical benefits. Companies can make an additional contribution of at least 1 per cent of wages to an employee’s Medisave account, which the employee can use to pay for MediShield Life premiums or buy an Integrated Shield plan from a private insurer. An employer can also choose to provide staff with Integrated Shield plans.

So far, only 17 of 1,400 unionised companies in the private sector have taken up such plans.

The Singapore National Employers Federation (SNEF) could not provide numbers, but said “very few” non-unionised firms provide such plans, while insurer NTUC Income said more than 300 companies are covered under its Portable Group IncomeShield plan.

Among employers known to provide such plans are NTUC, for staff in its Administration and Research Unit, and the Civil Service.

Companies TODAY spoke to were put off by the administrative hassle of switching from one type of plan to another, especially if they were unsure what such a switch entailed.

Ms Jennifer Peirera, administrative manager at Oneberry Technologies, said: “Of course, we can look into it but, because we’ve purchased a specific (product) already, we’ll just carry on (with it).”

SNEF executive director Koh Juan Kiat said the cost of switching from a group insurance scheme to portable schemes offering comparable benefits could be costly. Also, employees could already be on different Integrated Shield plans provided by other insurers, making the conversion administratively difficult.

Added NTUC assistant secretary-general Cham Hui Fong: “For some companies, they may have existing medical insurance contracts as a group together with their subsidiaries or include the dependents of employees, making it less easy to transit to PMBS in the short run.”

For industries with high turnover rates such as the food and beverage sector, collaboration among insurance companies to offer similar portable plans across firms in the same industry would simplify the administrative process for organisations and ensure greater portability for employees, said Mr James Chan, managing director of corporate development at Genki Sushi. “People are leaving almost as soon as they are hired and that creates an administrative bottleneck.”

Employers were also concerned that migrating to PMBS does not guarantee that employees with pre-existing illnesses will be insured.

However, Ang Mo Kio GRC Member of Parliament (MP) Yeo Guat Kwang, also a director at NTUC, said many employers and human resource practitioners might still be unfamiliar with changes to MediShield Life, which would offer universal coverage for life, including for those with pre-existing conditions.

“So, it will actually be totally portable,” he added.

Noting that portable plans benefit employees more than employers, NTUC assistant secretary-general and Pasir Ris-Punggol GRC MP Zainal Sapari suggested offering more attractive packages and higher tax relief to incentivise firms to come on board and combat inertia.

Currently, employers adopting portable medical benefit arrangements recommended by the tripartite partners that meet qualifying conditions can enjoy a higher tax deduction for medical expenses of up to 2 per cent of their employees’ remuneration.

“Perhaps, the Government may want to consider increasing this percentage, so companies see it as a positive move that can actually improve their bottom line,” Mr Sapari said.

Mr Yeo suggested that firms could have schemes in which they co-pay for insurance. “That would definitely (be) cheaper than the current group hospitalisation surgical plans (they offer),” he said.

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