What is the minimum number of persons that can be covered by a group insurance plan?

Employee benefits are neither extensively legislated for nor a prominent feature of the workplace culture. Certain perks are ubiquitous - such as a fair amount of annual leave – while others, like overtime pay, are only allowed under restricted conditions. And, of course, in place of any pension or retirement benefits, we have instead the Central Provident Fund, with its fair share of supporters and detractors alike.

But what about healthcare? Unlike certain countries like the U.S., health insurance is not an integral part of an employment contract in Singapore. The only mandatory employee insurance that companies must take out are:

• Work injury compensation insurance: as mandated by theWork Injury Compensation Act (WICA), employers must purchase this insurance for foreign and local employees who are doing manual work, or are earning less than S$2,100 per month.

• Foreign worker medical insurance: for all foreign workers working in Singapore, there is a mandatory medical insurance coverage of at least S$15,000. Employers need to ensure coverage is in place for inpatient care and day surgery, as well as to cover hospital bills that are non-work related.

• Personal accident insurance: for foreign domestic workers (such as live-in helpers or maids).

Other forms of health insurance for employees are not compulsory.

However, the majority of employers in Singapore still do provide employees with at least some basic medical benefits, it could be out of their own pocket on a reimbursement basis, or in the form of an insurance plan, with some even encompassing more comprehensive features. Since this means a company is purchasing insurance in bulk to cover all its employees, this is generally known as group insurance or company insurance.


Why is group medical insurance important to employers?

From an employee’s point of view, the benefits of free medical coverage seem obvious. But what’s in it for the towkays?

For starters, both employees and employers can have better peace of mind regarding the welfare of the former. Employees who value their health insurance coverage are more likely to appreciate the company more. This is especially pertinent due to the fact that employees with pre-existing conditions may not be able to get medical coverage on their own personal health insurance plan, if they even have one; under company insurance, their pre-existing conditions may be even covered, subject to terms and conditions of the company insurance. This increases the willingness of these employees to remain with the company and help it to thrive.

In situations where the employer is a small family-run business whose employees largely consist of family members, the cost savings of getting bulk insurance for everyone, as opposed to each family member purchasing an individual insurance plan, can be immense.

For those with a more pragmatic disposition, group insurance premiums are also tax deductible, further lowering the cost for employers to provide medical coverage for employees.


What types of coverage does group insurance provide?

A wide range of coverage is available for selection, so this really depends on the employer who is purchasing the insurance. Typically, group insurance includes a hospitalisation and surgical coverage arising from illness or injury. Additional riders can be customised. These include:

• Term Life insurance for death, disability and / or Critical Illnesses

• Accidental death / accidental medical reimbursement

• Dental

• Maternity rider, covering expenses arising from delivery, abortion, or miscarriage

• Outpatient clinical, covering medical treatment from a general practitioner (GP) or specialist, depending on the rider

• Traditional Chinese Medicine

Can employees solely rely on their company’s group insurance coverage?

The obvious answer is no, not least because company insurance coverage is only in effect while an employee is under the company’s employment. Since there is no guarantee that this is a permanent situation (and the present reality is that workers don’t stay put at a single company for very long), the risk of losing said medical coverage is very high. One certainly does not wish to be in a position where one is both unemployed and facing a medical situation, thereby needing to pay for medical expenses out of pocket.

It is thus highly advisable for everyone to have their own personal insurance coverage.

However, it must be said that company insurance does offer certain benefits that can complement and fill up the gaps in one’s personal coverage.

For instance, all Singaporeans and Permanent Residents are covered by Medishield Life (for minimal medical and hospital coverage) and they can upgrade to private integrated shield plans (IPs) for more extensive coverage using a combination of their Medisave as well as cash components. In fact, an estimated two-thirds of Singaporeans do this.

However, from 1 April 2021, all IPs with full riders covering hospital bills are restricted to only 95 per cent coverage, with the remaining 5 per cent to be borne by the patient. This is to curb rising healthcare service consumption in Singapore and to encourage the public to take better accountability for their healthcare expenses.

This remaining 5 per cent of co-payment costs may still represent a significant outlay. Group insurance, on the other hand, can then be used to cover this gap, if not the whole expense but subject to the policy limits.

In addition, individuals cannot purchase insurance coverage for standalone outpatient treatment from a GP or specialist. Dental treatment coverage is similarly not allowed.

As mentioned earlier, employees with pre-existing medical conditions will also find group insurance desirable as it may be extended to cover their medical condition while their personal insurance plans that are purchased after they have developed the medical condition will not. Depending on the medical condition in question, and the cost of providing treatment for it, this can be a huge factor in one choosing to work in a company or not.

Finally, some companies allow extension of the group insurance to cover their spouses and children, thus providing a much more comprehensive coverage. Again, this can be a pulling factor for employees to choose or to stay on in the company.


What to consider when getting a group insurance

For employers who have not gotten any group insurance and wish to explore further, there are two options to consider: Either those off-the-shelf group insurance package plans, whereby premiums are fixed according to age / gender, and will not be affected by the claims record of employees; or customisable plans that allow mixing and matching of benefits and coverage - overall premium may be lower, but there is usually a minimum headcount of at least 25 employees, and premiums may be affected should there be a large claim amount for the policy year. Hence, it is advisable to get different quotes to do a comparison, as benefits and premiums will differ.

Do take note that there is usually a minimum requirement of at least two to five headcount before a group insurance plan can be taken up. For additional riders such as dental and outpatient benefits, the minimum headcount could be raised to 10. There is also a last entry age of 65 or 70, and renewability is usually until age 75.

A Group Insurance Fact-finding Form (GIFF) is also required to understand more about your company’s employee profile before a quote is provided.

The following is an example of what a group insurance comprises:

Read also:7 Key Changes to the Work Injury Compensation Act (WICA) That SMEs Need to Know: Effective From 1st September 2020Read also: COVID-19: How to Reduce Your Company Insurance Costs During This PandemicRead also:Business Planning: What is Keyman Insurance and Why Do You Need It?

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