Now that Medishield Life is well entrenched, do we still need to offer employees an Employee Benefit package?
MediShield Life, similar to MediShield, is an individual basic universal healthcare insurance scheme which helps to pay for large hospital bills and expensive outpatient treatments, including dialysis and chemotherapy for cancer. In terms of treatment, MediShield Life provides access to Class B2/C wards and provides for subsidised treatment in public hospitals to as many people as possible. In this context it has been a valuable initiative, reaching a large number of people.
Those individuals who choose to stay in A/B1 wards at public hospitals or private hospitals can still benefit from MediShield Life. However, the compensation levels are calculated based on a percentage of your bill, meaning the pay-outs are at roughly the same level as someone who seeks treatment in a B2/C class ward.
Although MediShield Life does provide coverage, it isn’'t the same as having a comprehensive 'high-end' medical package. With an aging population, and increase in chronic disease rates, and high rates of medical inflation, top employees are demanding greater choice in healthcare options.
What does MediShield Life mean for employees?
As MediShield Life only covers inpatient treatment (in lower class categories and in public hospitals), your employees will have to decide whether to claim on their employee benefits package or MediShield plans.
Depending on the scope of the inpatient treatment, most employees will resort to claiming from their corporate plans. In most cases, corporate plans are a lot more comprehensive and provide more choice of treatment options.
What does this mean for employers?
Employers will be wondering if they are providing double cover now and may consider the possibility of funding their employees' private MediShield plans as an Employee Benefit. While this might look a good option, the premiums would skyrocket.
Private MediShield plans are age-banded -- premiums increase as employees move up age brackets. Corporate plans are rated as a group and as a result premiums are held at lower levels. As an option, employers might start exploring the possibility of voluntary top-up programmes to increase specific coverage if there is a perceived shortfall.
What do HR teams need to know to make effective decisions?
The ageing population is putting increasing pressure on most aspects of Singapore's Health Care system and the Ministry of Health is going to be continually monitoring and making changes to the system to ensure it is sustainable. As a result, HR teams should keep up-to-date with these changes and monitor their workforce demographics to make a decision best suited to their business.
There are, of course, insurance advisors who can assist with this assessment. HR teams will need to prepare themselves for additional administrative work to integrate MediShield coverage and privately sourced health benefits.
What should HR teams be advising their staff?
A good first step for HR teams is to evaluate how many of their employees are already on the MediShield plan. Corporate inpatient plans only cover up to a certain age (i.e. 70). A review of your current benefit options is a good starting point. This will ensure you are offering industry-competitive benefits that help with talent retention and ensures you are not over/under-insuring.
Implications for internationally expanding businesses
As an increasing number of Singaporean businesses look to expand overseas, the global mobility of key staff has to be taken into account when developing a health benefits package. The local MediShield plans are for local inpatient treatments and do not provide adequate reimbursements for overseas hospitalisation. Businesses need to ensure their people are covered no matter where they are located, or where they are working.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Andrew Merrilees is Regional Head of Benefits - Asia Pacific, Employee Benefits at Lockton Companies (Singapore) Pte Ltd.