SINGAPORE: The take-up rate of the voluntary portable medical benefits at the company level has not been high, said Minister for Manpower Lim Swee Say in Parliament on Tuesday (Nov 8).
Mr Lim cited a survey conducted in 2013 which showed that about four per cent of companies employing about 20 per cent of local workers offer such benefits. Portable medical benefits cover people even if they are out of work or in between jobs.
Mr Lim was responding to Nominated MP Ms K Thanaletchimi’s question on how many companies have implemented portable medical benefits for their employees.
More than 90 per cent of employers provide additional medical benefits at the company level and among them, some employers provide portable medical benefits on a voluntary basis, said Mr Lim. “However the take-up rate has not been high.”
He explained the low take-up rate could be due to the preferences of employers and unions. Mr Lim said it may be more cost-effective for employers to adopt a short term perspective as most of their workers are healthy.
“Many of them find it more effective for them to attract and retain their workers they want. In other words, they can tailor their company medical scheme as an attraction,” he explained.
Mr Lim also added that the unions may also find it challenging to convince the workers to move to portable medical benefits as most of the companies provide medical insurance which does not require co-payment.
The challenge for the tripartite partners is to adopt a long term perspective, Mr Lim said. “So indeed today there are already financial incentives for employers to move towards portable medical benefits. For example the tax deduction can be up to two per cent of the payroll instead of one percent.”
He added: “The hurdle is how to overcome this short term perspective of the workers and the employers.”
Going forward, the Government’s focus is to encourage employers to shift from providing non-portable medical benefits, such as Group Hospital and Surgical (GHS) insurance, to making additional contributions to employees’ Medisave accounts, Mr Lim said.
