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HRM Asia looks at the advantages of portable medical benefits, as well as some of the reasons employers are avoiding them.

When employees seek greener pastures, they bring with them all the skills and experiences accrued at their previous organisation.

These include practical and technical skillsets, and soft skills such as networking and communication.

However, the one thing they have never been able to transfer to their new job is their previous health benefits.

That is the case outside of Singapore. There, the national government there has been actively pushing the idea of portable health benefits among its labour movement and tripartite partners for the past 10 years.

Still, the adoption of these transferrable medical benefits by employers has not been overwhelming. Manpower Minister Lim Swee Say has revealed that a 2013 survey by his ministry showed that only about four percent of local employers have signed up to the options available under the Portable Medical Benefits scheme.

Making sense of portability

Portable medical benefits are a basic insurance package that workers can take with them if they switch employers, become unemployed, or retire.

This is in contrast to standard medical benefits which are lost when employees stop working for that specific organisation.

Companies can choose from three portable medical benefits options for staff: the Portable Medical Benefits Scheme (PMBS), the Transferable Medical Insurance Scheme (TMIS), and providing a Shield plan.

Under PMBS, employers make an additional contribution to their employees’ Medisave (national savings scheme to help Singaporeans pay for personal insurance and future medical expenses) account every month.

TMIS is an enhanced group hospitalisation and surgical insurance that companies can purchase for their employees. Staff covered under TMIS plans will be treated as continuously insured when they join a new company who has also bought a TMIS plan.

They will also receive continued cover for pre-existing conditions.

The third option entails employers affording their workers with inpatient medical benefits through a “Shield” hospitalisation plan.

Employers pay the premium on behalf of their employees, either directly to the insurer or as a reimbursement to the employee.

Companies adopting any of the three transferrable medical schemes receive a higher tax deduction for medical expenses incurred.

Why the inertia?

While there are clear advantages for employees when it comes to transferrable health insurance, there are some obstacles that have meant relatively few employers have signed on.

The first of these is higher costs. A 2015 report cited that switching to a transferrable medical benefits scheme would equate to an increase of about 30% to 50% in costs, depending on the company’s current scheme and demographics.

This would especially ring true for organisations with older workforces, as well as for SMEs which do not have access to extensive financial resources.

Some workers have also been unexcited about portable medical benefits schemes because most require a co-payment from their own pockets.

Switching over

Still, two organisations that have adopted Portable Medical Benefits for their workforces say the decision has been successful, with employees enjoying greater peace of mind. They have returned that favour in the form of greater loyalty and engagement.

Raffles Hotel Singapore was on a standard Group Hospitalisation and Surgical Insurance policy before being the first in the hotel sector to switch to transferrable medical benefits in 2008.

Jennifer Tan, the hotel’s Director of Talent and Culture, says the group insurance had several limitations.

One major gripe was that the scheme had an age limit of 65.

With the hotel having a substantial proportion of workers in their early 60s, this meant that many staff would have been left stranded without insurance coverage once they hit 65, regardless of whether they retired or stayed working.

With transferable benefits, employees can now enjoy lifetime insurance coverage even after leaving the hotel.

Some of the hotel’s employees did voice their reservations about the scheme. Many said they had been happy with their existing coverage and were not happy about the additional co-payments.

In order to clear the doubts, the hotel ran a series of roadshows to educate its staff on the benefits of the new scheme. The HR team also got into the act by having a one-on-one explanation for colleagues who needed more clarity and information about the transferrable benefits scheme.

The hotel’s decision to switch predominantly to a transferrable-based scheme (foreign staff are ineligible and so continue to be covered under group insurance) has paid dividends; its average voluntary staff turnover of 1.3% per month in 2016 was well below the industry average.

Raffles Hotel has also fared consistently well in its employee engagement space, having attained a score of 96% in its last colleague engagement survey.

The hotel has even gained international prominence after it represented Singapore in the International Workshop on Sustainability in Happy and Healthy Workplace in Asia, held in Tokyo in 2015.

Tan says since the launch of transferrable benefits, there have been a few cases of colleagues being diagnosed with serious illnesses.

“They saw the benefits of the coverage, which may not have been sufficient had they remained on the group insurance scheme,” she says.

Retired staff have also since visited the HR team to thank them, saying that the portable benefits scheme has meant greater financial independence and peace of mind in their retirement.

Another company that has adopted portable medical benefits is Canon Singapore.

The organisation’s decision to switch to this initiative stems from its corporate philosophy of Kyosei, which means “living and working together for the common good”. In a local context, one key aspect is ensuring that the welfare of its staff are being well looked after.

“The portable medical benefits scheme is aligned with our beliefs because of how it stays with employees for life, instead of only covering employees for the period that they remain with a particular organisation,” says Jason Hon, Canon Singapore’s Senior Director of HR.

Another attractive option for Canon Singapore employees is the fact the scheme caters to their needs at different life stages and guarantees them lifelong medical coverage.

Hon believes the more generous coverage has played a key role in employee retention, with average staff tenure now at more than nine years.

“Schemes like this go a long way in showing employees that they are valued, thus boosting their satisfaction and fostering a strong sense of belonging,” he adds.

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