Employees are important assets to your company. Ensuring their health and well-being should be a top priority. Wondering what options you have with regards to employee health benefits? Here is a quick breakdown of the 4 types of employee health benefits tools your company can adopt.
1) Traditional health insurance plans
Health insurance provides some financial protection or coverage in the event of financial loss due to an accident, illness or disability. It ensures a payout if one incurs the health issue(s) and/or health service(s) predetermined in the insurance plan, subjected to the terms of agreement. For example, it can provide one with an income while one is in hospital or cover the cost of one’s medical treatment and care. The type of health insurance policy your company chooses to invest in depends on what you wish to protect your employees against. Some forms of health insurance plans include hospitalization, surgery, outpatient benefits, integrated shield plans and long-term care coverage.
For this tool, large corporations enjoy the advantage of economies of scale, where the nature of having more employees enables companies to secure bulk discounts and in turn pay lower premiums. However, for smaller companies with a leaner team, they are unable to obtain corporate rates which translates to higher premiums that might put a strain on the companies’ budget. There could also potentially be an overlap between the employees’ own individual insurance coverage and group insurance coverage which results in excess coverage.
Depending on the budget and needs of your company, this may or may not be the best option for you. Check out our analysis of the pros and cons of conventional corporate insurance plans before deciding on what works best for your company.
2) Flexible spending account / internal reimbursement
A flexible spending account is usually a fixed dollar amount that employers provide employees as a part of their employee benefits. The money in the account usually has to be spent within specified categories based on a set of guidelines outlined by the company. For instance, a health spending account typically provides reimbursement for eligible health expenses whereas a wellness spending account can be utilised for a broader range of lifestyle activities such as fitness classes and more.
While employers have the autonomy to decide on the amount spent on these health-related benefits, this has not been a popular option among companies due to various reasons. These include the time and effort needed to detail guidelines for specific spending accounts and the potential hassle of administrative processes of claims that companies need to manage. In addition, companies also need to take note of the differences between taxable and non-taxable reimbursements laid out by the respective countries’ tax collection body.
In Singapore, the tax principle laid out for flexible benefits by the Inland Revenue Authority of Singapore (IRAS) defines “all gains and profits derived by an employee due to his employment are taxable, unless they are specifically exempt from income tax or are covered by an existing administrative concession”. For example, reimbursement to an employee for expenses incurred for medical treatment sought by an employee remains non-taxable even if the reimbursement is claimed under the flexible benefits scheme.
3) Corporate healthcare solutions provided by Third Party Administrators
Third Party Administrators (TPAs) provide intermediary services such as administrative claims processing and management of the employees’ medical benefits for employers. TPAs typically partner with a panel of healthcare providers (General Practitioners, Specialists, Dentists) to link up companies looking to provide healthcare benefits for their employees. Depending on the size of the company and the type of coverage employers want to provide, corporate packages are set out accordingly. In return for their service, TPAs receive an administrative fee for channeling corporate employees to their healthcare providers.
4) Customizable, Progressive Benefits Package
Technology has enabled new ways in navigating the path to provide a unique employee health benefits package that best meets the needs for each organization. Here are a few examples of companies that provide such employee benefits packages in Singapore.
Rewardz is a “one-stop” HR platform that targets a broad category of employee benefits and employee engagement. In relation to employee health benefits, Rewardz provides employee wellness benefits to cultivate a healthy, motivated and happy workforce.
Carbonate is a cloud-based HR software that helps small and medium companies minimise the paperwork using their mobile app. Carbonate offers on-demand corporate benefits provided by Singapore telcos, fitness and F&B companies.
Mednefits is a new kind of health benefits company using technology, data and design to make benefits simple, affordable and human. By pooling our primary target market - SMEs - together, we are able to obtain hugely discounted corporate rates from healthcare providers islandwide. Using technology, we aim to replace existing intermediaries in a conventional healthcare insurance ecosystem and transfer the savings directly to our end-users. By appointing us as your company’s insurance provider, you can obtain our health benefits platform, the Mednefits Care Plan, at zero cost which helps lower your healthcare costs by up to 60 percent.
With a breakdown of these employee health benefits tools in mind, we hope you are ready to weigh out suitable options and find what best fits your organization. That being said, don't be too quick to jump the gun - make sure you understand why you are doing it and how to make your benefits strategy a success.