Medishield Life and the Employment Act: are employers getting it right?

July 3, 2019


Providing employee benefits is considered one of the must-dos in companies because it brings about multiple benefits. For example, employee benefits can keep employees happy and healthy, enhance productivity and help employers better attract and retain talents. Among the various employee benefits, many companies do not go beyond providing basic health benefits for their employees.

Individuals are always concerned about their health. With a healthy workforce, the company can achieve more in a shorter period of time. As such, the government has been doing their part by making Medishield Life compulsory for all Singaporeans and enforcing the Employment Act to ensure individuals are also well-taken care of at the workplace.

How does Medishield Life cover Singaporeans and PRs?

Medishield Life is a basic insurance package which will cover Singaporeans and Permanent Resident (PRs) for life regardless of pre-existing medical conditions. It provides subsidised treatment fees for large hospital bills and selected costly outpatient treatments including chemotherapy and dialysis. In each policy year, insurance holders can only claim up to $100,000. Comparatively, Medishield limits total claim payouts of up to $70,000 per policy year and covers a person until he/she is 92 years old.

At the same time, it ensures that if anyone needs to be hospitalised in a public hospital, their bills of staying in a B2/C type ward are covered. Hence, employers need not cover for these bills that can be subsidised by their employees’ Medishield Life.

What does Medishield Life mean for employers?

How an Integrated Shield Plan (IP) works (Source: Ministry of Health)
How an Integrated Shield Plan (IP) works (Source: Ministry of Health)

As a basic insurance package, Medishield Life is not comprehensive for most as it covers only inpatient and large hospital bills. This means that common ailments such as flu, cough and more minor symptoms which does not require hospitalisation are not covered by Medishield Life.

Furthermore, many individuals typically opt to purchase additional private insurance coverage to cover the costs of staying at private hospitals or Class B1 or A wards in public hospitals at a lower cost. This means that companies who provide inpatient insurance for their workforce are actually double insuring their employees. Instead of taking care of an employee’s inpatient charges, it is recommended that employers help their employees by covering some outpatient charges. This is in line with the Ministry of Manpower’s Employment Act which requires employers to extend healthcare benefits to their employees.

Pro Tip: Employers should complement their employees’ Medishield Life coverage by providing outpatient healthcare benefits such as GP, dental, TCM, and wellness benefits.

What does the Employment Act mean for employers?

The Employment Act has guidelines to protect all employees in Singapore and ensure that everyone get their deserved benefits. In order to be more inclusive towards managers and executives who earn more than $4,500, the Employment Act has been reviewed. Additionally, changes on paid sick leave have also been introduced. Companies must comply with these new changes in the Employment Act from April 2019. Below are the three key healthcare findings in the Employment Act.

a) Extension of core provisions to managers and executives

Managers and executives, who earn more than $4,500, were initially excluded from core provisions such as paid annual leave and sick leave. With this revision, it means that this group of the workforce will now be able to enjoy them just like the rest of the workforce.

To be entitled to paid sick leave, workers must work for their company for at least three months. If you have worked between three to six months, your paid sick leave will be pro-rated. After six months, you will receive the full entitlement of 14 days of paid outpatient leave and 60 days of paid hospitalisation leave. The 60 days of paid hospitalisation leave is inclusive of the days of paid outpatient leave.

b) Medical certificates (MCs) issued by registered doctors and dentists will be recognised for granting paid sick leave

Prior to the changes in the Employment Act, employers only had to recognise MCs issued by government and company approved doctors and dentists. This prevents employees with MCs from other medical practitioners such as private doctors, from recognised and granted paid sick leave.

However, as of April, employers would have to grant their employees paid sick leave when they obtain MCs from doctors who are registered under the Medical Registration Act and dentists registered under the Dental Registration Act.

Some might be wondering, will employees get paid if they obtained MCs issued by Traditional Chinese Medicine (TCM) practitioners? Well, that would depend on the company policy. Hence, it is best for you to check with the HR before deciding whether to visit a TCM.

Pro Tip: Employers should extend their employees’ GP coverage to more than government and company-approved doctors to ensure their health benefits package continues to comply with the Employment Act.

3. Reimbursement of consultation fees

In addition to paid sick leave, employers are required to reimburse their employees’ medical consultation fees when they go to the government or company approved doctors. Employees must have worked at the company for at least three months, receive at least one day of paid sick leave and obtain an MC before they can receive this entitlement.

If employees visit a private or non-company approved doctor, companies are encouraged to reimburse their employees’ consultation fees on a compassionate basis.

The government regulations in place helps ensure that every employee’s health and welfare is taken care of by employers. Besides these basic entitlements, employers often provide a wider range of healthcare services by purchasing outpatient insurance or setting aside a budget for flexible benefits to cater to today’s multi-generational workforce with diverse needs.

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