Employees say medical benefits big pull factor in joining SMEs: Prudential survey

An ageing workforce and rising healthcare costs are also prompting workers to value medical coverage more. ST PHOTO: DESMOND WEE

SINGAPORE -  Employees view medical benefits as a big carrot for joining and staying with small and medium-sized enterprises (SMEs), but many of these firms struggle to provide coverage, citing small size and high cost of group insurance.

Medical benefits cover both inpatient, hospitalisation expenses and outpatient bills at general practitioner (GP) clinics.

The findings were revealed in a poll commissioned by insurer Prudential Singapore and conducted by market researcher Milieu Insight. A total of 1,029 Singaporean SME employees and business owners were polled this month.

The respondents are aged 18 and above, and work in SMEs with one to 200 employees.

In the poll, nine in 10 respondents want their employers to provide healthcare coverage.

Some 60 per cent of respondents said they are more willing to join an SME that has medical benefits, while almost 40 per cent are more likely to stay on in a company with such perks.

The survey shows that 13 per cent of respondents work in an SME that does not provide medical benefits.

For SMEs with 10 or fewer employees, the proportion doubles to 27 per cent.

SMEs are a key pillar of the Singapore economy, as they account for 99 per cent of businesses and employ 70 per cent of the workforce.

Many of them  grapple with high costs of operations and a talent crunch that has pushed up labour costs.

When they were asked how much budget is allocated for medical benefits every year, almost two in five SME owners said $10,000 and below.

Mr Wilson Chew, founder and managing director of smart blinds supplier, MC2, said hospitalisation expenses of Singaporeans are covered by MediShield Life.

Hence, his company does not provide healthcare insurance for employees.

Other SMEs, such as food importer Optimo Foods with seven employees, said they are too small to go for a corporate policy.

Ms Wee Su-Lyn, director of Optimo Foods, said it gives full-time staff a lump sum every year to buy their own medical insurance.

There is no statutory requirement for employers to offer healthcare insurance. Manpower Minister Tan See Leng said during a parliamentary discussion last year that employers may choose to provide such insurance as an employee benefit.

While it is not compulsory by law, these medical benefits can be a  sweetener to attract talent.

Professional engineering consultancy firm Soteria gets group medical insurance for its four employees, with director Daniel Choo saying they will not have to worry about their medical bills. 

He added that employees and their families will also feel happy that Soteria takes an interest in their health and safety, and will more likely stay on with the company.

Ms Lynn Tan, chief executive of The Powder Shampoo, also gets group medical insurance because she wants her staff to feel at ease while they are at work.

Mr Dennis Tan, CEO of Prudential Singapore, said employees are becoming more aware of their health and their need for insurance protection ever since the pandemic.

He added that an ageing workforce and rising healthcare costs are also prompting workers to value medical coverage more.

Having the necessary protection assures them that their healthcare needs are taken care of, so they can focus on their work, he said.

Group medical insurance complements an individual’s personal health insurance plan.

Prudential Singapore said personal plans may not include visits to GP or dental clinics, but these are covered under group insurance.

The insurer added that personal health plans may also cover only the individual and not his or her dependants, unlike group plans which may also cover dependants.

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