MediShield Life review: Employers urged to adopt portable insurance

SINGAPORE - Employers and unions should work together to introduce portable medical benefits for their employees, said the MediShield Life Review Committee which released its report on Friday.

The move would reduce duplication of coverage between employer medical benefits and MediShield Life, the committee said.

A portable medical insurance scheme encourages employers to take the sum budgeted for group insurance premiums and give it to workers individually instead. Workers can then use this money to upgrade to Integrated Shield Plans that offer better benefits and wider coverage if they wish.

Portable insurance benefits workers because they are still in force even after they quit their companies, unlike employer benefits.

To promote portable medical benefits, the committee also recommended strengthening incentives to companies willing to provide portable medical benefits that ride on Medishield Life. This would offset costs involved in restructuring employer medical benefits.

"The Government can consider improving corporate tax incentives or providing grants to encourage more companies to switch to offering their employees portable medical benefits," the committee said.

Today, less than one in 20 employers offer portable medical benefits though there are tax incentives for companies that do. There are obstacles in getting more to adopt it.

Based on focus group discussions, the committee found that benefits under Group Hospitalisation and Inpatient plans were currently more attractive than those provided by MediShield and Integrated Shield Plans. These plans offer a higher perceived value to employees, yet at relatively low cost to employers, especially if employees were mostly young and healthy. But such plans also tend to be lower-cost because they provide short-term coverage and are not guaranteed renewal, the committee noted.

"However, we are encouraged that some employers have made the shift towards portable medical benefits and more employees have begun to recognise the importance of long-term health coverage," it added.

The call for portable medical benefits is in line with recommendations from the National Wages Council, the National Trades Union Congress and the Singapore National Employers Federation.

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