Health Insurance for Employees Aged 65 and Above, and Heath Checks to Determine Their Ability to Work Beyond Statutory Retirement and Re-employment Ages

Mr Yip Hon Weng asked the Minister for Manpower (a) whether the Ministry will consider leveraging on health checks to determine a senior employee’s ability to continue working instead of being guided by fixed retirement and re-employment ages; and (b) whether the retirement age can be prescribed based on the nature of the job rather than applied across the board.

MOM does not specifically track the provision of medical benefits for employees aged 65 and above. However, based on a 2019 MOM survey, most employers (~98%) do provide some form of medical benefits for their employees. About half of employers provided inpatient benefits to their resident workforce, via a mix of medical insurance, direct monetary reimbursement, or additional MediSave contribution. The remainder provided outpatient benefits only, or various medical benefits on a case-by-case basis. About 2% did not provide medical benefits.

As our workforce ages, employers’ healthcare costs are expected to increase. Furthermore, with MediShield Life providing lifetime protection against large hospitalisation bills and selected costly outpatient treatments for all Singaporeans, an employee could have duplicate insurance coverage if his employer also provides insurance.

The Tripartite Workgroup on Older Workers therefore recommended in 2019 that employers restructure medical benefits from insurance schemes to the Portable Medical Benefits Scheme, or PMBS, where employers provide additional contributions to their employees’ MediSave accounts. These additional contributions can be used by employees to pay for their MediShield Life premiums, or purchase their own insurance plans on top of MediShield Life. This reduces duplication of coverage for employees while making healthcare costs more predictable and sustainable for employers. Most importantly, it safeguards the employability of senior workers. Otherwise, employers would be less amenable to employ senior workers on account of their health.

To support employers to implement PMBS, the Government grants them a higher tax deduction limit for medical expenses incurred for employees.

The Member has also proposed that regular medical check-ups be used to determine if a worker can continue to work. If adopted, his suggestion would again create uncertainty in the employment prospects of senior workers as employers may then terminate their employment due to health reasons.

In fact, the Tripartite Workgroup on Older Workers was concerned that workers could be unreasonably denied re-employment if medical check-ups are not applied judiciously. Tripartite partners agreed that employers are to presume that their senior workers are medically fit to work, and that there is no need to send a worker for medical check-ups unless he or she shows signs of being medically unfit for the job. This agreement and guidance are documented in the Tripartite Guidelines on the Re-employment of Older Workers.

On the Member’s other query about whether the retirement age can be prescribed based on the nature of the job, this approach is currently adopted in certain situations which has more to do with regulatory requirements. These ages are all lower than the statutory retirement and re-employment ages.

The retirement and re-employment ages is still the most effective way to maintain employment of seniors. This is borne out by facts – Singapore’s average effective retirement age has risen over the past 20 years at a rate faster than the Organisation for Economic Co-operation and Development (OECD) average. Despite the COVID-19 pandemic, the employment rate of those aged 55-64 has increased from 67.6% in 2019 to 69% in 2021. The employment rate of those aged 65 and above has also increased from 27.6% in 2019 to 31.7% in 2021.