Employer-related Benefits for Singaporean and Foreign Employees According to Employee Skill Level

Dr Chia Shi-Lu asked the Minister for Manpower (a) whether the Ministry has data regarding the prevalence and level of employer-related benefits for Singaporean and foreign employees, according to the skill level of the employee; and (b) whether any progress has been made, in conjunction with other stakeholders, to make health benefits for employees more portable.

Government subsidies and the 3M (MediSave, MediShield Life, MediFund) framework provide for the basic healthcare needs of all Singaporeans. Additionally, more than 90% of employers provide company medical benefits to local employees, covering either inpatient costs, outpatient costs, or both.

Today, fewer than 4% of employers provide portable medical benefits to their employees, such as by making additional MediSave contributions. More than half of all employers provide medical benefits via Group Hospitalisation and Surgical (GHS) medical schemes, where insurers cover their employees' inpatient medical fees.

While GHS schemes were previously an affordable way to attract and retain workers, they will become increasingly costly with an ageing workforce. Furthermore, with the introduction of MediShield Life for all Singaporeans in 2015, employees have duplicate insurance coverage if their employers also provided GHS or other forms of inpatient medical benefits. This is why the Tripartite Workgroup on Older Workers has recommended that employers restructure medical benefits to provide additional MediSave contributions or other such flexible benefits. Employees could then use such benefits to purchase portable medical benefits, such as Integrated Shield Plans that ride on MediShield Life.

The Government has taken steps to encourage employers to adopt portable medical benefits. For example, while the normal tax deduction limit is 1%, employers can enjoy up to 2% tax deduction for medical expenses of total employees' remuneration if they provide additional MediSave contributions. The limit for additional MediSave contributions was also raised to $2,730 per employee per year in 2018.

For foreign employees, MOM requires employers of Work Permit and S Pass holders to bear the cost of their medical treatment, and purchase and maintain medical insurance of $15,000 per year for each worker for inpatient care. Employers are not required to bear the cost of medical treatment for Employment Pass holders, although most of them would typically provide healthcare benefits as part of the employment package.