Local Employees Covered under Portable Medical Benefits Options Eligible for Higher Tax Deductions

Assoc Prof Daniel Goh Pei Siong asked the Minister for Manpower (a) how many local employees are currently covered under each of the three portable medical benefits options listed by the Ministry that are eligible for higher tax deductions; (b) how many local employees have been affected by moving from an employer providing portable medical benefits to an employer that does not; and (c) whether the Government will consider implementing a higher tax deduction limit for employers who provide medical benefits under the Transferable Medical Insurance Scheme (TMIS) for their local employees.

Ensuring that Singaporean workers have adequate medical coverage in employment and post-employment is an important priority for the Government. At the national level, the Government ensures portable medical benefits through mandatory Medisave contributions by employers and employees. These contributions will remain with the employee even after he stops work or changes employer. Tax incentives were also introduced in 2004 and 2008 to encourage provision of additional portable medical benefits on a voluntary basis at the company level.

However, the take-up rate of the voluntary portable medical benefits at the company level has not been high. Our last survey in 2013 showed that about 4% of companies employing about 20% of our local workers have done so. Even with the tax incentives, many employers prefer to continue with their own non-portable medical benefits which are more cost-effective in attracting and retaining workers who are mostly healthy adults of working age.

Moving forward, with the introduction of MediShield Life in November 2015, the tripartite partners are actively pursuing MediShield Life as the main platform for voluntary portable medical benefits provided by employers.

MediShield Life is universal and employees can pay for their premiums using Medisave contributions. With MediShield Life, all our local workers can be assured that their medical coverage, including for pre-existing illnesses, would follow them, regardless of any change in employment status or employer. More importantly, the annual claim limit has been raised significantly and the lifetime claim limit has been removed.

These enhancements have given greater assurance to workers and added impetus to tripartite efforts to encourage the voluntary adoption of portable medical benefits by companies. Of the various portable medical benefits options, our focus going forward will be to encourage employers to make additional contributions to employees' Medisave accounts. We have started by including this in the Tripartite Guidelines on Re-employment of Older Employees released in May 2016. The tripartite partners will continue to work closely to encourage more employers to offer voluntary portable medical benefits at the company level.