Pros and Cons of Conventional Corporate Healthcare Plans
“Employees are a company’s greatest asset,” says Anne M. Mulcahy, former Chairperson and CEO of international company, XEROX Corporation, and that was said for good reason. Employees have a direct impact on a company’s quality and productivity, and investing in their well-being can attract and retain much-needed talents. In Singapore, companies express their care in the form of group medical insurance as part of their employee benefits package. In our previous article, we have briefly mentioned and talked about the most common healthcare plans: Group Hospital Plan, Group Outpatient Plan, Group Personal Accident Plan, and Group Term Life Plan. If your eyes have been glazing over every time your ever-patient insurance agent has tried to explain to you about the various plans, here is a five-minute no-technical jargon overview of the two most popular plans:
Group Hospital Plan
Of the entire Singapore corporate healthcare pie, group hospital plans make up the biggest slice because most insurers here offer it as a base plan (think of it as the crust of your pie). It can be purchased as a standalone plan, and it provides coverage for medical expenses that arise from hospitalisation, surgery or accident. Intensive Care Unit (ICU), room and board, and ambulance services are some of the standard benefits. Such plans generally do not include General Practitioner (GP) consultation. So if you have a flu and you want to visit a clinic near to you, chances are: tough luck, buddy. Your company is not picking up that tab.
Pros: Your company insurance can help cover a significant part of often hefty hospital bills, giving your employees peace of mind in times of unexpected serious accidents or health issues.
Cons: Your employee has to pay for visits to the doctor for milder (and let’s face it, more frequent) illnesses like a flu or a cough. (Also, this might mean that you could be paying for healthcare benefits that are underutilised.)
Group Outpatient Plan
Group outpatient plans are also immensely popular, especially amongst employees, simply because they are so much more relevant in one’s daily life. They cover visits to the GP, X-Ray, laboratory tests, and A&E department of hospitals. Why this is not more widely adopted is because it is usually only available as a rider to a base plan, i.e., an add-on to a plan that you already have or intend to purchase. Also, while multi-national corporations (MNCs) may be able to afford the additional cost, it could be a significant financial strain on Small and Medium Enterprises (SMEs).
Pros: Your employees will truly (and more frequently) experience the benefit of your company’s healthcare insurance because ditto.
Cons: Cost will most definitely be higher if you “ride” an outpatient plan on your base plan.
Regardless of the type of plan you decide to go with, the amount you pay for your healthcare plan is called a premium, and payment can be made monthly or annually. It is usually affected by factors such as:
Number of employees on the plan
Age group of employees (usually, the younger an employee is, the lower the premium is)
Choice of private or public healthcare institutions
Extent of coverage (e.g. 75% vs 100% bill coverage)
Sum assured (the guaranteed amount an insurance holder will receive)
As the owner or HR manager of a company, we know you want to try to provide the best that you can for your employees without being in the red. For healthcare plans to be effective and cost-saving, they really should be tailored to every company. This article is meant as a simplified guide to help you start understanding your company’s healthcare needs better.