Portability is a feature in insurance policies, which allows you to switch between insurers depending on your choice, without worrying about any loss of coverage. Usually, you can port your insurance plan from one company to another at the time of paying the renewal premium. Let’s take a look at important things you need to know about health insurance portability in Singapore:
HIPAA (Health Insurance Portability and Accountability Act), 1996
Moving from one health insurance company to another is possible with HIPAA (Health Insurance Portability and Accountability Act), which came into effect in 1996 in the United States of America. This has become a kind of standard for global portability guidelines.
It covers two crucial aspects of healthcare. Firstly, you can discontinue a health insurance policy at any time and switch to another health insurance policy. Secondly, all the medical history/information must be kept confidential. The policy is designed to protect these records from misuse.
You can port both your personal and employer-provided health insurance policy in Singapore. Switching insurers is possible for a personal health policy if you have an Integrated Shield Plan alongside your mandatory MediShield Life policy. All you need to do is put a porting request with the new insurer and submit the requisite documents. You may or may not have to undergo a medical test, depending on the terms of the new insurer.
Things to consider before porting your health insurance policy
Portability of health insurance policies is beneficial because you can switch to better coverage and benefits. However, it requires careful consideration keeping in mind that you cannot go back to your previous policy issuer. Here are a few things to consider:
- Switch only if the next insurer has some benefit that your current insurer isn’t providing.
- Check the costs associated with porting, and the new premium amount. If the new insurer’s premium is higher, without any additional privileges, then it is better not to switch.
- Check if you would be required to undergo a medical test again, and if all the illnesses covered under your current plan, including pre-existing diseases, are part of the new plan as well.
- Check the exclusions of the policy, including the pre-hospitalisation and post-hospitalisation periods for which reimbursements could be made.
- Ensure that there is little or no waiting period involved before you can make a claim.
Portability of employer-provided insurance
Portability of medical benefits means that even when you change your employer, there are certain medical benefits that you can carry with you to the next job. However, these are not applicable for all medical facilities. The Ministry of Manpower, Government of Singapore, allows you to implement certain portable medical schemes for your employees, all of which have portability benefits.
Types of schemes
Employers have a choice between three portable medical schemes –
- PMBS – Portable Medical Benefits Scheme
- TMIS – Transferable Medical Insurance Scheme
- Integrated Shield Plan (ISP) or MediShield Life plan
Let us look at the details of these schemes:
Portable Medical Benefits Scheme (PMBS)
- As employers, you will need to contribute additionally to the Medisave account of your employees every month.
- As an employee, you could use this amount for your inpatient needs through ISPs or as premiums for MediShield Life.
- The employer’s contribution for a full-time employee should be a minimum of 1% of their salary every month, or S$16, whichever is more.
- The employer’s contribution for a part-time employee should be 1% of their gross monthly wages.
Transferable Medical Insurance Scheme (TMIS)
- This is an advanced insurance for surgeries and hospitalisation.
- After an employee leaves the job, they will be able to enjoy inpatient coverage for up to 1 year.
- There is no caveat on coverage for pre-existing illnesses even if you change jobs, provided that the new employer also subscribes to TMIS. The plan will continue uninterrupted.
- You could provide either an ISP or MediShield Life plan for your employees, by paying the premium required for the chosen plan.
- Payment can be made in the following ways:
- Paying instead of the employees directly to the insurer
- Reimbursing the premium amount by putting it in the employee’s Medisave account
- For employees who are not working for the entire financial year, the premiums could be prorated according to their employment period.
- In case your employee has an existing ISP and is not interested in switching, the premium amount can be credited to the Medisave account of the employee.
Ad-hoc Medisave contributions
- Even if you do not implement any of the above policies for your employees, you can save 2% on taxes if you make additional contributions to Medisave.
- You can contribute up to S$2,730 for each employee annually. Employees do not have to pay tax for these contributions.
Incentives for employers
As an employer, you can get either tax exemption or deduction if you allow your employees to maintain their medical cover. To determine your tax, all the tax-deductible medical expenses will be deducted from your income. When you subscribe to any of the government medical schemes for your employees, you could gain more than the regular tax-exemption, which is 1%. In order to be eligible for the 2% tax deduction, you need to do one of the following:
- Implement PMBS for a minimum of 20% of the local employees.
- Implement TMIS for a minimum of 50% of the local employees.
- Give at least 20% of your local employees a Shield plan.
- Implementation should be from the first day of the assessment year.
Other things you need to know about health insurance portability
- Employees can keep the medical benefits even when they change jobs.
- Employees can choose to move from ISP to MediShield Life anytime.
- Employers are allowed to use separate medical benefits plan for different groups of employees.
- If employers have made contribution to CPF exceeding the set amount, the extra amount will be refunded.