Starting from July 1, 2023, the Ministry of Manpower (MOM) will initiate improvements to the compulsory medical insurance (MI) coverage applicable to both new and existing Work Permit holders, including Migrant Domestic Workers, as well as S Pass holders.
As previously communicated, these MI enhancements are aimed at affording employers’ greater protection in cases where substantial medical expenses are incurred by their foreign employees. Under the current coverage limit of $15,000, over 5% of medical bills exceed this threshold, potentially causing financial strain for employers. With the ongoing increase in medical costs, this proportion is expected to rise even further. The introduction of a higher annual claim limit of $60,000 will encompass a broader range of medical expenses, ultimately reducing out-of-pocket expenditures for employers, especially in light of the escalating healthcare costs. Our estimation indicates that over 99% of medical bills will now fall within the new coverage, providing employers with peace of mind.
Phased Implementation Strategy
To facilitate a smooth transition, these enhancements will be rolled out in two phases, commencing on July 1, 2023, and subsequently on July 1, 2025. These changes will apply to insurance policies, renewals, or extensions with effective start dates on or after the mentioned dates. The enhanced annual claim limit of $60,000, with co-payment required by employers for claim amounts exceeding the initial $15,000, will be enforced for policies effective on or after July 1, 2023. Additional enhancements, such as the standardization of allowable exclusion clauses, age-differentiated premiums, and direct reimbursement by insurers, will come into effect for policies effective on or after July 1, 2025. Further details on these enhancements and their respective implementation dates are provided in the Annex, along with illustrations of the co-payment arrangement and a list of allowable exclusions.
MOM has taken into account feedback from employer associations, insurers, and industry partners in devising this phased implementation approach, which aims to ease the impact on costs and provide an adjustment period for both employers and insurers. With a considerable number of insurers expressing interest in offering enhanced MI products, the market is expected to become competitive, providing employers with a variety of insurance options to choose from.