Employers in Singapore struggle to balance rising healthcare costs and the need to give attractive, competitive benefits to their workers, a study found.
Companies now lean toward ward-type plans for hospitalization, flexible health packages and non-coverage of chronic or serious illnesses even as they try to cover medical insurance of their workers' dependents and provide international coverage for expatriates.
Medical inflation has jacked up hospital room rates in Singapore, according to the 2017 Singapore Employee Health and Benefits Study conducted by
Mercer Marsh Benefits.
Because of this, more companies are opting for ward-type plans over dollar-limit plans, for the room-and-board benefits under group hospitalization insurance.
Ward-type plans have a take-up rate of 70%, MMB found.
"With ward type plans, employers can ensure that their benefits keep pace with medical inflation without having to re-adjust the limit for every policy renewal” explained Neil Narale, Singapore Business Leader for Mercer Marsh Benefits.
The study also found that most employers, despite rising costs, continue to extend medical insurance to their employees' dependents. Over 70% offer financial protection to family members in the event of an extreme incident such as death or total permanent disability,” said Narale.
But employees with chronic or major illnesses cannot count on coverage for these conditions. "They may have to consider purchasing a personal insurance policy for coverage,” she added.
Another emerging trend is the provision of well-designed flexible benefits programs that include vision care, health screening and dental coverage.
"Catering to an employee's personal needs through offering choice will come across as more competitive, but not necessarily at an increase in cost” explained Narale.
The study also included the provision of international medical benefits as a new competitive differentiator aimed at expats and traveling employees. These plans normally extend worldwide coverage with exceptions for US and Canada.
"Singapore has one of the largest expat white-collar populations in the world as a percentage of its total population. In addition, global and regional companies use Singapore as a base, so there are many executives traveling from here regularly,” explained Narale.
The study covers the provision of overall group insured benefits, with most employers offering Group Hospitalization, Term Life and Personal Accident to employees.
Four hundred employers covering more than 100,000 employees in all major industries were included in the study.
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