New Mercer Marsh Benefits report uncovers alternatives to balance medical costs in Singapore

This article is brought to you by Mercer Marsh Benefits.

According to the 2017 Singapore Employee Health and Benefits Study conducted by Mercer Marsh Benefits (MMB) - a partnership between global professional services firms Mercer and Marsh - employers continue to look for ways to balance rising healthcare costs with the need to provide competitive benefit packages to attract, engage and retain employees. As a leading global consulting firm, Mercer has been at the forefront of research on key benefits issues thanks to our access to a comprehensive range of health-and-benefits-related data. Since the inaugural edition in 2005, this sixth edition showcases the benefits plans of over 400 companies in Singapore; covering more than 100,000 employees from various industries.

With the onset of medical inflation, hospital room rates in Singapore continue to increase with each year. For example, the hospital room and board benefit is typically provided in either dollar limit (e.g. $350 per day) or ward type (e.g. 1 bed or 4 bed restructured) when it comes to employer sponsored group hospitalisation insurance. The study shows that ward type plans are becoming more popular with a take-up rate of nearly 70%.

“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, Mercer Marsh Benefits.

The study covers the provision of overall group insured benefits, with most employers offering group hospitalisation, term life, and personal accident policies to employees. Additionally, over 70% of employers extend medical insurance to cover dependents, mostly with the premium fully paid by the employer.

“It is encouraging that generally employers do not only provide medical risk protection for illness or injury, but also offer financial protection for family members in the event of an extremely unfortunate incident such as death or total permanent disability,” said Narale.

However, the study also shows that employees may still find a gap in medical coverage for chronic or major illnesses (such as cancer, cardiovascular disease) from their group-insured benefits. “It is important for employees to be aware that most employers may not provide medical coverage for chronic or major illnesses. On that note, they might want to consider purchasing a personal medical insurance policy for coverage,” explained Narale.

Besides providing core group insured benefits to safeguard employees, employers are also increasingly offering flexible benefit programmes. This provides employees with more personal choice in insured benefits and well-being needs. Popular choices among the types of flexible benefits offerings include vision care, health screening and dental coverage.

Narale commented: “A great way for an employer to balance rising costs and the need to be competitive is through a well-designed flexible benefits programme. Catering to an employee’s personal needs through offering choice will come across as more competitive, but not necessarily at an increase in cost.”

For the first time, the Singapore study includes International Medical benefits as a new competitive differentiator aimed at expats and traveling employees. These plans normally extend worldwide coverage with exceptions for USA and Canada.

“Singapore has one of the largest expat white-collar populations as a percentage of the state’s total population. In addition, global and regional companies use Singapore as a base, so there are many executives traveling from here regularly,” Narale remarked.

“That is why benefits are critical (in some cases) to remain competitive and attract key talent,” he concluded.

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