Minimum medical insurance for work permit and S Pass holders in Singapore to increase from July 2023

The increased annual claim limit of S$60,000 with co-payment by employers for claim amounts above the first s$15,000 will be applied to policies on or after 1 July 2023.

From 1 July 2023, Singapore's Ministry of Manpower (MOM) will begin implementing enhancements to the mandatory medical insurance (MI) for all new and existing Work Permit (including migrant domestic workers) and S Pass holders.

Initially announced at the Committee of Supply 2022, the MI enhancements aim to better protect employers in the event of large medical bills incurred by their foreign employees.

Under the current S$15,000 coverage limit, more than 5% of bills incurred exceed this limit, potentially putting these employers under financial strain.  This proportion will only increase further over time as medical costs rise. Going forward, with a higher annual claim limit of S$60,000, larger and more bills will be covered. This will minimise out-of-pocket expenses by employers, especially amidst rising medical costs. MOM estimates that more than 99% of bills will fall within the new coverage.

The enhancements will be implemented in two stages: 1 July 2023 and 1 July 2025 for insurance policies, renewals or extensions that have a start date effective on or after these dates.

Thus, the increased annual claim limit of S$60,000 with co-payment by employers for claim amounts above the first S$15,000 will be applied to policies on or after 1 July 2023. The other enhancements will be applied to policies on or after 1 July 2025. 

The full coverage of MI enhancements are as follows: 

1. Introduction of a co-payment element for employers and insurers for amounts above S$15,000, up to an annual claim limit of at least S$60,000

Employers will continue to be fully insured (first dollar coverage) for the medical expenses of their Work Permits and S Pass holders up to S$15,000. While this ensures protection for the bulk of workers’ medical bills, there remains an average of over 1,000 employers per year who face bills that are larger than S$15,000. With higher coverage, insurers will also co-pay 75% for amounts above S$15,000, up to an annual claim limit of at least S$60,000. 

2. Standardisation of allowable exclusion clauses

This provides employers and workers with greater clarity on their coverage and the types of claims they are eligible for. The list of allowable exclusions can be found here.

3. Introduction of age-differentiated premiums

Insurers who sell MI products will have to offer differentiated premiums for those age 50 and below, and those who are above 50 years old. This keeps premiums affordable as the large majority of migrant workforce are aged 50 years and below.

4, Requirement for insurers to reimburse hospitals directly upon the admissibility of the claim

Employers will not need to pay for their workers’ hospital bills upfront before seeking reimbursement from their insurers. This will help free up cashflow for households and businesses, especially for employers who may be cash-strapped.

The enhancements and their respective implementation dates can be found here, along with illustrations of the co-payment arrangement and list of allowable exclusions.

MOM has considered feedback from employer groups, insurers and industry partners in preparing the implementation approach, which phases out the enhancements and the cost impact and provides time for both employers and insurers to adjust to the changes. With many insurers expressing interest to offer enhanced MI products, employers should have a range of insurers to choose from.

On the enhancements, Sim Gim Guan, Executive Director, Singapore National Employers Federation (SNEF), said: “The enhancement to the medical insurance for Work Permit and S Pass Holders will better protect employers against large unexpected medical bills incurred by their foreign employees. The risk-pooling and the phased implementation will help ease transition for employers, particularly those of smaller businesses, amid rising manpower and business costs.”

Alan Tan, Vice President (International Relations), Association of Small & Medium Enterprises (ASME), added: “The proposed enhancements to the medical insurance for Work Permit and S Pass Holders will in some way address the rising medical costs for employers and provide greater protection for businesses when managing their expenses, amid an uncertain economic environment.”

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