Finance & Insurance, Reviews

Difference between Employee Benefits & Shield Health Insurance plans

Employment situation in Singapore

In Singapore, it’s always a battle to hire & retain productive employees. Even when the economy is bad, the Singapore workforce has always managed a decent level of income due to our adaptibility and skill levels.

It is this reason that job hopping is very common amongst Singapore employees. The 2 main reasons to job-hop these days are a more attractive pay package & dissatisfaction with their immediate superior.

It’s therefore a battle for HR managers to keep productive employees and their managers, or in fact, the whole team! Once an employee reaches a certain pay-grade, they start to look at other factors in deciding whether they’d job-hop.

The Singapore workforce is a very pragmatic group of people. All of us know that medical bills are just going to get higher. This is due to better treatment becoming available that treats our lifestyle illnesses with less side-effects. We also know that our income increment cannot keep up with medical inflation.

All Singaporeans and PRs have already transferred the risk of major hospital bills to either MediShield Life or other Shield plans but these plans have deductible & co-insurance. If there’s a way to transfer those risks as well, wouldn’t it be perfect?

Employee Benefits

Enter insurers’ Group insurance.

All employees of Multi-Nation Corporations (MNCs) have it and many SMEs are enrolling their staff as well. Employees in companies that provide these Group insurance typically show more loyalty, take less MC and are generally more productive.

Basically, buying an insurance is a way to show love. It’s the same with employers as well. 🙂

The common Employee Benefits include Group Term Life, which covers Death and Total & Permanent Disabilities; Group Critical Illnesses; Group Personal Accident; and most interestingly Group Hospital & Surgery (GHS).

For the purpose of this article, I’d only touch on the difference between GHS & a typical Shield plan.

GHS Benefits

Group Hospital & Surgery is actually a collection of insurance policies instead of a big policy that covers everything. The main reason to do this is of course, company budget. Taking up all the benefits of a GHS plan is obviously not cheap in light of the medical costs in Singapore.

I wouldn’t be going into so-called International Health plans that companies buy for upper management or expatriates as these are 2-3 times more expensive that a comprehensive GHS plan.

In summary, GHS is made up of:

  • Hospital & Surgical benefits, which covers Inpatient treatments including day-surgeries
  • Specialist Outpatient benefits, which covers Specialist Treatment that don’t require admission to a medical facility
  • Medical card, which covers normal GP clinics participating in the insurer’s plan or we call ‘panel clinics’
  • Extended Major Medical benefits, which covers hospitalisation that is more than 20 days. This benefit usually comes with a 20% co-insurance.

Companies may mix and match these benefits according to their trade and the perceived needs of the employees, and of course, their annual budget as well.

GHS Limitations and how they compare with Shield plans

Now it’s important to note that GHS doesn’t cover everything. In my line of work, I have heard lots of clients and prospects say their company will cover all their hospitalisation bills. This is simply not true for the majority of employees.

A lot of times, what the employer meant is, they can issue a letter of guarantee to the hospital, which is not the same as the entire bill is covered. A letter of guarantee basically means that the company will bear the upfront costs of the hospitalisation. After that, the company will claim from GHS. If the limits are exceeded, they will recover it via staff medical benefits, followed by deducting from the employee’s salary. Obviously, different companies have different procedures so check with your HR manager.

In Singapore, GHS is now seen as a supplementary medical insurance to the Shield plans because Shield plans covers the really big bills while GHS covers from the first $1 to a small sized hospital bill. A typical GHS plan should be able to cover the the Shield plans’ deductible and co-insurance BUT even a high-end GHS plan will NOT be able to cover an extended stay at a Private Hospital in Singapore.

Take a look at the chart below, prepared by my friends at AIA Corporate Solutions. The information is accurate as of 15 September 2015 so it may have gone up. Look at the room charges for Private Hospitals! Also, GST is NOT included!

Ward Type 1-bedded 2-bedded 4-bedded 5-bedded 6-bedded Open
A1 A2 B1 B2+ B2 C
Citizen NA NA NA NA 63.55 29.91
Permanent Resident NA NA NA NA 123.36 81.31
Foreigner NA NA NA NA 231.96 207.01
Citizen 401.87 NA 224.30 NA 71.03 36.45
Permanent Resident 401.87 NA 251.40 NA 128.97 81.31
Foreigner From 401.87 NA From 287.85 NA From 252.34 From 207.48
Citizen 392.52 NA 185.05 71.96 NA 32.71
Permanent Resident 392.52 NA 222.43 127.10 NA 70.09
Foreigner 392.52 NA 231.78 230.84 NA 175.70
Citizen 420.00 NA 235.00 160.00 75.00 35.00
Permanent Resident 420.00 NA 306.00 242.00 154.00 104.00
Foreigner 462.00 NA 409.20 400.40 383.90 332.20
Citizen 440.00 264.00 210.00 NA 70.09 38.32
Permanent Resident 440.00 264.00 236.00 NA 128.04 85.05
Foreigner 440.00 316.80 286.00 NA NA NA
Citizen 402.80 NA 210.28 NA 68.22 33.64
Permanent Resident 402.80 NA 237.38 NA 117.76 75.70
Foreigner 402.80 NA 263.55 NA 209.35 180.37
Citizen 392.52 262.62 210.28 NA 70.10 to 78.50 39.25
Permanent Resident 392.52 262.62 235.51 NA 121.50 to 131.78 86.92
Foreigner 392.52 262.62 248.60 NA 219.62 to 225.23 203.74
Citizen 400.00 NA 225.00 NA 70.09 32.71
Permanent Resident 400.00 NA 254.00 NA $135.51 to $174.81 $88.79 to $140.37
Foreigner 440.00 NA 300.00 NA 257.00 230.00
569.16 307.48 242.06 NA NA NA
532.00 288.00 209.00 NA 148.00 NA
598.13 317.76 265.38 NA NA NA
598.13 NA NA NA NA NA
530.84 285.05 224.30 NA NA NA
588.00 300.00 231.00 NA 168.00 NA
530.00 288.00 209.00 NA NA NA

Many of the GHS plans that companies have bought over the years can no longer keep up! So, many Singaporeans & PRs simply rely on their Shield plans. However, many Foreign professionals will have to fork out money from their own pocket, which will come as a rude shock!

Take a look at the difference between a typical GHS & our AIA HealthShield Gold Max A.

Benefits Typical GHS HealthShield Gold Max A
Daily Room & Board $460 (Max 120 days) As charged
Daily Intensive Care Unit $920 (Max 30 days) As charged
Other Hospital Services
(Including implants)
$5,000 As charged
Surgical Benefit
(Surgeon’s fee more than $1500 subjected to Surgical Schedule in Private Hospital)
$10,000 As charged
(No surgical table requirement)
Daily In-hospital Doctor’s Consultation $60 As charged
Pre- & Post-Hospital bills $1000
(90-days before admission & 90-days after discharge)
As charged
(100-days before admission & 100-days after discharge)
Emergency Accidental Outpatient Treatment $1,500 NIL
Geographical coverage Worldwide Singapore
Death Benefit $10,000 $5,000
Outpatient Kidney Dialysis & Cancer treatment $10,000 As charged
Rehabilitation Benefit $5,000 As charged
Pre-existing condition Waiting period of 1 year NIL
Living Donor Organ Transplant (As the donor) NIL $60,000 per transplant
Living Donor Organ Transplant (For 3rd-party who’s the donor) NIL $60,000 per transplant
In-patient Psychiatric Treatment NIL $5,000
Deductible & Co-Insurance NIL $3500 deductible & 10% Co-insurance in Private Hospital
Waiver of per Benefit limits in Singapore Government Hospital Yes
$20,000 overall limit
Not applicable
Maximum age of coverage 70 (last birthday) Lifetime
GST claimable No (for older plans) Yes

From the table, you can see that GHS is a good supplementary plan to Shield plans, especially for employees who travel a fair bit. But as a standalone plan, it simply isn’t sufficient to cover all the bases.

GHS Claims

For companies that issue Letter of Guarantee, it is fairly simple for employees. Just produce the letter at the point of admission. Most of the time, however, Singaporean & PR will just claim from their Shield plans and submit any shortfall to their company for claims.

For Foreigners, you’d have to settle the full bill upon discharge unless, you’re covered under something similar to AIA GHS with Express Claims Process where the Hospital’s Business department will contact AIA Claims department for a fast-track assessment to settle some of the bills upon discharge. Just take note that this facility is only available during working hours from Monday to Friday for AIA. Please check with your HR manager to see if your company is covered this way.

At this time, I’d like to mention that GHS is a General Insurance where risk underwriting is based on indemnity. What this mean is, General Insurance covers assets & liabilities, which has a cap on the dollar value, unlike Life Insurance where a life is priceless and there’s no upper limits to that life.

During claims, Group Insurance claims officers will based their claims assessment 100% on the policy wording with no exceptions. Therefore, it’s much harder to appeal for increased claims payout, even the so-called ‘good-will’ claims.

On top of that, a company at most will have thousands of employees and insurers will try their best to make sure the policy is profitable to them. So during appeals, insurers will also look at the claim experience of the company, i.e., how much is claimed so far, versus how much premium was collected from the company for that year.

This contrasts greatly with Life insurance where the portfolio is MUCH bigger so even a $100,000 medical claim isn’t going to make the portfolio unprofitable. And since Life is priceless, Life Insurers in Singapore are much more willing to bend the rules to pay claims.

This is the reason why, even within the same insurance company, the same claim can be rejected by their Group insurance but accepted by their Life insurance claims department.

Which is why I always advise Foreigners to also get a personal Hospitalisation Insurance in Singapore. What if you’re so sick, you can’t go back to your home country for treatment because the airline wouldn’t allow it?

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