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Have you heard of PMBs?

Singapore is well known for its healthcare system globally. It attains a successful and extensive universal healthcare coverage through a mixed financing framework. Most countries have their own universal public health insurance program, some of which includes portability of medical benefits. For instance, Canada has Medicare, which has portability across provinces for 3 months until the resident registers for a new healthcare plan in their new province.

In Singapore, MediShield Life, a type of PMB, forms part of our public statutory insurance system. The idea behind PMB is simple; - it allows employees to bring their existing medical benefits with them after changing employers. This means employees will not lose their inpatient and hospitalisation benefits, even when they decide to switch firms. Workers will also retain their accumulated funds for future medical expenses, after leaving the workforce.

Implementing PMB is also a “win” for employers. While Group Hospitalisation and Surgical medical schemes were previously an affordable way to attract and retain workers, they will become increasingly costly with an aging workforce.

Let us now take a closer look at the implementation of PMBs in firms and the challenges faced by them while considering implementing PMBs in 2019, found in our Prevalence of Portable Medical Benefits (2019) presentation.

So, are more firms implementing PMBs for local employees?

In 2019, the public sector recorded a staggering 99% of implementation rate for PMB arrangements. Overall, more private sector firms (8.4%) were also implementing at least one of three PMB arrangements, up from 2.6% in 2017 for their local employees. However, the implementation rate was higher among smaller firms with less than 199 employees. This could be due to the cost of switching over from their existing group medical insurance plans. Further, given the sheer scale of the bigger firms, the re-training by and for HR personals as well as employees, may be a huge task.

Interestingly, in the private sector, construction (11.5%), transportation & storage (8.7%) were the top 2 industries in 2019, whereas in 2017, they had one of the lowest implementation rates of PMB arrangements. This increase could be due to the higher risk associated with these industries, and the greater mobility rate of their employees within the industry.

On the other hand, industries with higher concentration of professionals, managers, executives and technicians (PMETs) such as professional services and real estate services continued to rank lowest in the implementation rate of PMB arrangements. This could be due to legacy of their existing group medical insurance schemes, which might provide higher cost savings due to the scale of their insurance scheme.

How can we encourage more firms to adopt PMBs?

While PMBs have significant advantages such as tax breaks for employers and portability of medical benefits for employees across jobs, large scale implementation is not without challenges. Even as the uptick of implementation in PMB arrangements in the private sectors over the years is encouraging, a significantly higher number of firms in the private sectors (27.1%) surveyed in 2019 were still not aware of these schemes.

So, how can we encourage a higher implementation rate of PMBs given its challenges? Among those who decided not to proceed with PMB implementations, the hassle of changing to a new medical insurance scheme as well as the cost and manpower involved to effect a change was a significant drawback. In view of this, perhaps new firms would be better candidates for implementation of PMB arrangements. They would have less issues adopting a new medical scheme and no re-training issues.

Additionally, there are bright spots especially among the private sectors. 14.1% of the respondents in the private sector in 2019 were still considering the implementation of PMB arrangements. The goal is to re-energise the education process and heighten awareness of PMB arrangements for such firms who are still undecided. With this, PMB implementation rates may see significant growth in private sector firms. The continued understanding and resolution of obstacles for firms in the private sector hesitant to PMB arrangements will be the driving force behind a more successful PMB implementation in Singapore.

¹PMBS refers to Portable Medical Benefits Scheme
²TMIS refers to Transferable Medical Insurance Scheme
³Shield Plan refers to MediShield Life, introduced end of 2015

To find out more about the various indicators on medical benefits, click here.