By TEH SHI NING

THE Ministry of Manpower (MOM) yesterday announced changes to the medical insurance requirements and security bond conditions that employers of foreign workers must meet.

The minimum medical insurance coverage employers of foreign work permit holders, including domestic workers, must purchase will triple from $5,000 to $15,000, from Jan 1 next year.

This move aims to reduce employers' exposure to large hospital bills, and comes in response to feedback from hospitals and the Ministry of Health that the current minimum coverage was no longer adequate.

The possibility of such a change was first raised in March by Health Minister Khaw Boon Wan, who cited several cases of employers having to fork out huge sums to pay for their maids' medical expenses.

While the previous minimum medical insurance coverage of $5,000, made mandatory in 2008, covered nine in 10 foreign workers' medical bills, the new $15,000 minimum is expected to cover up to 98 per cent of cases.

Insurers told BT that it was too early to given an indication of the additional premium that employers would have to fork out to meet the new requirement. NTUC Income said that it would enhance its current insurance plans for foreign workers to reflect MOM's changes, 'with a view to keeping their benefits and rates competitive', and would announce details before January.

Under its current schemes, Great Eastern's insurance plans allow for employers of maids to opt for an additional $10,000 in coverage by paying a top-up premium of $100. Premiums on plans for maids range from $180 to $255 for a 26-month period, while under its group insurance scheme, foreign workers' annual insurance premiums range from $50 to $100 per worker.

At present, there are 870,000 work permit and S-pass holders in Singapore, including 190,000 domestic workers. Of these foreign workers, 230,000 are in the construction industry.

This move will raise business costs, said Simon Lee, executive director of the Singapore Contractors Association Ltd, which represents over 200 construction firms. Though the increase would not be a substantial percentage of overall labour costs, the extra cost would have to be paid upfront and could rise further should there be a claim against the policy, he said.

Yesterday, MOM also revised conditions tied to the $5,000 security bond which employers are required to furnish for all non-Malaysian work permit holders hired, including domestic help.

Prompt payment of salaries has been included as a new security bond condition, to address the issue of salary arrears. MOM handled complaints relating to unpaid salaries from 4,500 foreign workers in the first half of 2009 - a 40 per cent jump from the second half of 2008.

Other conditions have also been revised to remove the employers' liability in situations which are out of their control. Should workers themselves violate work permit conditions - such as those relating to marriage to a resident, or pregnancy - employers will no longer be penalised as long as they inform employees of the terms and report any breach they know of to the authorities.

Also, if a worker absconds, the employer will forfeit half the $5,000 security bond instead of the full amount, as long as reasonable effort is made to locate the missing worker.

This article was first published in The Business Times.