Technology firm Canon Singapore is the latest to embark on a portable medical benefits scheme, joining at least 100 firms here which have taken this approach in place of a regular group health insurance plan.
Company medical benefits cover a person only when he is working for that particular employer, but portable schemes stay with an employee for life.
Instead of paying for group insurance, firms can contribute to their employees' Medisave account - to help with MediShield or MediShield Life premiums - or help them upgrade to private Integrated Shield Plans, which cover them for higher-grade wards.
Canon Singapore president and chief executive Kensaku Konishi told The Straits Times: "Most of the firms that implement the portable scheme fund only the premiums for the Integrated Shield Plans.
"Canon has gone one step further. For existing staff, we fund the premiums for MediShield Life, the Integrated Shield Plans and the rider."
At least 700 employees - Singapore citizens and permanent residents - are now under the scheme, while its foreign staff are under group insurance.
The portable scheme behaves like a comprehensive health insurance plan - Medisave-approved and integrated with MediShield.
Employees can take the plan with them when they leave the firm, without losing benefits or undergoing further underwriting.
Those under the scheme can continue paying for premiums using funds from their Medisave account, or until they join another employer that supports the scheme.
Canon made the move last month and is the first company to implement the portable scheme after the compulsory national health insurance scheme MediShield Life started on Nov 1 last year .
Portable insurance has been around for more than 10 years, but firms are reluctant to switch, citing cost and administrative issues, among other matters. The average cost per employee for group insurance could be about $200 to $300, and differs from firm to firm.
However, helping employees out with Integrated Shield Plans would encourage them to invest in such plans when they are still young and healthy.
Mr Konishi agreed wholeheartedly: "It is good for our employees as the coverage is more extensive. The total cost of medical insurance in Singapore will be reduced, as it avoids duplication."
Portable medical benefits made a splash after the MediShield Life Review Committee suggested in 2014 that more tax incentives and grants be made available for companies to take up the scheme.
This reduces duplication of coverage between employer medical benefits and MediShield Life.
Mr Konishi said there will be costs to bear in the transition period but, in the long run, the portable scheme helps to stabilise insurance costs for the firm.
He noted that group medical insurance premiums can fluctuate from time to time, and estimates that costs have increased 20 per cent to 30 per cent each year.
The average employee age is also rising - from 37 in 2007 to about 40 today - and since such trends will continue, the firm has to take some counter measures, he added.
"Because of the cost-bearing issues, not many companies have moved to this MediShield Life-integrated system. If Canon does it now, it is beneficial as an incentive for good employees to stay with the firm. That is part of our philosophy - to grow with our staff," said Mr Konishi.
This article was first published on May 7, 2016.
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