Country Panel Session Singapore Boston, MA USA September 11-13 Ms. Irena Tan Assistant Manager Employee Benefits & Healthcare Content Singapore - Profile & Fast Facts Introduction to AVIVA Singapore Social Security Workmen Injury Compensation Act (WICA) Market Trends & Developments
Singapore: Profile & Fast Facts Singapore is Southeast Asia s Financial Hub & the World s busiest container port Area: 710.3 sq kilometers Overall GDP: 5.4% Unemployment: 2.0% Total Population: 5.18 m (Resident: 3.79 m) Total Population Growth: 2.1% (Resident: 0.5%) Languages: English, Chinese, Malay & Tamil Literacy: 96.1% - residents over age 15 Ethnic Ratio: Chinese: 74.1% Malay: 13.4% Indian: 9.2% Others: 3.3% Company Profile of Aviva Group World s 6th largest insurance group We are the UK s largest insurer and one of Europe s leading providers of life and general insurance. Aviva provides 43 million customers with insurance, savings and investment products. We combine strong life insurance, general insurance and asset management businesses under one powerful brand Credit rating (Insurance Financial Strength Rating) as of 13 July 2011 are as follows: S&P : AA- Moody's: Aa3 AM Best: A
Company Profile of Aviva Singapore Island wide networks of distributors Area of expertise includes protection, savings, funds management and general insurance General Insurance Protection & Health Savings & Investment Employee Benefits & Healthcare Car Insurance Whole Life Endowment International Plans Home Insurance Term Life ILPs Domestic Plans Travel Insurance Disability Unit Trust (Navigator platform) Medisave-Approved Shield Plan Global H&S Plan Company Profile of Aviva Singapore Approved insurer to offer Medisave- Approved Integrated Plan Appointed insurer for MOH s ElderShield scheme Appointed insurer for SAF since 1984 One of the largest provider of employee benefits & healthcare in Singapore
Company Profile of Aviva Singapore Employee Benefits & Healthcare Aviva Singapore is one of the market leaders in the Employee Benefits and Healthcare insurance market in Singapore covering over 600,000 employees in Year 2011 Cover more than 570,000 employees 2,450 corporate accounts and 120,000 Singapore Armed Forces Group Term Life policyholders An IGP Network Partner since 1984 Company Profile of Aviva Singapore Employee Benefits & Heathcare comprehensive range of solutions to cater to Employees differing needs under the local policy Dread Disease Disability Income Personal Accident Major Medical Employee Benefits & Healthcare Term Life Medical Maternity Dental
Social Security Central Provident Fund (CPF) Scheme Medisave Medishield Medifund Social Security / Central Provident Fund (CPF) CPF (3Ms) Medisave Introduced in 1984 A compulsory savings scheme 6% to 8% of monthly salary into a personal Medisave account With effect from 01July 2001: Minimum Sum increased from S$32,000 to S$38,500 & to be adjusted every July Contribution ceiling S$42,500
Social Security / Central Provident Fund (CPF) CPF (3Ms) Coverage under Medisave Hospitalisation expenses incurred in 6-Bed or Open class wards in restructured hospitals Maternity charges (pre & during delivery) Approved outpatient treatments like chemotherapy, radiotherapy and dialysis Approved day surgeries Psychiatric treatment Approved community hospitals, convalescent hospitals, hospices and day care at day rehabilitation centres Premiums for Medisave-approved & Medisave-approved Integrated schemes Social Security / Central Provident Fund (CPF) CPF (3Ms) Outpatient Treatments payable under Medisave Outpatient treatments of the following chronic diseases: Diabetes From 1 October 2006 Hypertension, Lipid disorders From 1 January 2007 (e.g. high cholesterol) and Stroke Asthma and Chronic Obstructive Pulmonary Disease (COPD) From 1 April 2008 Mental illness (schizophrenia and major depression) From 1 October 2009
Social Security / Central Provident Fund (CPF) CPF (3Ms) Basic Medishield - Introduced in 1990 - Catastrophic medical insurance scheme - 6-Bed or Open class wards in restructured hospitals - Subject to deductible & co-insurance - Premiums paid from Medisave account Social Security / Central Provident Fund (CPF) Changes to Private Medical Insurance Scheme (PMIS) Restructured as Enhancement Plans on top of MediShield so that it is seamless and transparent to policyholders. Integrated Plans was commenced with effect from 01July 2005 Cherry-picked flow MediShield Original Structure PMIS * Plan A PMIS * Plan B Revised Industry Structure PMIS * Plan A MediShield PMIS * Plan B Fragmented plans Basic insurance tier (For Class B2 & C)
Social Security / Central Provident Fund (CPF) CPF (3Ms) Medifund - Set up in April 1993 with S$200mil capital injection - Government set-up endowment fund from budget surpluses - Singaporean patients who cannot afford subsidised bill charges despite Medisave & Medishield coverage - Medifund Silver launched in November 2007 for elderly Singaporean patients Social Security / Central Provident Fund (CPF) Eldershield Introduced by the Ministry of Health as a Disability insurance scheme For all Singaporean & SPR who reach age 40 Opt-Out scheme Payout: up to a maximum of $400 per month subject to maximum period of 72 months.
Social Security / Central Provident Fund (CPF) Eldershield (Cont d) Unable to perform any 3 of the Activities of Daily Living (ADLs) Bathing Dressing Feeding 6 ADLs Transferring Walking Toileting Ministry of Manpower (MOM) Mandatory Scheme Work Injury Compensation Act (WICA) Protects all employees engaged in a contract of service or apprenticeship Enforced by the Work Injury Compensation Department, Ministry of Manpower (MOM) Cover against injury in a work related accident, including contracting occupational disease, claimable: Medical expenses Paid medical leave Paid hospitalization leave 2/3 of wage up to a maximum period of 1 year from date of accident Compensation for death and permanent disability
Term Life Insurance Personal Accident Medical Insurance Disability Income Critical Illness Group Term Life Sum assured extended on multiple of Salary 24-hour world wide coverage Coverage: Death (100% of sum insured) Total Permanent Disablement (TPD) (lump-sum S$200,000, balance in 3 equal annual installments) Terminal Illness 100% advance subject to max. of S$200,000 upon certification of high probability of death within 12 months. Balance in one lump sum upon death in the next 12 months from date of diagnosis or earlier Extended Benefit employment terminated on medical grounds, cover extended for 12 months from date of termination of employment subject to policy terms & conditions
Group Personal Accident A stand-alone policy or a rider to a Term Life policy Sum assured extended on multiple of salary 24-hour world wide coverage Allow Optional top-up cover with premiums paid by employees Coverage Death - 100% of sum assured Total Permanent Disablement and Dismemberment - Percentage of sum assured as per schedule of indemnities Life Insurance Funding Employee - 100% paid by Employer - Full or contributory basis for optional covers
Life Insurance & Taxes Premiums - Life insurance premiums paid by company becomes a tax deduction for the company Death Benefits - Not taxable as income and not exposed to estate taxes if the insured is not the beneficiary Group Medical Insurance Basic Hospitalisation & Surgical Insurance Scheme Group Outpatient General Practitioner and Specialist Scheme Inclusion of supplementary major medical cover Foreign Worker Medical Scheme Removal of government subsidy on 01Jan2008 Minimum per policy year limit increased from S$5,000 to S$15,000 with effect from 01Jan2010
Group Medical Insurance Funding Employee - 100% paid by Employer Dependant - 100% paid by Employer (Top Management) - Optional cover maybe partially or fully paid by Employee Dental - Typically a self-funded scheme Group Medical Insurance & Taxes Taxation Company s medical premium enjoys up to 2% of the company s annual payroll as tax deduction, on condition that 20% of its local Employees covered under: a) Transferable Medical Insurance Scheme (TMIS) b) Portable Medical Benefits (PMBS) c) Integrated Shield schemes Services Tax (GST) 7% GST will be charged on non-life insurance schemes
Group Disability Income Income replacement benefit plan Provides up to 50% - 75% of last drawn annual salary Payable after a deferred period of 3 or 6 months Waiting period & survival period Benefits pay-out period (2-year, 5-year or up to maximum of age 65) Funding typically fully borne by company Group Dread Disease Protect against 30 dread diseases Rider to Group Term Life Additional or Accelerated basis
Other Supplementary Benefits Maternity Expenses incurred arising out of pregnancy on hospital charges for Normal Delivery of child or children Caesarean delivery of child or children Miscarriage Cover female employees and spouse of married male employees who are below age 65 Other Supplementary Benefits Dental Benefit Commonly provided on self-insured basis Typical benefit ranges from S$150 to S$250 per year
Outlook and Trends Employee Benefits & Healthcare Outlook & Trends Outlook and Trends Rising medical costs Cost Containment Flexible-Benefits Portable solutions
Outlook and Trends Rising Medical Costs Increase in operating costs Advancement in medical technology Rising expectations Rapidly ageing population Removal of government subsidy for foreign workers effective 01 January 2008 Outlook and Trends National Health Expenditure (NHE) FY09 FY10 FY11 Operating Health Expenditure (S$m) 2,920 3,258 3,542 Development Health Expenditure (S$m) 711 485 465 Govt. Health Expenditure/GDP (%) 1.30% 1.20% 1.20% Govt. Health Expenditure/Total Govt. Expenditure (%) 8.60% 8.26% 8.43% Govt. Health Expenditure per person ** S$972 S$1,008 S$1,057 Notes: **Refers to Singapore Residents + Estimated figures Last Updated 2012 (Ministry of Health)
Outlook and Trends Cost Containment Public Health programs encourage appropriate use of medical services Medical provider to give estimated charges before treatment Setting up of community hospital / day surgery centre 2% cap on tax deductibility of medical expenses Means Testing (effective 01 Jan 2009) Outlook and Trends Flexible Benefits Provide Framework for staff to choose benefits that meet their needs and forgo others which are less useful Flexi-Points Each employee is allocated a certain no. of Flex Points Core Benefits Minimum set of Benefits Eg : Life Insurance 12x LDBMS Insurance Premium @ Unit Rate Optional Benefits Each optional benefits has a price tag Eg : Life Insurance Optional top-up add l 12 x LDBMS Insurance Premium @ Age-related rates Flex-Spending Account (FSA) Allowable items of expenditures Medical expenses Dental expenses Optical expenses Educational Vacation expenses
Feasibility Study Outlook and Trends Flexible Benefits Implementation Process of Flexi-Benefits Pre-implementation Communication Data Collection Objectives Design Financial Projections Focus groups Provider negotiation Plan Brochure Presentations Launch Monitor & Review Administration Outlook and Trends Portable Solutions Summary of main features Portable Medical Benefits (PMBS) Transferable Medical Insurance Scheme (TMIS) Provision of Shield Plan (i.e. Medishield or Medisave-approved private integrated plan) Employer makes additional contribution (at least 1% of gross wages, subject to a minimum contribution of $16 per month). Employees will use the Medisave contribution to purchase medical insurance to cover his inpatient needs An enhanced group medical insurance purchased by employer. It offers extension of inpatient coverage up to a max period of 12 months when an employee leaves employment. Employer provides inpatient medical benefits in the form of Shield plan to their employees. He either pays the premium of Shield plan directly to the insurance company or reimburses the premium into employees Medisave accounts.
Why? Outlook and Trends Portable Solutions Rising Medical Costs Longer Life Expectancy Ageing Population Changing Job Environment Fewer or no children to rely on for financial support Buying own insurance plan is costly & not cost-efficient when gainfully employed Duplication of own portable cover with employer s benefit entitlement How? Outlook and Trends Portable Solutions Employer keeps the Group Medical plan as basic cover Employers offers employees option to buy Shield Plan as top up cover Guaranteed continual coverage when employment ceases due to resignation, retirement or medical reasons
Employees Benefit Outlook and Trends SUMMARY Government continues to promote personal responsibility for one s health Cost Management become increasingly important as costs continue to rise Managed Care and Network Strategy are developing significantly Portability of medical coverage Flexible benefits plan Greater shift towards preventive care ( Health screening and early detection of illness and disability) Questions & Answer
Thank you for your attention! Aviva Ltd. Employee Benefits & Healthcare Mr. Pavan Virmani Head of Employee Benefits & Healthcare T (65) 6321-7894 E pavan_virmani@aviva-asia.com Ms. Fong Yee Foong Head of Domestic Corporate Business T (65) 6321 7866 E yeefoong_fong@aviva-asia.com Ms. Irena Tan Assistant Manager T (65) 6321 7851 E irena_tan@aviva-asia.com