Sunday 6 July 2014

Medisave boost for civil servants

Most will get extra 1% of salary paid into Medisave accounts from January
By Linette Lai, The Straits Times, 5 Jul 2014

FROM January next year, most civil servants will get an extra 1 per cent of monthly salary paid into their Medisave accounts, with those earning lower incomes getting more.

This is over and above the 1 per cent extra employer Medisave contribution announced in this year's Budget that will also be kicking in next year.

About four in 10 government pensioners will also receive the additional 1 per cent when the new MediShield Life scheme kicks in, and the rest will have the premiums for the scheme fully paid for.

These changes are the result of a review of the health-care benefits for public-sector employees conducted in the light of the upcoming implementation of MediShield Life by the end of next year. MediShield Life is the new national health insurance scheme that will cover all Singaporeans for life, with enhanced benefits that will give better coverage of large hospital bills.

As a result, premiums for the scheme will be higher than those for the current MediShield plan.

In a statement yesterday, the Public Service Division (PSD) said it had reviewed its Medisave-cum-Subsidised Outpatient (MSO) scheme with public-sector unions to help civil servants with their inpatient medical needs and benefits from MediShield Life.

About 85 per cent of Singapore's 82,000 civil servants are on the MSO scheme. Introduced in 1994, officers on the scheme do not get direct inpatient medical benefits from their employer. Instead, the Government pays an additional 1 per cent of their monthly salary - capped at $70 per month - into their Medisave accounts.

The PSD said that almost all these officers use the money to buy MediShield or other Medisave- approved insurance plans to cover their inpatient needs.

From January, these officers will now get double the amount - 2 per cent of their monthly pay, subject to a cap of $140 per month. These changes will also apply to officers working in statutory boards. Low-wage civil servants earning $2,500 and below were given ''special consideration'', the PSD added. They will get at least $50 monthly in additional Medisave contributions, or about $750 a year, taking into account additional wages.

With the change, a civil servant earning $1,600 a month will get about three times the $240 he is currently getting in annual additional Medisave contributions.

The rest of civil servants who are not on the MSO scheme, as well as 40 per cent of the nation's 32,000 government pensioners, are on the older Comprehensive Co-payment Scheme which heavily subsidises health-care costs, including inpatient treatment at public hospitals and polyclinics.

This second group will get an extra 1 per cent in Medisave contributions when MediShield Life starts, to offset higher premiums.

A third group - which comprises the rest of government pensioners - are on older medical benefits schemes which provide better benefits than MediShield Life.

''Since MediShield Life is compulsory, the Government will pay for the premiums for this group so that these pensioners will be no worse off and will benefit from MediShield Life coverage,'' said PSD. It will write to pensioners with the details by October.

Civil servants cheered the move, with the National Trades Union Congress adding that it has ''set an excellent example'' in helping civil servants meet their long-term health-care needs.

Civil servants, unions cheer extra Medisave contribution
By Nur Asyiqin Mohamad Salleh And Maryam Mokhtar, The Straits Times, 5 Jul 2014

OFFICE administrator Mohamad Rahman, a diabetic who also has heart disease, is looking forward to an extra $50 in his Medisave account every month, come January.

The 53-year-old, who works in a statutory board, takes home $1,200 a month, which means his current additional Medisave contribution is just $12 a month, or 1 per cent of his salary.

But yesterday, the civil service said it will contribute more to its workers' Medisave, following a review of their medical benefits.

It will double the additional 1 per cent contribution it now makes to a worker's Medisave account.

With the change, which takes effect in January, about 85 per cent of civil servants, including those working in statutory boards, will get 2 per cent. They are in the Medisave-cum-Subsidised Outpatient Scheme.

But those earning $2,500 and less monthly, like Mr Rahman, will get at least $50 every month.

"It sounds like a small amount but it's not. If I have $50 in my Medisave, I can use the $50 in my pocket for my household expenses," said the father of three in Malay. Some months, his medical expenses hit about $200, putting a strain on household expenses.

Younger civil servants cheered the new rate. Project officer Andrew Tan, 26, said the money will be useful when MediShield Life premiums rise in the future.

Unions like the Amalgamated Union of Public Daily Rated Workers also welcomed the move. Its general secretary G. Muthukumarasamy said the extra $50 in Medisave will be a "safety net" for his 700 members, more than half of whom are older than 50.

"It's very good news. Low-wage workers cannot spare this money, so it's good employers are helping them with their medical costs," he said.

His members earn between $1,200 and $1,700 a month. Many, he said, suffer from chronic illnesses like diabetes and hypertension, "but they cannot afford not to work".

Similarly, the general secretary of the Amalgamated Union of Public Employees, Mr Ma Wei Cheng, said the new rate would give his members "greater peace of mind", as premiums are poised to rise with MediShield Life.

Private sector employers, however, cautioned that small and medium-sized enterprises (SMEs) particularly will find it difficult to follow suit.

"The fact that the announcement covers only public sector workers and is not mandated across all sectors shows the Government empathises and understands that not all segments of employers can afford to increase their contributions," said Singapore Business Federation chief operating officer Victor Tay.

In fact, there was "already an outcry" from SMEs when it was announced in February that employer contribution rates to Medisave will go up by 1 percentage point next year, Mr Tay added.

Association of Small and Medium Enterprises president Kurt Wee said SMEs are going through an "extremely cost-conscious phase" now, and will need time.

But, he added: "Many SMEs will consider it seriously because they're aware it will help them to recruit and, more importantly, retain labour."

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