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Health insurance in the Philippines: A complete guide for businesses

May 3, 2024

With a multilingual talent pool and a thriving tech market, the Philippines has become an increasingly popular expansion location for international businesses. For companies thinking about hiring in the Philippines, there are several things to be aware of, including understanding how their healthcare system functions, and what additional health insurance coverage options exist.

In this article, we will explain healthcare in the Philippines, including a summary of its national public healthcare system and the type of medical care and medical expenses it covers, and why many employers offer supplemental private insurance healthcare coverage in order to attract the best talent.

What is the Philippines Healthcare System?

If you intend to hire workers in the Philippines, it’s important to understand the country’s healthcare system. All Filipino citizens can access free healthcare through the Philippine Health Insurance Corporation, also known as PhilHealth. PhilHealth is overseen by the government, and funded through local and national governmental subsidies.

PhilHealth provides comprehensive healthcare services, covering everything from catastrophic coverage and surgeries, to maternity benefits and more. There are no standard copays. Instead, healthcare providers will assess what’s covered on a case-by-case basis and bill the patient for the remainder. The uncovered portion will often need to be paid out-of-pocket in full prior to treatment or before a patient leaves the facility after treatment.

There are six membership categories within PhilHealth:

  1. Sponsored members: Individuals who have their membership premiums covered by the local government.
  2. Indigents: PhilHealth members with very low to no income.
  3. Lifetime members: Pensioners and retirees over 60 who have paid premiums for 10 years. These individuals are exempt from further premiums.
  4. Senior citizens: Filipino citizens over the age of 60 who don’t fall into any of the other five categories are eligible for free coverage.
  5. Formal sector: Public and private sector employees.
  6. Informal economy: Self-employed citizens, day laborers, and others who fall outside of the formal sector classification.

What is the UHC Act and How Does it Impact Employers?

The Universal Health Care Act (UHC Act) was signed into law on February 20, 2019. It guarantees free health coverage to all Filipino citizens. Under the UHC Act, individuals either pay premiums as direct contributors, or have their premiums subsidized by the government.

Contributing members pay 3.5% of their annual income in Philippine Pesos (PHP) into PhilHealth’s National Health Insurance Program. These costs are evenly divided between the employee and the employer, but in 2025 the annual contribution is slated to jump to 5%.

The monthly salary ceiling is PHP 100,000 as of January 2024 (equivalent to $1,767.29 in U.S. Dollars). The minimum is PHP 10,000 (or $176.73).

If your business is late paying your portion of these fees, you could get hit with noncompliance penalties as well as be charged 3% monthly compounding interest.

Severe Illnesses Covered by PhilHealth

In addition to the standard comprehensive coverage, PhilHealth also includes what are known as Z Benefits and Sustainable Development Goal (SDG) benefits.

Z Benefits cover serious illnesses that require early or intensive treatment and long hospital stays. PhilHealth refers to these as Case Type Z conditions. Examples include cancer, organ problems like renal failure, and coronary surgeries.

PhilHealth’s Z Benefits cover hospital room and boarding expenses, in-patient medications, lab tests, operating room costs, and more.

SDG benefits are aligned with the United Nations’ Sustainable Development Goals initiative. This public health program includes a commitment to ensure collective health, justice, and prosperity for all. PhilHealth’s SDG benefits include:

  • Outpatient malaria treatment
  • Outpatient HIV/AIDS treatment
  • Voluntary surgical contraception
  • Animal bites

SDG benefits are available to everyone. However, only standard-risk individuals are eligible for a Z Benefit package — and only after a medical assessment.

Pros of the Filipino Healthcare System for Employees

Universal access to healthcare under PhilHealth ensures that Filipino residents can receive care in a public medical facility if they experience an unexpected illness or accident. They can also obtain diagnostic lab tests if they experience any troubling health symptoms.

The Filipino healthcare system ensures that all citizens, including your employees, have health coverage.

Cons of the Filipino Healthcare System for Employees

PhilHealth has some noteworthy gaps in the medical services it provides. The program covers emergency and urgent care, but non-emergency surgeries aren’t offered. This means that procedures like hip and knee replacements, cataract surgery, and hernia repair aren’t covered.

Individuals who wish to fill these important coverage gaps will need to either purchase their own supplemental healthcare plan, or work for an employer offering private health insurance. This is why employers who offer HMO packages and private health insurance plans are so attractive to workers in the Philippines.

HMO Plan Coverage

Employers often supplement their employees’ PhilHealth coverage with a Health Management Organizations (HMO) plan. These plans give employees additional medical coverage above and beyond their PhilHealth benefits, like dental and vision coverage. Should an employee experience a medical emergency, they can then tap into their HMO coverage to pay a percentage of the cost.

Employers typically cover 60% of the premiums for an HMO and the employee pays the remaining 40%.

Private Health Insurance Options

In addition to PhilHealth and HMOs, Filipino citizens may also purchase a private health insurance policy for supplemental coverage. Filipinos who opt for private coverage can expect more modern and comfortable private facilities. Private coverage also boosts their treatment options, as there are more private hospitals than public hospitals in the Philippines.

Other policyholder benefits include non-emergency hospitalization, vision and dental care coverage, as well as a broader range of surgeries than PhilHealth or HMOs cover. Private plans also provide more financial flexibility. Patients can choose to be reimbursed for payment or have the insurance company pay the hospital directly.

Employers that offer private healthcare insurance are particularly attractive for potential employees as not only will the employee benefit, but in many cases they can choose to pay extra to have their spouse and dependents added to their health plan.

Which Healthcare Option is Better for Your Employees?

While there’s no definitive answer about which option is better, there are some important points to consider.

Although PhilHealth is universally available, it might not cover certain medical procedures or severe illnesses. Supplementing employees’ PhilHealth coverage with an HMO or employer-sponsored private health plan is a strong selling point when it comes to attracting and retaining top talent.

Even though HMOs and private plans cost employees and employers a bit more in contributions and premiums, the boost in employee loyalty and satisfaction can make up for it. After all, international expansion can be more difficult if it also comes along with high turnover rates.

EORs Can Help You Navigate the Filipino Healthcare System

An Employer of Record (EOR) helps companies expand internationally by hiring and paying employees on behalf of another company. EORs like Remofirst assume the responsibility for all formal HR employment tasks, including payroll processing and compliance documentation. This allows businesses to focus on their day-to-day operations, rather than trying to become experts on employment laws in every country in which they hire.

Remofirst also offers employers access to personalized, international private medical insurance with some of the best coverage in the world, including in the Philippines, with RemoHealth.

We can also help your company take advantage of the Philippines digital nomad visa. The program allows remote expats to live and work in the Philippines for an extended period. Depending on where your remote employees are migrating from, the Philippines digital nomad visa could also save you money on healthcare and related fees.

To learn more about how Remofirst can help you navigate international health insurance in the Philippines and employ global talent in 180+ countries, request a demo today