How PhilHealth Works and the PhilHealth Contribution Table

Getting your head around the intricacies of employee benefits, especially when it comes to the National Health Insurance Program (NHIP) or PhilHealth benefits in the Philippines, can be tough.

But don't worry!

We simply this all for you - breaking down the jargon and explaining terms in a way that's easy to digest. Let’s delve into PhilHealth benefits and what it means for you as an employer.

What is PhilHealth?

The NHIP (National Health Insurance Program) is a government initiative designed to provide universal health insurance coverage for all citizens of the Philippines. It's a compulsory program, which means that all Filipinos are covered under it, as stated in Republic Act No. 11223 or the Universal Health Care (UHC) Act.

The program offers a range of benefits, including inpatient and outpatient services, special benefits known as "Z Benefits", and benefits related to the Sustainable Development Goals (SDGs).

The benefits of PhilHealth is to provide financial health protection to all its members, reducing the out-of-pocket expenses related to healthcare and ensuring that every Filipino has access to affordable, quality health services.

Employers, along with their employees, are considered "Direct Contributors" to the insurance program. This group also includes household help, self-earning individuals, overseas Filipino workers, Filipinos living abroad, and those with dual citizenship, among others.

Here’s a full of Direct Contributors:

1. Employees with formal employment;
2. Kasambahays;
3. Self-earning individuals and professional practitioners;
4. Overseas Filipino Workers;
5. Filipinos living abroad and those with dual citizenship;
6. Lifetime members; and
7. All Filipinos aged 21 years and above with capacity to pay.

The premium contributions from employers and employees are calculated based on the employee's monthly basic salary and are divided equally between the two parties.

How Does PhilHealth Work?

Let's imagine the PhilHealth program as a giant pot of funds, where everyone chips in to ensure that everyone has access to healthcare. The funds in this pot are used to provide health insurance coverage to all members of the program.

Now, the question is how much should each member contribute? The answer lies in the PhilHealth's contribution system, which uses the member's basic monthly income as a basis for determining the contribution amount. But there are two exceptions to this — those who earn less than the income floor and those who earn more than the income ceiling.

In the case of high-income earners, whose monthly income exceeds the income ceiling, their premium contributions are not calculated based on their actual earnings. Instead, they are calculated based on the income ceiling.

To understand why, let's think of a scenario where there's no income ceiling. In this case, high-income earners would contribute significantly more to the pot, leading to an over-concentration of their contributions. This might seem like a good thing at first, after all, more money means more resources for healthcare, right? But this could potentially create an imbalance in the system.

The reason is that the healthcare needs of the population do not directly correlate with their income levels. A high-income earner may not necessarily require more healthcare than a low-income earner. Therefore, if high-income earners contribute too much, the system could become biased towards them, potentially leading to an inequitable distribution of resources.

To prevent this, PhilHealth sets an income ceiling. This means that no matter how much more a person earns beyond this ceiling, their contribution is calculated based on this ceiling, not their actual income. This way, the program ensures an even distribution of resources across all members, regardless of their income. In other words, it ensures that everyone pays their fair share.

Furthermore, this measure also highlights the program's commitment to social responsibility. It's a way of ensuring that those who have the financial capacity to contribute more do so, but not to the point of becoming excessive or unfair.

In simple terms, it's like having a rule in a potluck party where everyone is required to bring food to share, but those who can afford more are asked to bring a bit more. However, there's a limit to how much extra they can bring, to ensure that everyone gets to enjoy the party equally.

Decoding the PhilHealth Contribution Table

PhilHealth benefits for employees include inpatient hospital care, outpatient care, and access to a wide range of medical services and treatments. For employees you contribute to PhilHealth through a premium deducted from your monthly salary, which is matched by your employer. This shared contribution ensures that you have access to healthcare when you need it, alleviating the financial burden of medical expenses.

Originally, there were plans to increase the premium rate of PhilHealth from its current 4.0% to 4.5%. Alongside this, there was an intention to raise the income ceiling for contributions from ₽80,000.00 to ₽90,000.00. These changes were set as an effort to enhance the insurance coverage and benefits for the employees. However, these planned increments have been put on hold following a directive from the President of the Philippines. This suspension means that, for the time being, the premium rate will remain at 4.0% and the income ceiling stays at ₽80,000.00.

Now, what does this mean for the employees? Employees who earn less than the income floor or more than the income ceiling will have their premium contributions calculated based on these set parameters.

To put it simply, if an employee's income falls below the established income floor or exceeds the determined income ceiling, the amount they and their employers need to contribute to the PhilHealth insurance scheme will be determined by these specific income limits, rather than their actual earnings. This procedure ensures a fair contribution scheme, preventing those with lower income from over-contributing and those with higher income from under-contributing.

PhilHealth Premium Contribution Table

The table below is the premium contribution table for direct contributors according PhilHealth Circular No. 2020-005.

When considering the premium contributions for those whose basic monthly salary falls below the income floor, it's important to note the underlying consideration behind this measure. The NHIP, being a universal health insurance system, is designed to ensure that all Filipino citizens, regardless of their income level, can access affordable healthcare.

By setting a minimum contribution amount, the program ensures that even those with the lowest incomes are able to contribute towards their healthcare costs. This is a crucial aspect of the program's inclusivity, allowing it to cover as many citizens as possible. Moreover, this measure also helps to uphold the principle of solidarity in healthcare financing, where everyone contributes according to their ability to pay.

Note: Employers have the responsibility to guarantee that the premium contributions of female employees on maternity leave are regularly submitted to PhilHealth. This is in accordance to the Department of Labor and Employment (DOLE) Department Advisory No. 1, Series of 2019.

This means that even when female employees are not actively working due to maternity leave, their health coverage remains uninterrupted. Employers must make sure to adhere to this policy, ensuring that female employees on maternity leave continue to have their PhilHealth contributions paid regularly. This not only maintains the health insurance coverage of the employee, but also upholds the spirit of the law, ensuring the welfare of all employees regardless of their personal circumstances.

Compliance for Employee Well-being

As an employer, it's crucial to ensure that you are in compliance with these regulations, not only to avoid penalization but more importantly, to safeguard the health and welfare of your employees. After all, a healthy workforce promotes a productive environment!

Conclusion

In conclusion, understanding the intricacies of PhilHealth benefits and the employee benefits landscape in the Philippines doesn't have to be a daunting task. By breaking down the terms and definitions, we hope we've made it simpler for you to comprehend.

So take that step today - ensure you're up-to-date with your contributions and secure the well-being of your workforce. Remember, employee benefits are not just a legal requirement - they're an investment in the health and productivity of your team.