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Portable medical benefits for employees

As an employer, you can qualify for tax deductions or exemptions by implementing portable medical benefits. These schemes will enable your employees to keep their medical benefits should they change jobs.

What are portable medical benefits

Portable medical benefits are schemes that help ensure that employees don't lose their inpatient or hospitalisation medical benefits if they change employers.

Incentives

If you implement any of the 3 portable medical benefits options, you will get a higher tax deduction for medical expenses of up to 2% of total employees’ remuneration. The normal tax deduction limit is 1%.

How it works

You can choose from 3 portable medical benefits options for your employees:

Portable Medical Benefits Scheme (PMBS)

Under PMBS, you make an additional contribution (at least 1% of gross monthly salary, subject to a minimum contribution of $16 per month) to your employees’ Medisave account every month.

Employees will use the Medisave contribution to purchase MediShield or Medisave-approved medical insurance to cover their inpatient needs.

Qualifying for the 2% tax deduction limit

You need to implement PMBS for at least 20% of your local employees as at the first day of the financial year being assessed and for all local employees who start their employment during that financial year.

For full-time employees, the additional monthly contribution to their Medisave account should be at least 1% of the gross monthly salary, subject to a minimum amount of $16 per calendar month.

For part-time employees, the additional monthly Medisave contribution should be calculated based on 1% of their actual gross salary for the calendar month.

Note: Local employees refer to Singapore citizens or permanent residents employed on a full time or part-time contract of employment, regardless of the number of hours worked.

Transferable Medical Insurance Scheme (TMIS)

TMIS is an enhanced group hospitalisation and surgical insurance that you can buy for your employees. It extends inpatient coverage up to a maximum period of 12 months when an employee leaves employment.

Employees covered under TMIS plans will be treated as continuously insured when they join a new employer who has also purchased a TMIS plan. They will not be excluded from coverage even if they have a pre-existing illness before joining the new employer.

Qualifying for the 2% tax deduction limit

You need to implement TMIS for at least 50% of local employees as at the first day of the financial year being assessed.

Providing a Shield plan

Under this option, you provide your employees with inpatient medical benefits in the form of a Shield plan, either MediShield or a Medisave-approved private integrated plan.

You will pay the premium of the Shield plan on behalf of your employees. You can either pay the insurance company directly or reimburse the amount of premium into your employees’ Medisave accounts.

If an employee has already bought a Shield plan provided by another insurance company and does not want to change the plan, you can credit the amount of premium of the Shield plan the company has chosen into the employee’s Medisave account.

Qualifying for the 2% tax deduction limit

You need to provide Shield plans for at least 20% of your local employees as at the first day of the financial year being assessed and for all local employees who start their employment during that financial year.

You need to pay the Shield plan premiums on behalf of your employees, either by paying the insurance company directly or reimbursing the amount of premium into your employees’ Medisave accounts

Tax deduction for ad-hoc Medisave contributions

You can make ad-hoc Medisave contributions to your employees' accounts, even if you are not adopting any of the portable medical benefits options.

To encourage such contributions, you can get an additional tax deduction beyond the 1% limit for the amount of ad-hoc Medisave contributions you make.

If you wish to make additional Medisave contributions for your employees, you need to register with the Employer Registration Section of the CPF Board for a new CPF Submission Number (CSN).

Tax exemption for employees

Under PMBS, provision of Shield plan and ad-hoc contributions, you can make additional contributions to your employees' Medisave account, up to a limit of $1,500 per employee per year.

Your employees can get a tax exemption of up to $1,500 per year for these additional Medisave contributions.

Find out more

Refer to the frequently asked questions for more information on portable medical benefits.

Contact the following Government bodies for further enquiries:

  • Ministry of Manpower: 6438 5122
  • CPF Employee Call Centre: 1800 227 1188
  • Inland Revenue Authority of Singapore: 1800 356 8300 (individual income tax), 1800 356 8622 (corporate income tax) and 1800 356 8611 (business income tax)
Last Updated: 13 April 2015