Posted on Jan 14, 2011 by Sergio Ulloa
On January 1st 2011, the Malaysian Government made health insurance compulsory among the foreign working population, with the aim to eradicate the fraudulent and unpaid hospital bills
that were piling up in the country. The Malaysian Government estimates the total figure to amount as high as RM$18 million, or USD$5.8 million.
From the first of January, Health Minister Datuk Seri Liow Tiong Lai, introduced the Foreign Worker Hospitalization & Surgical Insurance Scheme
, making it compulsory for employers to provide health insurance coverage to foreign workers. Further to this, employers are enforced to provide workers compensation insurance to foreign workers, under the Foreign Workers Compensation Scheme
With some employers budging to comply with the new scheme, Health Minister Datuk Seri Liow Tiong Lai reissued warnings to employers on 7th January, mandating that payment of premiums are made by March, or else foreign worker's permits will not be renewed. Outstanding medical bills must be cleared, otherwise worker's permits will also not be renewed.
The Foreign Worker Hospitalization & Surgical Insurance Scheme was introduced as a result of the ever-increasing fraudulent and unpaid hospital bills in Malaysia, said to be made predominantly by foreign workers receiving medical care in the country. Allegations have also been made against foreign patients profiteering from prescription medications, purchased from hospitals and artificially inflated to overseas customers.
The Foreign Worker Hospitalization & Surgical Insurance Scheme applies to all foreign workers in Malaysia. The scheme is limited to cashless claim services, within Government hospitals in the country. A set premium of RM150, or USD$49.07 has been applied for the insurance scheme, which covers up to RM10,000, or USD$3,270 a year in medical expenses. Those eligible under the scheme must be full time foreign workers, between the age of 18 to 59. Foreign workers covered under the insurance scheme, are entitled to hospital care, only within Non-Corporatised Malaysian Government Hospitals. Foreigners under the scheme do not need to provide any cash or guarantee letter from the insurer, they only need to turn up with their passport. The Malaysia Assurance Alliance Berhad (MAA) were appointed by the Ministry of Human Resources to partake in the design of both the Foreign Worker Hospitalization & Surgical Insurance Scheme (SKHPPA), and the Foreign Workers Compensation Scheme (FWCS).
There are around two million foreign workers registered in Malaysia, predominantly employed in the labour market, working in plantation farming as well as domestic maids. There is however a current shortage of maids working in the country, partly due to allegations of abuse among maids working in Malaysia. The collective figure of working foreigners, is however on the increase in Malaysia and the Government hopes to control this figure. Tuberculosis was once under control in Malaysia, however due to the migration of people from high risk countries the incidence rate is on the rise again. More than 17 thousand Tuberculosis cases are reported annually in Malaysia, with around14 % involving foreign workers.
Workers compensation insurance claims are very low among the foreign worker population in Malaysia. Only 75 % of foreign registered workers are said to be covered by workers compensation schemes by the employer. The Malaysian law mandates that employers must provide workers compensation insurance coverage to all permanent employees.
Employers are arguing that the premiums associated with the new compulsory health insurance mandate is too high, placing an unfair burden on employers. Deputy chairman of the Sabah Parti Keadilan Rakyat, Christina Liew argued
"It is like penalizing the employers whenever the government imposes new policy with regard to foreign maids and plantation sectors... surely, the premium should not be so high as RM120 per worker".
Although the coverage is relatively low, capped at a RM10,000, employers argue that the total amount in premium would exceed the hospital debt. Plantation farmers are debating the scheme and refusing to pay the premium. Shamsuddin, on behalf of the The Malaysian Employers Federation (MEF) are arguing "They have their own arrangement. Plantation workers' medical fees are covered by the employers based on the law", further adding "with more than two million foreign workers, the sum will total more than RM240 million annually." Plantation farms are located outside of urban areas and generally have little access to hospitals. With plantation and farming estates paying costly premiums, food prices may inevitably increase.
There are 32 insurers said to be currently registered on the scheme. End of last year, following announcement of the scheme, insurance companies were competing to partake a share of the new market, however the scheme is said to be open to all insurers.
Those insurers who made their policies available on the 1st January include: Tokio Marine Insurance (Malaysia) Berhad; Malaysian Assurance Alliance Berhad; AXA Affin General Insurance Berhad; MUI Continental Insurance Berhad; The Pacific Insurance Berhad; Barjaya Sompo Insurance Berhad; Jerneh Insurance Berhad, Kurnia Insurance (Malaysia) Berhad; RHB Insurance Berhad; and Progressive Insurance Berhad. Others to be registered by February 15th include QBE Insurance (Malaysia) Berhad; Overseas Assurance Corporation (Malaysia) Berhad, Allianz General Insurance Company Berhad; Oriental Capital Assurance Berhad; and Sayarikat Takaful Malaysia Berhad.
Insurance Companies Mentioned:
Allianz General Insurance Company Berhad
Allianz General Insurance Company Berhad is a subsidiary of the Allianz Group, one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
AXA Affin General Insurance Berhad
AXA Affin General Insurance Berhad is a subsidiary of the AXA Group, a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA's operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
Malaysia Assurance Alliance Berhad
Malaysia Assurance Alliance Berhad (MAA) was incorporate in 1968, MAA is a subsidiary of MAA Holdings Berhad. MAA is one of the leading insurance and financial services companies in South Asia, providing services mainly within Malaysia, as well as in Indonesia and the Philippines.
Berjaya Sompo Insurance Berhad
Berjaya Sompo Insurance Berhad is an insurance provider, offering a range of products including health insurance, personal liability and motor insurance. The company originated in 1974, merging its services with Sompo Japan Insurance Inc, Japan's second largest insurer, in 2006.
Jerneh Insurance Berhad
Established in 1971, Jerneh Insurance Berhad is a subsidiary of Jerneh Asia Berhad, (JAB) an investment holding company. Jerneh Insurance Berhad is based in Malaysia, providing insurance products in accident, health insurance, household and other insurance products and services.
Kurnia Insurance (Malaysia) Berhad
Kurnia Insurance (Malaysia) Berhad is one of the leading General Insurance companies in Malaysia. Previously known as Industrial and Commercial Insurance, the company was established in 1978 and purchased by its present owners in 1991. Kurnia Insurance (Malaysia) Berhad specializes in motor, medical, personal accident, home and business insurance products.
Progressive Insurance Berhad
Progressive Insurance Berhad is a reinsurance company established in Malaysia. Founded in 1974, the company moved its headquarters from Sarawak to Kuala Lumpa in 1982. Today the company's financial equity has been expanded following 94% stake jointly purchased by the Sabah State Government and Permodalan Bumiputra Sabah Berhad.
MUI Continental Insurance Berhad
Established in 1976, MUI Continental Insurance Berhad is a general insurance company. MUI Continental Insurance has branches throughout Malaysia, with leading US insurance underwriter CNA Financial Corporation, as one of its shareholders.
QBE Insurance (Malaysia) Berhad
A subsidiary of the QBE Group, QBE Insurance (Malaysia) Berhad is a joint venture company with MBf Insurans, merging in 2002. The QBE Group established services within Malaysia in 1905 and today it is one of the top 25 insurers and reinsurers worldwide. Headquartered in Sydney, Australia, QBE operates out of 49 countries around the globe, with a presence in every key insurance market.
RHB Insurance Berhad
RHB Insurance Berhad is a subsidiary of the RHB Banking Group, the first local bank established in Malaysia in 1913. RHB Insurance Berhad provides a range of general insurance services including health, property, automobile, personal liability, among other insurance products and risk management services.