CMFAS HI Key Notes

The summary below depicts how the Singapore Government provides universal coverage through multiple layers of protection:

(a) Government subsidies:

  • Government subsidies across primary, acute, rehabilitative and nursing care; and
  • Universal access, but no 100% subsidy to avoid over-consumption.

(b) Compulsory healthcare savings:

  • Individual medical savings accounts – Medisave.

(c) Risk-pooling via insurance schemes:

  • National basic health insurance scheme – MediShield Life;
  • Private health insurance for additional coverage – Medisave-approved Integrated Shield Plans (IPs); and
  • Severe old age disability insurance – ElderShield and ElderShield Supplements.

(d) Ultimate safety net for the needy:

  • Endowment fund set up by the Government for needy Singaporeans – Medifund.

There are broadly three categories of Health Insurance which can provide for:
▪ a reimbursement for the cost of medical treatment or nursing care; or
▪ a periodic income upon disability or hospitalisation; or
▪ a fixed cash amount upon disability or suffering from a major illness.

The majority of the Medical Expense Insurance plans in Singapore generally cover the basic benefits as described below:

 Inpatient Expenses

  • daily room and board charges;
  • intensive care unit charges;
  • short stay ward;
  • hospital miscellaneous expenses;
  • surgeon’s fees;
  • anaesthetist’s fees;
  • surgical implant and prosthesis charges;
  • stay in community hospitals;
  • inpatient psychiatric treatment;
  • congenital anomalies;
  • inpatient pregnancy complications;
  • radiosurgery;
  • stem cell transplant;
  • emergency overseas inpatient treatment;
  • accident inpatient dental treatment;
  • major organ transplant;
  • living donor organ transplant.

Outpatient Expenses

  • pre-hospitalisation diagnostic and laboratory tests charges;
  • pre-hospitalisation specialist consultation charges;
  • post-hospitalisation specialist consultation charges;
  • accident and emergency (A&E) treatment;
  • emergency accidental treatment charges.

Hospital Miscellaneous Expenses refers to the services and supplies (other than room and board and general nursing care) furnished during a hospital stay, and will usually include the following:

  • laboratory services;
  • X-ray examinations;
  • medicines and drugs;
  • surgical dressings;
  • operating room expenses;
  • oxygen and its administration; and
  • ambulance services

Insurers may also provide additional benefits, such as the following:

  • specific disease insurance;
  • miscarriage benefit;
  • private nursing home care;
  • daily hospital cash;
  • emergency medical evacuation benefit; and
  • final expenses benefit.

There are basically three types of deductibles as follows:

  • per annum deductible;
  • per disability/per year deductible; and
  • per disability (or per claim) deductible.

Exclusions and limitations are designed for the following reasons:

  • to avoid the possibility of a policy owner receiving reimbursement twice for the same charges, or making a profit from his insurance;
  • to make the premium more affordable;
  • to define more clearly the necessary medical care and treatment; and
  • to avoid the policy owner selecting against the insurer (i.e. anti-selection).

The common exclusions under Medical Expense Insurance policies usually include:

  • pre-existing conditions that were present during a specified period (e.g. 12 months) prior to the inception of the insurance;
  • congenital anomalies;
  • cosmetic surgery, dental treatment and vision care;
  • convalescent and special nursing care, general medical check-up;
  • pregnancy, infertility, birth control, childbirth and their related complications;
  • mental or nervous disorder, drug addiction and alcoholism;
  • Acquired Immune Deficiency Syndrome (AIDS) and its related complications, sexually transmitted diseases;
  • flying or aerial activity, other than as a fare-paying passenger on a regularly scheduled flight of a commercial aircraft;
  • hazardous sports, such as mountaineering, scuba diving, ice skating, bungee jumping, etc.;
  • illnesses or injuries arising from war, nuclear, participation in strike, riot or civil commotion;
  • self-inflicted injuries and injuries resulting from a criminal or unlawful act;
  • purchase of hospital-type equipment, such as wheelchair, dialysis machine, etc.; and
  • treatment for obesity, weight reduction or improvement.

Transferable Medical Insurance Scheme (TMIS) policy is an enhancement of the existing employer-sponsored Group Medical Expense Insurance outside of the CPF Medisave framework. It is basically an employer-sponsored Group Medical Insurance programme with the following two additional features:
▪ continuation of coverage; and
▪ transferability of benefits.

To qualify for the TMIS, the employer must:

  • have a group size of 11 or more employees;
  • take up a Group Medical Expense Insurance plan;
  • insure at least 50% of its local employees, subject to a minimum total of 11 employees. The benefits can be provided for pre-defined categories of employees, e.g. rank-and-file employees or executives;
  • pay 100% of the premium for the Group Medical Expense Insurance coverage; and
  • not give their employees the option as to whether they wish to be insured under the Group Medical Expense Insurance plan.

The following are the medical expenses that qualify under the TMIS benefits:

  • daily room and board charges;
  • intensive care unit charges;
  • charges for miscellaneous hospital services;
  • charges for in-hospital doctor’s visits; and
  • charges for inpatient and outpatient benefits.

To be eligible for the TMIS benefits, an employee must be:

  • below the prescribed statutory retirement age;
  • a Singapore Citizen or SPR based in Singapore;
  • working full-time with the same employer; and
  • working on a permanent employment contract, or on a temporary employment contract with a term of 24 months or more.

The term “Total Disability” is clearly defined in the policy and may take one of the following forms:

  • own occupation disability;
  • modified own occupation disability;
  • any occupation disability and
  • severe disability

To be eligible for the disability income benefit payment, the insured MUST:
(a) keep the policy in force;
(b) be working (employed) or in-between jobs when being disabled;
(c) still be disabled after the deferred/elimination period;
(d) meet the definition of total or partial disability as stated in the policy;
(e) not have reached the expiry age as stated in the policy;
(f) not have resided outside Singapore for more than a certain period of time (usually not more than six months); and
(g) not have other sources of income (e.g. payment from Work Injury Compensation Insurance), which when totalled up, is more than the benefits due to him under his Disability Income Insurance policy

The features of a typical Disability Income Insurance policy are described below:

  1.  It can be issued as a stand-alone (for which then, no rider is possible) policy, or as a rider to a basic Life Insurance plan.
  2. It provides a regular monthly income during the insured’s total and partial disablement.
  3. The premiums are waived during the benefit period.
  4. The benefits may be level, or may increase at a given rate.
  5. There is a choice of deferred/elimination period.
  6. There is a choice of benefit period.
  7. There is a choice of escalation benefit (if available).
  8. The level premium can be paid on a monthly, quarterly, half-yearly or
    annual basis, depending on the insurer’s practice.
  9. There is payment of partial disability benefits if a person returns to work
    earning a lower income.
  10. There is provision of rehabilitation expense benefit.
  11. There is provision of death benefit.
  12. There is no restriction on the use of the cash benefits paid.
  13. Disability benefit may discontinue if the insured stays outside Singapore for a specified period.
  14. The cover will be terminated if the insured resides outside Singapore for
    more than a continuous specified number of days, within any one policy
    year, unless the insurer grants the insured the continuity of cover (an additional premium may be charged).
  15. The cover will be terminated if the insured is not engaged in any full-time occupation or profession for a continuous period of a specified number of days, when he is not suffering from a disability.
  16. The policy is usually guaranteed renewable and non-cancellable (the insurer has the right to adjust the premium rates if the insured changes his occupation to one which is of a higher risk) by the insurer.
  17. There is no surrender value, i.e. the insured cannot return the policy to the insurer for cancellation in exchange for cash payment.
  18. No assignment is allowed.
  19. The policy cannot be written as a third-party policy.
  20. The benefits received are non-taxable.
  21. The policy will lapse if the premium is not paid within the 30 days’ grace period.

The Disability Income Insurance policy will terminate upon the happening of one of the following events:
(a) the policy has reached its expiry date;
(b) the premiums due are not paid within the grace period;
(c) the insured dies;
(d) the insured reaches the expiry age as stated in the policy schedule;
(e) the insured resides outside Singapore for an aggregate period of more than a specified number of days (e.g. 300 days) within one policy year, without seeking the insurer’s prior written approval for continuation of cover; or
(f) the insured is not employed in a full-time occupation or profession for a continuous period of a specified number of days (except if he is disabled).

The selection process in Group Disability Insurance policies is similar to that for the individual disability plans. As the group must have a Group Term Life Insurance policy before they are eligible for this disability policy, most of the underwriting criteria will have already been met. The additional factors that the underwriters will need to take into consideration are:

(a) nature of the company’s business;
(b) age of the individual employee;
(c) exact nature of work of each employee;
(d) salary of each employee;
(e) benefit period applied for;
(f) benefit amount applied for; and
(g) claims experience of the group under the previous Group Disability Income Insurance policy.

These are the general features of Long-Term Care (LTC) Insurance, while the actual features will depend on the product design as described below:

  1. The product may be offered on a stand-alone basis, or it can be attached as a rider to a plan, such as a Whole Life Insurance policy.
  2. There is usually a minimum entry age imposed as determined by the insurer. The maximum entry age is usually in the range of 70 to 75 years next birthday.
  3. The product is usually issued on a guaranteed renewable basis.
  4. There is no cash or paid-up value (with the exception of ElderShield which has a paid-up value) at any time.
  5. The policy is non-participating and does not share in the divisible surplus of the insurer.
  6. The premiums are level throughout the term of the policy and are based on the entry age level. Premiums are payable annually (or more frequently) for the entire term of the policy. Premiums are usually not guaranteed for the policy period and can be adjusted by the insurer.
  7. The policy expires or terminates if the premiums remain unpaid after the grace period, or if the maximum benefit limit is reached.
  8. If the insured recovers from his disability, payments will stop. However, the insured can choose to continue his policy by continuing to pay the premiums, provided that he has not reached the maximum limit of benefits under his policy.

Exclusions are circumstances which are not covered by the policy. The common exclusions of an LTC Insurance policy include:
(a) all pre-existing conditions, unless fully declared by the insured at the time of application and accepted by the insurer;
(b) self-inflicted injury;
(c) mental or nervous disorders without demonstrable organic disease;
(d) alcoholism or drug abuse;
(e) Acquired Immune Deficiency Syndrome (AIDS) or infection by any human immunodeficiency virus (HIV), except where the infection is due to blood transfusion or resulting from infection incurred by medical staff after the issue date;
(f) war, or any act of war, or service in any of the armed forces or auxiliary units; and
(g) participation in a felony, riot or insurrection.

The common exclusions seen in a CI Insurance policy are:
(a) pre-existing illnesses;
(b) self-inflicted injury or illness, while sane or insane;
(c) wilful misuse of drugs and/or alcohol;
(d) congenital anomalies or inherited disorders;
(e) Acquired Immune Deficiency Syndrome (AIDS) or infection by any human immunodeficiency virus (HIV);
(f) bodily injury sustained as a result of travel in or on any type of aircraft, except as a fare-paying passenger or as a crew member of an international airline operating on a regularly scheduled passenger flight of a licensed commercial aircraft; and
(g) war or warlike operation, nuclear, strike, riot and civil commotion risks.

A Hospital Cash Insurance cover will terminate when one of the following events occurs:
(a) the premium is not paid at the end of the grace period;
(b) the insured reaches the expiry age as stated in the policy;
(c) the per lifetime limit is reached;
(d) the basic policy lapses or matures; or
(e) the insured dies.

Group Dental Care Insurance policies also impose certain exclusions on the cover provided. Some common exclusions include:

  1. dental procedures that are not specified in the Schedule of Allowances;
  2. hospital charges;
  3. injuries arising directly or indirectly from war (declared or undeclared), revolution, or any warlike operation;
  4. medicine given;
  5. treatment which is purely cosmetic in nature;
  6. treatment resulting from self-inflicted injury, while sane or insane; and
  7. replacement of broken, lost or stolen dentures.

MHC providers set up a healthcare network to manage the accessibility, cost and quality of care of its members. They negotiate and contract with doctors, hospitals, clinics, and other health care providers, such as pharmacies, laboratories, X-ray centres, and medical equipment vendors, in exchange for more patients directed to them.

The four common payment methods used by MHCO are as follows:
▪ capitation;
▪ discounted-fee-for-service;
▪ salary; and
▪ fee schedule

The three common types are:
▪ Health Maintenance Organisation (HMO);
▪ Preferred Provider Organisation (PPO); and
▪ Point-of-Service (POS) plan.

There are four basic types of HMO as follows:
▪ Staff Model HMO;
▪ Group Model HMO;
▪ Network Model HMO; and
▪ Independent Practitioners Association (IPA) Model HMO.

The common exclusions under a MHC Insurance policy include:

  • pre-existing conditions;
  • congenital anomaly, hereditary condition and disorder;
  • mental illness and personality disorder;
  • infertility, sub-fertility, assisted conception treatment;
  • treatment of sexually transmitted disease;
  • Acquired lmmune Deficiency Syndrome (AIDS), AIDS related complex or infection by human immunodeficiency virus (HIV);
  • self-inflicted injuries;
  • drug addiction or alcoholism;
  • purchase of eyewear or related eye care items;
  • purchase of kidney dialysis machine, iron-lung, prosthesis and other special appliances;
  • private nursing charges;
  • injuries arising from direct participation in strike, riot or civil commotion;
  • injuries arising directly or indirectly from nuclear fallout, war (whether declared or not declared) and related risks;
  • childbirth and abortion or routine ante-natal and post-natal visits;
  • cosmetic surgery (except for treatment necessitated by an accident);
  • general exclusions imposed on Medical Expense Insurance policies are also applicable to MHC Insurance plans;
  • optional items which are outside the scope of treatment; and
  • reimbursements for Work Injury Compensation Insurance and other forms of insurance coverage.

The key features of the ElderShield scheme are described below:

  1. It is guaranteed renewability on an annual basis.
  2. It provides 24-hour, worldwide coverage.
  3. It has minimum (i.e. 40 years old) and maximum entry age (i.e. 64 years old).
  4. A grace period of 75 days is allowed for payment of the overdue premiums.
  5. Reinstatement of the policy is allowed within 180 days from the expiry of the grace period, subject to evidence of insurability at the insured’s expense and payment of the overdue premiums with interest.
  6. The insurer has the right to appoint an assessor to examine the insured periodically.
  7. Where the insured is overseas at the time of a claim, the insurer has the right to commute the benefit payments to a single payment reflecting the present value of future benefit payments, or withhold the claim payment if it is unable to assess the claim after having made reasonable attempts to do so.
  8. There is no cash surrender value.
  9. There is a free-look period of 60 days from the policy commencement date during which the insured may cancel his policy, and receive a full refund of the premiums paid.

The ElderShield policy does not cover any disability arising directly or indirectly, wholly or partly, from any one of the following occurrences:
(a) self-inflicted injury, suicide or attempted suicide;
(b) alcoholism or drug addiction; or
(c) war, whether declared or undeclared.