Medical benefits appear as a big factor for employees joining and staying with SMEs, but many of these firms struggle to provide coverage, citing the small size and high cost of group insurance, a survey by Prudential Singapore has shown.
Medical benefits commonly cover both inpatient, hospitalisation, expenses, and outpatient bills at general practitioner (GP) clinics.
The findings were revealed in a poll commissioned by Prudential Singapore and conducted by market researcher Milieu Insight. A total of 1,029 Singaporean SME employees and business owners were polled, aged 18 and above, and work in SMEs with one to 200 employees.
The poll found that a large majority (nine in 10) of respondents want employers to provide healthcare coverage while some 60 percent said they are more willing to join an SME that has medical benefits, while almost 40 percent are more likely to stay on in a company that offers such benefits.
The survey also shows that 13 percent of respondents work in SMEs that do not provide medical benefits. For SMEs with 10 or fewer employees, the rate doubles to 27 percent.
A factor often associated with smaller SMEs is cost. Many of them are challenged with high costs of operations, exacerbated by a talent crunch that has pushed up labour costs.
Asked about the annual budget allocation for medical benefits, almost 40 percent (two in five) SME owners said they put aside S$10,000 and below for the purpose.
Food importer Optimo Foods, an SME with seven employees, said they are too small to go for a corporate policy. Wee Su-Lyn, director of Optimo Foods, said the firm gives full-time staff a lump sum every year to buy their own medical insurance.
There is no statutory requirement for employers in Singapore to offer healthcare insurance. Manpower Minister Tan See Leng said during a parliamentary discussion last year that employers may choose to provide such insurance as an employee benefit.
While it is not compulsory by law, these medical benefits can be a sweetener to attract talent.
Professional engineering consultancy firm Soteria gets group medical insurance for its four employees, with director Daniel Choo saying they will not have to worry about their medical bills. He added that employees and their families will also feel happy that the company takes care of their health and safety, and will more likely stay on with the company, The Straits Times reported.
Dennis Tan, CEO of Prudential Singapore, said employees are becoming more aware of their health and their need for insurance protection ever since the pandemic.
He said that an aging workforce and rising healthcare costs are also prompting workers to value medical coverage more, adding that having the necessary protection assures them that their healthcare needs are taken care of, so they can focus on their work, he said.
Prudential Singapore said personal plans may not include visits to GPs or dental clinics, but these are covered under group insurance. Personal health plans may also cover only the individual policyholder and not his or her dependents, unlike group plans which may also cover them.