Group Medical Insurance in Hong Kong: Startups, SMEs & MNCs

In today’s ever-evolving business landscape in Hong Kong, talent attraction and retention have become one of the top priorities for businesses, no matter startups, SMEs, or MNCs. As such, many employers have chosen to offer group medical insurance to take care of them and keep them in business.

The two types of insurance policies for employees in Hong Kong are Employee Compensation Insurance (ECI) and Group Medical Insurance (GMI). What are the differences between the two? What is the coverage and why should employers consider offering comprehensive GMI?

This Pacific Prime guide to group medical insurance in Hong Kong for all business sizes will walk you through the types of coverage, eligibility of plans, and other additional features that employers can consider to increase the competitiveness of their company’s GMI in employees’ eyes.

Understanding Your Group Medical Insurance Options

The two options for group medical insurance for employees in Hong Kong are ECI and GMI. The core difference between the two is that ECI is mandated by law, whereas GMI is not legally required, and it is up to the employer to decide whether the company will provide medical benefits to its employees.

Employee Compensation Insurance (ECI)

Employee Compensation Insurance is a mandatory requirement for all employers in Hong Kong. This insurance provides coverage for all employees—regardless of their employment status or length of service—against work-related injuries, diseases, and fatalities.

Failure to secure ECI can result in severe penalties, including up to two years of imprisonment and a fine of HKD $100,000. Compliance with ECI regulations is essential for safeguarding both employees and employers.

Group Medical Insurance (GMI)

Hong Kong has the second most expensive private healthcare system globally, following the United States, making medical insurance essential for employees. GMI offers a practical solution for employers by covering the medical expenses of multiple employees under a single policy, rather than requiring individual plans.

Many employees value GMI for its comprehensive coverage, including non-work-related conditions. While employers don’t necessarily need to offer this insurance, many choose to do so to enhance employee retention and attract top talent in Hong Kong’s competitive job market.

What does Group Medical Insurance Cover?

Most Group Medical Insurance provides the following coverage:

• Inpatient (semi-private*)
• Outpatient
• Dental

Some employers also opt to provide these benefits to increase their package’s competitiveness:

• Annual check-ups
• Maternity Coverage

The medical benefits covered are subject to sub-limits, where the employee himself/herself will have to pay for their medical expenses out-of-pocket if the claimed amount has gone over the sub-limit as stated in the insurance policy. This is more likely to happen for basic group medical insurance plans, hence some employers choose to enhance it to give it a higher sub-limit per category.

Note*: This is what most employers prefer for basic group medical insurance. Employers who wish to upgrade their insurance plan could opt for a private room. This is due to a unique feature of Hong Kong’s private medical system where doctors’ fees are positively related to the hospital room type.

Who is covered under Group Medical Insurance?

Some companies choose to cover employees only, but lately, we’ve seen covering dependents (spouse and children) having increased popularity. That said, this is completely up to the employer whether to extend coverage to dependents. Here are some questions HRs or employers need to think through.

• Eligibility Criteria: Who qualifies as a dependent? Will coverage include spouses, children, or other family members?
• Cost Implications: How will the addition of dependents affect the overall insurance premiums? Will employees contribute to these costs?
• Coverage Limits: What benefits will be included for dependents? Are there different coverage levels compared to employees?
• Policy Terms: What are the terms regarding pre-existing conditions for dependents? Are there waiting periods for coverage?
• Enrollment Process: How will the enrollment process for dependents be managed? Will it be automatic or require employees to opt in?
• Network Providers: Are dependents included in the same provider network as employees? Are there any restrictions on accessing services?
• Regulatory Compliance: Are there legal or regulatory requirements regarding dependent coverage that the company must adhere to?
• Impact on Recruitment and Retention: How might offering dependent coverage influence employee recruitment and retention strategies?

Can Employees Keep Their Medical Benefits When They Leave the Company?

Medical coverage is usually lost when changing jobs. However, a “portability” option can be added to the group medical plan. This allows the employee who leaves your company to convert existing group cover to individual cover.

This is particularly vital for employees with pre-existing conditions, as it saves them from having to undergo another round of underwriting with a new insurer and risking the exclusion of their pre-existing conditions under the new plan.

Employee Compensation Insurance (ECI) vs. Group Medical Insurance (GMI)

Summarizing what we have gone through, here’s a comparison between Employee Compensation Insurance (ECI) and Group Medical Insurance (GMI):

Group Medical Insurance Options for Startups/ SMEs

The more employees you have, the more options and discounts you get. The standard minimum of employees needed to start a Group Medical Plan ranges between 3-5, but some insurance providers are willing to work it out for a group of 2.

The number of employees is one of the determining factors on whether the company is regarded as a startup, SME, or an established enterprise/ MNC.

Startups

When starting small, employers can get an individual plan per employee or a micro group plan. The benefit of a micro group plan is a higher degree of flexibility brought by the ability to remove/add employees and be charged pro rata.

SMEs

When your company starts to scale (~10 employees), you can explore Medical History Disregarded (MHD) group insurance policies. This means that employees (and their dependents) are fully covered regardless of their medical history. You will also be eligible for a discount to a certain extent.

Once your company has over 10 employees, you will have greater margin to negotiate for MHD or more discount. From this milestone, you will have more plan and insurance provider options, since you have met the number of employees where risks are likely to be evenly distributed.

Pacific Prime works with many reputed insurance providers and has years of experience finding comprehensive GMI for businesses of all sizes and industries. Contact our team of expert advisors on anything insurance!

Group Medical Insurance for MNCs/ Large Corporations

While Medically History Disregarded (MHD) policies and discounts are almost guaranteed for MNCs or large corporations, established enterprises should be thinking more about the delivery of insurance coverage to their employees.

This is where flexible benefits can be useful. Flexible benefits allow employees to select from a menu of insurance and non-insurance benefits, and customize the package into one that best fit their personal and family needs.

Administering Group Medical Insurance Through Flexible Benefits

There are a total of two variations of flex benefit programs— Mini Flex and Full Flex. 

It empowers employees to modify (tier up or tier down) the group medical benefits that they were offered to suit their needs and preferences, by customizing insurance coverage that enhances coverage, improves employee satisfaction, and optimizes costs.

Direct Advantages

Employers can effortlessly provide benefits that appeal to all employees. Flexible benefits platforms offer enhanced visibility into costs, allowing employers to manage expenses more effectively. The automation features of a flexible benefits platform also save employers time, money, and reduce stress over the long term.

Moreover, employers can standardize their benefits across different business units while maintaining their benefits structure and adjusting the amount of flex spending credits.

Indirect Advantages

When employees have their needs and preferences met through flexible benefits, it boosts their happiness and loyalty to the company. This approach encourages them to take charge of their health, resulting in improved well-being and productivity.

The ability to make real-time adjustments to their benefits selection through flexible platforms enhances the overall employee experience, aligning with the technological expectations of younger, tech-savvy workers. This not only drives employee engagement but also benefits employers significantly.

Implementing Flexible Benefits

1. Designing the Flexible Benefits Plan

• Needs Assessment

  • Conduct surveys to understand employee needs regarding health and wellness benefits.
  • Analyze demographics to identify common health concerns and preferences.

• Benefit Options

  • Core Health Insurance: Offer a base level of Group Health Insurance that covers essential medical services.
  • Optional Add-Ons: Include options like dental, vision, mental health services, and wellness programs.
  • Family Coverage: Allow employees to extend coverage to dependents, including spouses and children.

2. Cost Management

• Fixed Benefit Allowance

  • Set a budget for flexible benefits, providing employees with a fixed allowance to spend on their chosen options. This helps control costs while giving employees the freedom to select what they value most.

• Premium Contributions

  • Employees can contribute a portion of their salary towards additional coverage options, allowing the company to manage overall expenses while offering more comprehensive benefits.

3. Enhanced Employee Engagement

• Empowerment and Choice

  • Providing employees with the ability to choose their benefits increases their engagement and satisfaction. Employees feel valued when they can tailor their coverage to suit their lifestyle and health needs.

• Communication and Education

  • Implement educational programs to help employees understand their options. Use workshops, webinars, and informational materials to explain how to navigate the flexible benefits plan effectively.

4. Technology Integration

• Online Platforms

  • Utilize digital platforms for enrollment and management of flexible benefits. This streamlines the process, making it easier for employees to review options and make selections.

• Data Analytics

  • Use analytics to track employee utilization of benefits. This data can inform future plan adjustments, ensuring offerings remain relevant and valuable.

Pacific Prime’s Flex Benefit Portal

Pacific Prime CXA Flex Benefit Portal is the all-in-one administrative platform for flexible employee benefits. Incorporated with cutting-edge technology, it is designed to streamline the process of employee benefits management and help employers gain a complete understanding of their workforce’s health and wellness.

Easily Select Benefits that Match Your Employees’ Needs

Employees can freely select appropriate benefits suitable for their lifestyles and requirements, and see the summary of their flex spending account.

Enhance Benefits by Shopping for Items

A wellness marketplace is made available for employees to purchase additional health and wellness products using their flex spending account. The money available inside the account varies, depending on the level of group medical insurance coverage they opt for.

Employees can also link their personal credit cards to the e-shop and buy a range of products.

Transparent Claims Process

The platform acts as the on-point destination for claims and evidence submission, which streamlines the claims process with claims status for employees’ reference for extra transparency.

Allow Employees to Take Charge of Their Own Health and Well-Being

The system can also manage employees’ profiles individually to provide account owners with personalized insights about their health risks, suggestions for a healthy lifestyle, and more. All they need is to upload their hospital health screening results, or simply an onsite or online lifestyle assessment and health screening.

Frequently Asked Questions

What are the legal requirements for providing Group Medical Insurance in Hong Kong?

Employers in Hong Kong are not legally mandated to provide Group Medical Insurance, but many choose to offer it to attract and retain talent. It’s important for companies to understand local labor laws and any industry-specific regulations that may influence their benefits offerings.

How can startups and SMEs afford Group Medical Insurance for their employees?

Startups and SMEs can manage costs by exploring flexible benefits plans, which allow employees to choose from a range of options tailored to their needs. They can also negotiate with insurance providers for competitive rates or Medical History Disregarded (MHD) policy.

How does Group Medical Insurance impact employee productivity in Hong Kong?

Group Medical Insurance ensures that employees have access to necessary healthcare services, which leads to better overall health and reduced absenteeism, thus they are more likely to focus on their work, contribute positively to the company, and maintain higher levels of engagement and morale.

Finding the Best-Fitting Group Medical Plan

As your go-to health insurance broker, Pacific Prime has over 20 years of experience offering corporate insurance solutions to businesses of all sizes. Our team of insurance experts can help you strategically budget your expenses to maximize the results on employee attraction and retention amidst the talent war.

If your company is already insured, we can review your company’s GMI package, identify gaps between coverage and employees’ expectations, cut down expenses on inefficiently utilized benefits, and ensure that every penny spent on insurance coverage is well-invested for company growth and resilience.

Contact our expert advisors today, get a quote comparison from reputed insurers, or request a demo of our Flexible Benefit Portal directly.

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Eric Chung

Content Creator at Pacific Prime Hong Kong

Eric is an experienced content writer specializing in writing creative copies of marketing materials including social media posts, advertisements, landing pages, and video scripts.

Since joining Pacific Prime, Eric was exposed to a new world of insurance. Having learned about insurance products extensively, he has taken joy and satisfaction in helping individuals and businesses manage risks and protect themselves against financial loss through the power of words.

Although born and raised in Hong Kong, he spent a quarter of his life living and studying in the UK. He believes his multicultural experience is a great asset in understanding the needs and wants of expats and globe-trotters.

Eric’s strengths lie in his strong research, analytical, and communication skills, obtained through his BA in Linguistics from the University of York and MSc in Teaching English to Speakers of Other Languages (TESOL) from the University of Bristol.

Outside of work, he enjoys some me-time gaming and reading on his own, occasionally going absolutely mental on a night out with friends.

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