SELF-FUNDED HEALTH PROGRAM

Lawyers Discussing New Case N6fdptv

Some Cambodian companies have their ‘self-funded’ health program to cover their employees’ medical expenses. Thoughts for Khmer leaders and HR professionals.

 
WHAT IS A SELF-FUNDED HEALTH PROGRAM?
It is a plan where the corporation/ company decides to manage by themselves all the financial risks involved with the cover of employees’ medical expenses. The company (not an Insurance company) will pay out the claims for their employees. Such organizations need to have a fund to manage the cost and administer the entire coverage plan. On one hand, there is no premium to pay to an Insurance company but on the other hand, direct and indirect financial risks.

 

ADVANTAGES/ PROS
– Cost of Insurance: The corporations will only have to pay the actual expenses of their employees and no premiums to a Health Insurance specialist
– Full Flexibility: The scheme can be completely customized without having to compromise with an Insurance company on the plan. For example, a company may decide to offer a wide coverage on Childbirth or can limit hospitalization to one Hospital only.

 

DISADVANTAGES/ CONS
– Fringe Benefits Tax in Cambodia 20%: In Cambodia, the fringe tax will be applied to Cambodian companies on self-funded program. This is one of the reasons why many Cambodian companies pulled out from this model….
– Financial risks (Medical expenses, Accident…unpredictable): Insurance by essence requires expertise in financial risk management. Corporations take major risks on their employees’ medical expenses and Accidents.
– Operations management: Designing a policy, having a solid HR team to support employees, processing the claims and paying-out…..All those steps require know-how and efficient IT systems. Those aspects can quickly overwhelm and become costly.
 

 

  • SafetyNet Cambodia offers Health Insurance plans to Cambodian corporations including Illness & Accident, Childbirth, with a Worldwide cover.
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