HRSINGAPORE Community Discussions

Medical Opt Out


Dear All,

I'm new in the HR field. I came across Medical Opt Out (employee choose to opt out on company medical scheme). The company in return gives them a sum of money every year.

Isn't company medical benefits provided if you choose not to have it is your personal accord. Why is there a need for company to give a token for opting out.

Is this a common practice? What is the pros and cons?

Appreciate if someone can shed some lights on this topic.






Some employees either have their own personal medical insurance or are covered by their spouse's company insurance as well. So having the additional medical cover by the company does not benefit them any further. But there is no reason for them to Opt out if there is no incentive to do so. Every employee who opt out is a savings to the company. I suppose the token is given to encourage those employees who do not need the cover to actively opt out. But allowing this opt out scheme carries some risk. Its important for the company to ensure that the person opting out, do have adequate medical insurance cover. But this is difficult to do, because the company may not know when the employee's other cover may lapse or spouse's company's dependant cover may cease. So there is always a risk that the employee may encounter a major medical occurrence when they are not adequately covered. Although the opting out is their choice, the company bears some responsibility because they allowed this option. Personally, I would not want my company to offer such an Opt out scheme just to save on the cost.

Cheng Hoo




I think it is medical insurance which you are referring.

WICA (Work Injury) is compulsory for an Employer to take up; insured for all employees which is also a requirement under Labour Law.

As for Medical Hospitalization, it is optional for employer to cover for Sporean & SPR. Almost 80% of Local employee insured through their own Insurance Company. Therefore most Employer may not provide such benefits but again minority may buys for their staff.

It will be an advantage if Company pays the premiums to insure for employees.

As it is added benefits given to employee but again some employee may choose to opt out and prefer to receive token fund instead, which probably practice by your existing Employer.




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