PhilHealth and the Universal Health Care Act

The public scheme is the National Health Insurance Program, run by the Philippine Health Insurance Corporation, better known as PhilHealth. The Universal Health Care Act, Republic Act No. 11223, was enacted on 20 February 2019, and under it every Filipino citizen is automatically included in the program.

Members fall into two groups. Direct contributors are people able to pay premiums, such as employees, the self-earning and professionals. Indirect contributors are everyone else, and the national government subsidises their premiums along with those of their qualified dependants.

A Filipino employee is therefore a PhilHealth member before you hire them. What hiring changes is who pays: as an employee they become a direct contributor, and the employer takes on remitting the premium.

What the employer remits

Employers must remit PhilHealth premiums for their employees. PhilHealth sets the premium as a percentage of monthly basic salary, between an income floor and an income ceiling, and announces the schedule for each year in an advisory. Use the advisory for the year you are paying in rather than last year’s table.

The salary base is narrower than total pay. Contributions are calculated on monthly basic salary alone, so commissions, overtime, allowances, bonuses and the mandatory 13th-month pay stay out of it. Questions about a particular employee go to the nearest PhilHealth Local Health Insurance Office.

Payroll guides add registration with the Social Security System (SSS) and with Pag-IBIG, the Home Development Mutual Fund, to the same set of employer duties. Neither one is health insurance, but both sit on the same payroll as PhilHealth.

HMO plans, the usual private benefit

Local advisers describe health maintenance organisation (HMO) plans as the private health benefit employers in the Philippines usually add on top of PhilHealth. Any such plan sits above PhilHealth rather than replacing it.

On tax, advisers report that group health and HMO premiums for employees have been treated as exempt from fringe benefit tax, although the point has been disputed in the past. Fringe benefit tax itself applies only to managerial and supervisory employees; benefits for rank-and-file staff fall under the rules for compensation income. Because the treatment has shifted before, check with a local adviser or tax professional in the Philippines before setting the benefit up.

For a remote hire, two design choices come first: whether the HMO plan covers only the employee or family members too, and whether anything is layered above it.

The Insurance Code and policies from abroad

The Philippines limits who may sell insurance there. Under the Insurance Code, an insurer needs a certificate of authority from the Insurance Commissioner to transact insurance business in the country, and agents and brokers need an Insurance Commission licence.

The Code also makes it an offence for anyone in the Philippines to procure applications for, issue or deliver policies of an insurer not authorized there when those policies cover risks situated in the Philippines. In a legal opinion, the Insurance Commission said even a single, isolated transaction counts.

The practical point for an employer: cover for staff in the Philippines is not a simple online purchase from any insurer abroad. Whether a particular insurer is authorized to cover someone in the Philippines needs settling with that insurer before anything is issued.

Where international cover fits

An international plan cannot replace PhilHealth for a Filipino employee. Membership is automatic for citizens and employer remittances for employees are mandatory, so a global plan can only top the local scheme up.

A top-up still has a job to do. A company with people in several countries may want one plan design across the whole team, or cover that follows an employee who travels for work, and that sits beside PhilHealth and any HMO plan rather than in place of them. Our overview of international health insurance for remote employees explains the layering country by country.

Hiring without a Philippine company

Employer of record guides say a US company without a Philippine entity usually hires through one. As those guides describe it, the EOR becomes the legal employer, registers the employee with PhilHealth, SSS and Pag-IBIG, remits the contributions and files withholding tax with the Bureau of Internal Revenue. Ask whether its package already includes an HMO plan, since that decides what is left to add.

A genuine independent contractor pays their own PhilHealth premiums as a self-earning direct contributor, and the client remits nothing for them. When the working relationship looks like employment, the label may not hold, and our page on health coverage for EOR employees and contractors abroad walks through the difference.

Asking Mithril1 for an introduction

Mithril1 does not sell, quote or recommend health plans. What we can do is introduce you to a benefits partner that handles international and remote-team health coverage, with eligibility, plans and pricing decided by the partner and the insurer.

Fill in the quote form on this page with where your people are based in the Philippines, how many of them there are, and whether they work through an EOR, your own entity or as contractors. Note any HMO plan they already have, and we will hand the request to a benefits partner.

A few useful answers

Common questions

Is my Filipino employee already a PhilHealth member?

Every Filipino citizen is automatically included in the National Health Insurance Program under the Universal Health Care Act. Once employed, they become a direct contributor and the employer remits PhilHealth premiums for them.

Can an international health plan replace PhilHealth?

It cannot for a Filipino employee. PhilHealth membership is automatic and employer remittances are mandatory, so an international plan works as a top-up alongside it.

What do employers in the Philippines usually add to PhilHealth?

Local advisers describe an HMO plan as the usual private health benefit. It sits on top of PhilHealth, and an international plan, where an employer wants one, is a further layer above both.

Which pay counts toward PhilHealth contributions?

Monthly basic salary only. Commissions, overtime, allowances, bonuses and 13th-month pay are left out of the base, and PhilHealth publishes each year’s rate, floor and ceiling in an advisory.

Can Mithril1 set up health cover for staff in the Philippines?

An introduction is what we provide. A benefits partner that handles remote and international teams takes the request from there, and the partner and the insurer set eligibility, plans and prices.

International Health Insurance for Remote Employees in the Philippines