Comparison of Group Insurance Types for SME Employees in Southeast Asia and India

Small and medium enterprises (SMEs) in Southeast Asia and India commonly consider three main group insurance types for their employees: Group Hospitalization & Surgical (GHS), Group Personal Accident (GPA), and Group Term Life (GTL). This guide compares these options in plain English to help SME owners make informed decisions.

Overview of Insurance Types

Group Hospitalization & Surgical (GHS)

GHS is a group medical insurance plan that covers the cost of an employee's hospital treatment and surgery. It helps pay for hospital bills if employees fall sick or get injured and need hospital care.

What it Covers

• Inpatient hospitalization costs (room and board, ICU stays, operation theater fees)
• Surgical procedures (surgeon and anesthetist fees)
• Related medical services (ambulance fees, diagnostic tests during hospitalization)
• Some plans include pre-hospitalization and post-hospitalization expenses

What it Excludes

• Pre-existing conditions (at least initially)
• Initial waiting period (typically 30 days)
• Certain illnesses in first year
• Elective or non-essential care (cosmetic surgery)
• Dental treatments (unless due to accident)
• Maternity and infertility treatments
• Psychiatric care
• Occupational injuries covered by workers' compensation

Who it Protects

This insurance primarily protects employees by ensuring they can get needed hospital treatment without facing crippling costs. Some SMEs extend coverage to employees' dependents as well.

Country-by-Country Status

• Singapore: Optional for locals; Mandatory for foreign Work Permit/S Pass holders
• Malaysia: Optional for locals; Mandatory for foreign workers (FWHS)
• Vietnam: Optional (supplements compulsory national health insurance)
• Indonesia: Optional (supplements mandatory BPJS Kesehatan)
• Thailand: Optional (supplements Social Security healthcare)
• Philippines: Optional (supplements mandatory PhilHealth)
• India: Mandatory for all employees since 2020

Group Personal Accident (GPA)

GPA is a group insurance policy that covers accidental injuries or death sustained by employees, whether at work or outside work. It provides financial compensation for unexpected mishaps.

What it Covers

• Accidental Death Benefit (lump sum to beneficiaries)
• Permanent Disablement (full or partial disability payments)
• Accidental Dismemberment or Injury (payments based on injury schedule)
• Accident Medical Reimbursement (medical expenses from accidents)
• Temporary Total Disablement (weekly benefits during recovery)

What it Excludes

• Illness or natural causes
• Self-inflicted injuries or suicide
• Influence of alcohol or drugs
• Hazardous activities (skydiving, bungee jumping, etc.)
• War and civil commotion
• Pregnancy-related injury
• Criminal acts

Who it Protects

GPA protects both employees and their families by providing financial support in case of accidents. For employers, it fulfills a moral duty of care and protects the business from unexpected financial burdens.

Country-by-Country Status

GPA is optional in all seven countries, though work injury insurance is mandatory in various forms:

• Singapore: Optional (work injuries covered by mandatory WICA)
• Malaysia: Optional (work accidents covered by SOCSO)
• Vietnam: Optional (occupational accidents covered by social insurance)
• Indonesia: Optional (work accidents covered by BPJS Ketenagakerjaan's JKK)
• Thailand: Optional (work injuries covered by Workmen's Compensation Fund)
• Philippines: Optional (work-related accidents covered by Employees' Compensation)
• India: Optional (work injuries covered by Employees' Compensation Act/ESI)

Group Term Life (GTL)

GTL is a group life insurance plan that provides a death benefit to an employee's family or beneficiary if the employee passes away during the coverage period. It often includes Total and Permanent Disability (TPD) coverage.

What it Covers

• Death Benefit (lump sum payment for death from any cause)
• Total & Permanent Disability (payment if employee becomes permanently unable to work)
• Terminal Illness Benefit (early payout for terminal diagnosis)
• Critical Illness Rider (optional coverage for serious illnesses)
• Accidental Death & Dismemberment Rider (additional payment for accidental death)

What it Excludes

• Suicide (typically excluded for first 1-2 years)
• Acts of war or terrorism
• Dangerous hobbies (in some policies)
• Death while committing a crime

Who it Protects

GTL primarily protects the employee's dependents (family). In the event of an employee's death, their beneficiaries receive financial support to help with funeral costs, outstanding loans, and lost income.

Country-by-Country Status

GTL is optional in all seven countries, though some have social security schemes providing basic death benefits:

• Singapore: Optional (CPF provides some death payout from savings)
• Malaysia: Optional (EPF provides a small death benefit)
• Vietnam: Optional (social insurance pays survivor benefits)
• Indonesia: Optional (BPJS Ketenagakerjaan's JKM provides a basic death benefit)
• Thailand: Optional (Social Security gives some survivorship benefits)
• Philippines: Optional (SSS provides death benefits to beneficiaries)
• India: Optional (EPF-linked EDLI scheme provides compulsory life coverage for EPF members)

Practical Insights for SMEs

When choosing between these insurance types, SMEs should consider:

• Employee Needs & Expectations: Medical coverage (GHS) is typically the most demanded benefit
• Nature of Business / Risk Exposure: Higher-risk industries should prioritize all three types
• Legal Requirements: Ensure compliance with local laws first
• Company Size and Budget: Start with GHS, then add GPA and GTL as budget allows
• Insurance Packages: Consider bundled options that include multiple coverage types
• Talent Attraction & Retention: Comprehensive benefits help attract and retain employees

Conclusion

An ideal SME benefits package in Southeast Asia or India should include:

1. Group Hospitalization & Surgical (GHS) as the foundation
2. Group Personal Accident (GPA) for accident protection
3. Group Term Life (GTL) for death/disability coverage

By providing all three types, an SME covers "health, wealth, and family protection" for its employees. This holistic approach not only fulfills legal obligations and mitigates risks but also fosters a positive and caring workplace culture.