Considering Employee Insurance; Labour Day 2024

May First worldwide is Labor Day or international workers day. In many countries the day will be a public holiday, as workers relax and reflect on their labor. This is also a great day for businesses and companies, in turn, to think about their employees. Specifically, the protections they are offering to workers, and the benefits they may be including in any employee compensation packages.

In Hong Kong there are specific types of insurance that are all employers are required to purchase for their employees. There are other types of insurance that can be purchased completely at an organization’s discretion, with no rules or regulations surrounding their uptake. This makes navigating the employee insurance landscape in Hong Kong a tough proposition— there are a tremendous number of options for any business to consider.

Mandatory Employee’s Insurance in Hong Kong

In Hong Kong the only universally required form of Insurance for all businesses, and employers in the city, is Employees Compensation Insurance. This form of coverage also known simply as EC Insurance, is designed to protect an employer’s liability towards workers injuring themselves in the routine course of their employment.

Employees Compensation Insurance is a mandated purchase under Hong Kong law for all employers in the city. This means that, irrespective of the workers position, duration or length of employment, employment status as either full time or part time, or their salary, if a person is paid to perform a job as an employee, then they must be covered by Employees’ Compensation Insurance. While this can seem onerous, and feel like an additional burden placed on businesses as they now have to go out and find this extra form of protection specifically for workers, employees compensation insurance can actually be invaluable in the event of a workers compensation claim.

Through Employee’s Compensation Protection a business is not financially liable for workplace injuries. An employer’s liability is offset through the coverage offered by this type of protection — when a worker gets injured on the job, instead of settling any liability claims through the business’ finances, the claim will be settled by the insurance. This gives employees the security of knowing that they will have financial assistance in the event that they suffer an injury due to their job, while also protecting businesses against the financial consequences of possible workplace injuries.

Expanding Benefits with Health Insurance

Health insurance is not a mandated form of insurance in Hong Kong. There are no rules stating that a business must take out health insurance for the benefit of its employees. There is nothing in Hong Kong law that requires an organization to purchase any form of health insurance.

However, extensive studies have been conducted showing that a healthy workforce is a productive workforce. Further to this, in a post COVID world, there is a prevailing sense of global medical anxiety. Both of these concerns can be addressed through an employer provided medical insurance scheme.

Group health insurance plans are normally defined as policies which include five or more members. In some cases, it may be possible to obtain group health insurance coverage on a group of as few as three people, but in most cases the five-person benchmark is normally required. This means that any business with at least five employees is likely able to obtain group coverage for its workers. But why would a company want to offer health insurance to employees?

Aside from the previously mentioned productivity, employees who receive a health insurance benefit from their employer often have higher rates of satisfaction with their job and are less likely to present with absenteeism. Further to this, many group health insurance products will offer the ability to cover preexisting medical conditions. This is in direct contrast to individual health insurance plans where preexisting conditions are likely excluded outright from coverage.

By tailoring group health insurance options to provide different levels of coverage to employees of differing seniority, businesses are able to create robust solutions to employee healthcare needs at a relatively affordable price point. This, in turn, fosters employee satisfaction as workers are no longer worried about their ability to access high quality healthcare, and ensures that the business is being proactive when it comes to addressing long term medical concerns in the workforce. Corporate and group health insurance options are not going to be for every company, but when put in place can lead to positive outcomes for all key stakeholders.

Group Personal Accident and Critical Illness Protection

Suffering from a long-term illness or receiving a serious injury which prevents you from being able to work and earn an income is a nightmare scenario for most people. Similarly to group health insurance, there is no requirement for businesses or companies in Hong Kong to purchase personal accident or critical illness protection for their employee, but opting to do so can afford your workforce with vital peace-of-mind that they are protected in a worst-case scenario.

Personal accident insurance and critical illness insurance both work along the same principles. In the event that you suffer from a condition that would render you unable to work for an extended period of time, both these policies will provide the beneficiary (or policyholder) with a lump sum payment to assist with their finances. For companies and industries like construction offering a personal accident benefit to employees can prove vital in attracting and retaining the best possible workforce. Similarly, offering a critical illness benefit to workers in a post COVID world ensures that they have the security of knowing critical assistance will be on hand should they become seriously sick.

Under the payments made by both personal accident and critical illness insurance policies the employee has the freedom to use that money as they see fit — whether that is medical treatment payments, mortgage payments, school payments, or even setting up their home to accommodate a possible disability. Like group health insurance companies have incredible flexibility when it comes to setting up this type of policy, and there is no right answer or, in fact, any requirement for this type of insurance to be put into place. However, in an age of uncertainty offering extended benefits to employees can be an exceptional way to manage inherent organizational risks.

Business Insurance in Hong Kong

When it comes to business insurance in Hong Kong there were no right answers. In many cases the products that you purchase and the correct solutions for your company will be largely dependent on your own individual circumstances and those of your workforce. From the mandatory employee’s compensation coverage that is required under Hong Kong law, through to employee benefit options like group health insurance personal accident insurance and critical illness insurance, all the way through to pure risk products like professional indemnity and commercial goods liability, protecting your company from the risks It face will likely mean having to go through those risks on a granular level. From there it is a case of identifying your gaps and building the solutions that work best for those needs.

CCW Global is an expert independent insurance broker specializing in business risks and employee benefits advice. With our no-cost, no-obligation consultation processes your key stakeholders are empowered to make the decisions that best meet the needs of your organization and find the missing pieces of your risk management portfolio.

For more information, or to request a consultation, please Contact Us Today.

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