MANILA, Philippines — On January 12, the Philippine Health Insurance Corp. (PhilHealth) announced its decision to proceed with the scheduled hike in member contributions for 2024. The adjustment will result in the premium rate increasing from the existing 4% to 5%.
At the same time, the maximum monthly basic salary ceiling will go up from ₱80,000 to ₱100,000. These adjustments follow the Universal Health Care Act, passed by President Duterte in 2019, which mandates an increase in premium contributions to 5% for the years 2024 and 2025.
With these changes, employers will need to plan and adjust their payroll systems to accommodate the increased PhilHealth premium rates.
Read more to learn how the latest PhilHealth contribution changes affect your business to stay ahead in 2024.
Understanding PhilHealth Contributions and Premium Rates
What Is a PhilHealth Contribution?
A PhilHealth contribution is a payment that individuals and employers make to the Philippine Health Insurance Corporation. It helps fund a health insurance program that provides coverage for medical expenses of Filipinos.
By law, most citizens are required to pay into PhilHealth through deductions from their salary if employed, or through individually paid premium contributions if self-employed or unemployed. It aims to help make healthcare more financially-accessible and provide a safety net for all Filipinos during medical emergencies or hospitalizations.
Who Are the Different Types of PhilHealth Contributors?
There are two types of PhilHealth contributors: direct and indirect contributors.
- Direct Contributors
- Formally employed workers
- Kasambahays
- Overseas Filipino Workers (OFWs)
- Self-employed and professional practitioners
- Filipinos living abroad, including those with dual citizenship.
- Lifetime members
- All Filipinos aged 21 and above who can afford to pay
- Indirect Contributors
- Indigents identified by the DSWD
- Senior citizens
- Beneficiaries of Pantawid Pamilyang Pilipino Program (4Ps)
- Persons with disabilities (PWDs)
- Previously identified at point-of-service / sponsored by LGUs
- Sangguniang Kabataan officials
- Filipinos aged 21 and above who cannot afford direct payments
What is a Philhealth Contribution Rate?
The PhilHealth contribution rate is the percentage of a person's earnings that goes toward paying their PhilHealth premiums to be covered under health insurance. Under the Universal Health Care Act, this rate is set to go up by half a percent each year, starting in 2021, until it gets to 5% in 2024 and 2025.
Here’s a breakdown of PhilHealth’s contribution rates from 2019 to 2024/2025.
| Year | Monthly Salary Basis | Premium Rate | Monthly Premium |
|---|---|---|---|
| 2019 | ₱10,000 | 2.75% | ₱275 |
| 2019 | ₱10,000.01 to ₱49,999.99 | 2.75% | ₱275 to ₱1,375 |
| 2019 | ₱50,000 | 2.75% | ₱1,375 |
| 2020 | ₱10,000 | 3% | ₱300 |
| 2020 | ₱10,000.01 to ₱59,999.99 | 3% | ₱300 to ₱1,800 |
| 2020 | ₱60,000 | 3% | ₱1,800 |
| 2021 | ₱10,000 | 3.50% | ₱350 |
| 2021 | ₱10,000.01 to ₱69,999.99 | 3.50% | ₱350 to ₱2,450 |
| 2021 | ₱70,000 | 3.50% | ₱2,450 |
| 2022 | ₱10,000 | 4% | ₱400 |
| 2022 | ₱10,000.01 to ₱79,999.99 | 4% | ₱400 to ₱3,200 |
| 2022 | ₱80,000 | 4% | ₱3,200 |
| 2023 | ₱10,000 | 4% | ₱400 |
| 2023 | ₱10,000.01 to ₱79,999.99 | 4% | ₱400 to ₱3,200 |
| 2023 | ₱80,000 | 4% | ₱3,200 |
| 2024-2025 | ₱10,000 | 5% | ₱500 |
| 2024-2025 | ₱10,000.01 to ₱99,999.99 | 5% | ₱500 to ₱5,000 |
| 2024-2025 | ₱100,000 | 5% | ₱5,000 |
Computing Your Employee’s PhilHealth Contribution in 2024
Let's now learn more about how to calculate an employee's monthly PhilHealth contribution with the new rates for 2024.
Consider Employee A, who earns a monthly salary of ₱25,000. To determine their monthly premium with the new 5% rate, apply the following formula:
Basic Salary x 5% (0.05) = Premium Rate
Calculating Employee A's monthly PhilHealth contribution gives us:
₱25,000 x 0.05 = ₱1,250
To find out the contribution split, divide the monthly premium in half:
₱1,250 (Monthly premium) ÷ 2 = ₱625 (Employee’s share)
As a result, both Employee A and their employer will contribute ₱625 each to PhilHealth every month.
What Does the 5% PhilHealth Contribution Rate Increase Mean for Employers?
The new 5% PhilHealth contribution rate for 2024 can have a huge impact on employers and employees. Here’s what every employer should know:
Compliance with Regulations and Avoidance of Penalties:
Staying compliant with the updated PhilHealth regulations is crucial for employers if they want to protect their reputation and save money. Employers must properly deduct, remit correct premiums, and report payments to PhilHealth according to existing rules to avoid penalties under PhilHealth Circular 003-2015.
PhilHealth can recover claim payments and unpaid premiums plus interest from delinquent, under-remitting, non-remitting, and non-reporting employers as per The Revised Implementing Rules and Regulations of the National Health Insurance Act of 2013.
- Claim Payments: These are the reimbursements PhilHealth makes for medical costs incurred by its members.
- Premiums: Regular contributions that employers are required to pay on behalf of their employees to maintain their PhilHealth coverage.
Fines are Php5,000-10,000 x number of employees for non-compliance.
PhilHealth can also pursue legal action for failure to comply. Employers must be diligent in applying the new rate to avoid such penalties to save costs and ensure they're following the legal requirements.
Financial Planning and Budgeting:
The contribution increase might impact the overall cost of employment and benefits budgets for businesses. Employers will have to account for the higher expense in their financial planning, possibly requiring adjustments to benefits packages or employee compensation to balance the additional cost.
Employee Communication and Relations:
Employers should communicate the changes in contribution rates to their employees clearly and effectively. Understanding the increase and its benefits can help maintain positive employee relations and ensure that employees are aware of and appreciate the value of their health benefits.
Long-term Health Benefits and Employee Welfare:
While there may be a short-term financial cost, the increase in Philhealth contributions is meant to strengthen the overall healthcare system. A better healthcare system means employees can access improved health services and facilities.
As explained by Philhealth's spokesperson Kleah Gayle Guevara, the purpose is to expand Philhealth’s programs, improve benefits, and ensure the corporation can sustain payments for member benefits.
In the long run, having a healthier workforce through a robust public healthcare system can result in fewer sick days, higher productivity, and a more vibrant workplace environment for employees. So while there is an immediate cost, the goal is a healthcare system that supports community well-being over time.
Payroll Processing Adjustments:
Lastly, employers will need to update their payroll systems to reflect the new 5% contribution rate. This change requires recalculating the monthly health insurance deductions for each employee to ensure accurate withholdings and contributions.
The increase may also necessitate payroll software updates or discussions with payroll service providers to implement these changes efficiently.
Employers should take proactive steps to integrate these changes into their operations, communicate effectively with their workforce, and leverage the enhanced healthcare benefits for the betterment of their organization and employees.
Frequently Asked Questions
How Do I Pay My Philhealth Contributions?
You have several options for payment, including through your employer (for those who are employed), direct payment at PhilHealth offices, online payment channels, or authorized collection agents.
What Benefits Does Philhealth Offer?
PhilHealth covers a wide range of health services, from hospital stays and surgeries to outpatient care and maternity services. They regularly update their benefit packages, so it's a good idea to check their website for the most current information.
Can My Family Get Benefits from My PhilHealth Membership?
Yes, your legal dependents — like your spouse, children under 21 who aren't married or employed, and your parents over 60 — can also benefit from your PhilHealth coverage.
Can Members Continue Paying Into PhilHealth After They Retire?
Yes, individuals who have retired can continue their PhilHealth membership by paying their monthly premiums as lifetime members. To qualify, the retiree needs to be at least 60 years old, which is the retirement age in the Philippines, and must have made at least 120 monthly contributions while they were working.
What if I need to update my membership information?
You can update your information by submitting a filled-out PMRF (PhilHealth Member Registration Form) at any PhilHealth office or through their online portal. It's important to keep your info up to date, especially if there are changes in your family status, address, or employment.
Comply with PhilHealth’s New 5% Contribution Rate with Sprout Payroll
Adapting to PhilHealth's new 5% rate in 2024 is an important step for businesses to ensure compliance and showcase their support for employees' health. While it involves managing costs, updating communications, and adjusting payroll, this transition offers a chance to enhance your business operations and employee well-being efficiently.
That's why now is the time to let Sprout Payroll take care of it for you.
Our automated solution seamlessly handles all PhilHealth computations and reporting based on the latest regulations. We take the workload off your shoulders so you can focus on your business and managing your people.
Stay on track and view the 5% rate as a stepping stone to success.
Contact us today to prepare for PhilHealth's increase while we empower you to stay compliant and ahead in 2024.
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