More companies turn to insurance firms to handle workers' health

Sudibyo M. Wiradji Contributor Jakarta

Although there is little public awareness of the need of insurance benefits, many life insurance companies are experiencing a growing demand from corporate clients.

Among the popular insurance services offered to companies include life insurance, health insurance and pension plans.

The insurance program a corporate client takes usually depends on the results of negotiations between the employer and representatives of the insurance provider.

Insurance firms offer their products based on the companies' needs in relation to their employees' welfare. Each insurance provider has its own terms and conditions such as the minimum number of employees needed to ensure eligibility for participation in the program. But on average the number of employees should at least 25 for outpatient insurance and 10 employees for an inpatient insurance package.

Particular insurance providers also include age in the terms. At PT Asuransi Jiwa Central Asia Raya, for instance, the minimum age is set at 15 years old and the maximum age is 25 years old.

The insurance providers will issue participant cards, depending on what service a company takes, which employees of participating company can use when needed. Commonly, the card issuance takes between seven days and 14 days after the required paperwork is completed.

When a participant or his or her family member falls ill and has to be hospitalized, he or she is free to select the appointed hospital, commonly one close to his or her home. The insurance provider will cover all costs for medical treatment.

The amount of premium a company should pay per year depends on the health insurance scheme selected. The minimum premium for inpatient insurance package set by PT Asuransi Jiwa Manulife Indonesia, for instance, is Rp 15 million (about US$ 1,600) per year.

"The premium can be paid once or in two lots," said the company's assistant vice president Cynthia Bondad, adding that companies that participate in outpatient insurance are also required to pay the premium but the amount is less than Rp 15 million.

Some health insurance products also offer a reimbursement system under which the participant will have to pay the medical expenses first and the insurance provider through the employer will reimburse later. Commonly, the reimbursement period will take two weeks at the maximum.

In addition to health and life insurance products, companies' interest in pension plans is also on the rise. Unlike life or health insurance products that are mostly based on a policy set by the respective insurance providers, the pension program should be in compliance with the pension law.

For example, based on the Pension Law No. 11, 1992, the maximum contribution that must be paid by an employee should not exceed 20 percent of his or her salary. Also, according to the pension law, the pension benefit is payable when the participant reaches his or her Normal Pension Age (NPA) determined by the employer between the range of 50 years to 65 years of age. And if a participant retires early, the pension benefit is payable at least 10 years before he or she reaches the normal pension age determined by the employer, except if the employee dies while still in the employ of the company. In this case the total amount of accumulated pension is less than Rp 50 million, the payment should be made directly to the beneficiary.

The participants will usually receive a report on their accounts once every six months.

Insurance providers offering life, health and pension plans include PT Asuransi Jiwa Central Asia Raya (CAR), PT Asuransi Jiwa Manulife Indonesia (AJMI), PT Asuransi Allianz Life Indonesia and PT ING Aetna Life Insurance. PT Asuransi Jiwa John Hancock Indonesia focuses on providing pension plan service.

The health insurance programs offered by PT CAR to corporate clients include Prevensia, which contains inpatient, outpatient, dental treatment, maternity and glasses with a minimum of 250 participants.

"For life insurance, we have Personal Accident (PA) and Term Life," said CAR's Director Hero Samodra.

The number of companies participating in CAR's insurance programs continues to increase, mostly coming from manufacturing companies.

CAR also provide pension plan. "Our pension program is defined contribution. Every member or participant is free to decide the contribution but it should be at least 10 percent of their salary," he said.

PT Asuransi Jiwa Manulife Indonesia (AJMI) offers insurance programs for corporate customers to provide a "sense of security" for employees.

Types of programs offered include Term Life Insurance, Accidental Insurance, Total Permanent, Disability Insurance, Hospital and Surgical Insurance, Outpatient Insurance, Dental Insurance, Optical Insurance and Maternity Insurance.

PT AJMI's pension programs are managed by Dana Pension Lembaga Keuangan (DPLK) Manulife Indonesia.

Cynthia said the minimum premium for corporate clients is Rp 1 million per company. "It is up to the company how many members participate in the pension plan," she said.

In the area of pension programs, the company has come up with several innovative packages that also provide customers with investment benefits.

"We have carefully designed our investment options to maximize the return for each participant while minimizing the underlying risk," she said.

The DPLK Manulife Indonesia offers five investment funds ranging from low risk with potentially lower return funds to high risk with potentially higher return funds.