Economy premium

Ian Alfredo Magno .

THE recent increase in premium has brought about several questions, perhaps confusion too, especially among members in the Formal Economy sector of Philhealth.  Formal economy sector refers to that segment of Philhealth’s membership clientele who are employed either in the private or in government offices, bureaus or agencies.

Foremost, the coverage of employed Filipinos under Philhealth is mandated by law, particularly Section 16 of the Revised I.R.R. of Republic Act 10606 or the National Health Insurance Act of 2013, which states that members in the formal economy shall continue paying the monthly contributions to be shared equally by the employer and employee at a prescribed rate set by the Corporation not exceeding five percent (5%) of the same IRR as the basic monthly compensation paid regularly for service rendered.

To address certain queries of this sort pertaining to the premium concerns of this particular sector, Philhealth recently released Circular No. 2018-0001 dated 24 January 2018 re: Clarificatory Guidelines on the Computation of Premium for the Members under the Formal Economy.  It specifically clarifies the following issues, thus:

“The term ‘Monthly Basic Salary (MBS) shall be understood to mean as the fixed basic rate of an employee which shall not include sales commission, overtime pay, allowances, thirteenth-month pay, bonuses or other gratuity payments.  Further to this, those deductions to the employee’s pay occasioned by his/her undertime, tardiness, leave(s) without pay, absences, or other similar circumstances shall also be excluded in this computation.

For monthly-paid and daily-paid employees, the MBS shall be computed based on the estimated Equivalent Monthly Rate (EMR) consistent with the 2010 Edition of the Department of Labor and Employment-Bureau of Working Condition’s Handbook on Workers Statutory Monetary Benefits wherein the MBS is clarified as follows:

1. For daily-wage workers with a 6-day work week schedule, who do not work and are not considered paid on Sundays or rest days, shall be computed as follows:

MBS = Applicable Daily Rate x 313 / 12

Where 313 days/year shall refer to: 299 working days, 11 regular holidays and 3 special holidays

1. For daily-wage workers with a 5-day work week schedule, who do not work and are not considered paid on Saturdays, Sundays or rest days shall be computed as:

MBS = Applicable Daily Rate x 261 / 12

Where 261 days/year shall refer to: 247 working days, 11 regular holidays and 3 special holidays

1. Further, the daily rate for workers paid by results, including home workers and those who are paid on piece rate, takay, pakyaw, or task basis, shall receive not less that the prescribed minimum wage rates under the Regional Wage Order for normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof. The monthly rate for the same shall then be computed based on the five-day or six-day work week schedule of operations of the business establishment.
2. All government or private employers are required to register their employees and their qualified dependents by submitting a list of their employees complete with their salary base and other documents as may be required. No exemptions will be granted as this is a mandatory disclosure demanded from all government and private employers to ensure that they remit their employees’ premiums in accordance with the prescribed rates.
3. Relative to employees with no earnings due to a lengthy leave without pay for more than 6 months, provisions of PhilHealth Circular No. 32, s-2003 shall still be in effect.”

(Ian Alfredo T. Magno is a lawyer based in Cagayan de Oro. He is a legal officer at Philhealth. E-mail: ianalfredom@gmail.com)