Cost of Philhealth penalty

Ian Alfredo Magno

THIS issue is dedicated to reiterating Section 44 of Republic Act 7875 otherwise known as the “National Health Insurance Act of 1995” as amended by RA 9241 and RA 10606.

Paragraph c (1) of Section 44 thereof provides, thus:

“(c) Violations of an Employer –

“(1) Failure/Refusal to Register/Deduct/Remit the Contributions – Any employer who fails or refuses to register employees, regardless of their employment status, or to deduct contributions from the employee’s compensation or remit the same to the Corporation shall be punished with a fine of not less than Five thousand pesos (P5,000.00) multiplied by the total number of employees of the firm.

“Any employer or any officer authorized to collect contributions under this Act who, after collecting or deducting the monthly contributions from his employee’s compensation, fails to remit the said contributions to the Corporation within thirty (30) days from the date they become due shall be presumed to have misappropriated such contributions.”

Employers who fail or refuse to register their employees (including casual employees) under Philhealth are liable under this provision.  Also, employers who fail to deduct or remit the PhilHealth contributions of their employees are similarly liable.

Erring employers wrongfully presume that they are liable only for the amount of unremitted Philhealth contributions.  Such erroneous presumption is fatal in all respects.

It is therefore emphasized that a fine of not less than five thousand pesos (P5,000.00), to be multiplied by the number of employees, shall be imposed upon any employer who disregard their obligations under PhilHealth.  This is in addition to the amount of PhilHealth contribution arrears, plus the applicable legal interest from the time of default.

Do the math. For instance, a count of ten employees easily translates to P50,000.00 (P5,000 x 10 employees); plus the amount of unremitted PhilHealth contributions, plus legal interest thereof from the time of default.  And should the scenario ripen into a legal suit, the employer has to contend his math once more, considering the additional cost of expensive litigation.

That is not the end of it.

It is further emphasized that Section 44 points out three distinct violations, to wit:

• Failure to register employees under Philhealth
• Failure to deduct the PhilHealth contributions from employees
• Failure to remit such PhilHealth contributions

Every distinct violation warrants a separate fine penalty of P5,000.00 each – to be multiplied by the number of employees.  Hence, the fine penalty (after multiplying it by the number of employees) may double or triple, depending on the nature and count of an employer’s violations under RA 7875 as amended by RA 9241 and RA 10606.  And, of course yes, the additional expensive cost of litigation is a pain in the pocket.

This serves as a public service reminder – and a fair notice to all concerned employers.  Thus, “Ignorantia legis neminem non excusat” (ignorance of the law excuses no one).

(Ian Alfredo T. Magno is a Cagayan de Oro-based lawyer. E-mail: ianalfredom@gmail.com)