Handling the 1% PhilHealth contribution differential — easier said than done

With the end of the year approaching, employers and other direct contributors must take on additional responsibilities related to Philippine Health Insurance Corp. (PhilHealth) coverage. PhilHealth has issued guidelines for the 1% contribution differential for the January-May 2022. In compliance with PhilHealth Resolution No. 2713, s. 2022, the contribution differential may be remitted until Dec. 31.

PHILHEALTH CONTRIBUTION INCREASE

In 2019, the Universal Health Care (UHC) Act was signed into law with the objective of providing immediate eligibility for health benefits to every Filipino. Under the UHC Act, PhilHealth contributions are to increase yearly, starting in 2020, when they were due to rise 3%, followed by 3.5% in 2021, 4% in 2022, 4.5% in 2023, until the increases hit 5% in 2024-2025. However, the scheduled hike in contributions for 2021 was suspended on orders former President Rodrigo R. Duterte to ease the burden of PhilHealth members affected by the pandemic.

In May, PhilHealth announced through Advisory No. 2022-0010 that it will implement the scheduled 4% premium rate hike, retroactive to January 2022. All direct contributors are required to pay the retroactive adjustment of 1% contribution differential for those Statements of Premium Account (SPA) that were paid at the 3% rate until Dec. 31, 2022.

As the deadline set by PhilHealth for the payment of the 1% contribution differential draws closer, all employers are strongly encouraged to generate the SPA ahead of the deadline to avoid any inconvenience. Payment may be made through current online payment channels.

It is worth noting that a Senate bill was filed to grant the President the power to suspend the scheduled premium hike. However, the bill is still pending with the committees on health and demography, and finance.

PAYING THE 1% CONTRIBUTION DIFFERENTIAL

On Sept. 23, PHIC finally released Advisory No. 2022-0029 announcing the availability of the enhanced Electronic Payment and Reporting System (EPRS) and the guidelines on the generation of the SPA for the 1% contribution differential.  All employers who have paid their contributions at the 3% premium rate through the EPRS are advised of the following:

1. The corresponding SPA for the 1% contribution differential for the affected months will be automatically generated for all the paid periods within 2022 including those paid in advance.
2. The SPA is computed based on the total amount of premium paid and adjusted accordingly up to the P80,000 ceiling.
3. The SPAs will be editable, specifically for the personal share of the employee, to give the employer the liberty to exclude the personal share of employees who have resigned or been separated prior to the adjustment. With this, only the employer’s is to be included in the remittance of the contribution differential. This is only applicable in case the employer has not deducted the contribution differential prior to the resignation or separation of the employee.
4. For post-audit purposes, employers who have edited the auto-generated SPAs are required to generate the Premium Remittance List from the EPRS and have it signed by the person who prepared and certified the report. The signed copy should be submitted to the assigned account officer via e-mail or to the nearest PHIC local health insurance office.

Employers who have yet to pay the full amount of contributions for the affected months are advised to generate a new SPA with the 4% rate.

ENHANCED EPRS LIMITATIONS

One of the limitations of the enhanced EPRS is the inability of users to edit the monthly basic salary (MBS) reported for the months already paid (i.e., January to May 2022). As such, the 1% contribution differential will not be automatically calculated in case the employer has inputted the previous maximum ceiling of P60,000 instead of the actual MBS. For example, let’s take the case of an employee who has an MBS of P64,500 but the previous ceiling of P60,000 was the MBS inputted in EPRS. This will result in an incorrect computation of the 1% contribution differential since the calculation will be based on the P60,000 MBS instead of the actual MBS.

To address this limitation, PhilHealth issued EPRS Advisory No. 49 on Oct. 5 reminding all employers to declare the actual monthly basic salary of all their employees regardless of whether the amount exceeds the prescribed ceiling for the current year (as stated in PhilHealth Circular No. 2018-0001 Item III. D.). In cases where employers have not used the actual MBS for the months to be adjusted in consideration of the 1% contribution differential, they may seek assistance from their assigned PhilHealth account officer. While it is not expressly stated, I suspect that the account officer will assist to manually correct the salary information on PhilHealth’s end.

Another limitation of the enhanced EPRS is that the edit function can only be used once. Once the employee share of a separated employee is removed (i.e., edited to indicate “0”), this can no longer be undone. Hence, employers need to be careful when editing data prior to saving the edited SPA.

The agency must provide timely advisories to all its members. As we are less than three months away from 2023, the government should take immediate action and decide before year’s end whether the scheduled 0.5% increase in contributions next year will be implemented or deferred. By doing so, it will make it simpler for members to comply with any rate change and avoid complicated retroactive adjustments.