Download - DungPhuong Nguyen MMB Leader, Vietnam Sep 2020...About Vietnam 96.46 M Total population of Vietnam in 2019 71 : 79 Male : Female Life expectancy at birth (2018) 57.79 M Total labor

benefits that truly benefit

DungPhuong Nguyen

MMB Leader, Vietnam

Sep 2020

Copyright @ 2020 MMB (Vietnam). All rights reserved.

Table of contents

01 02 03

04 05

About Vietnam

Benefit Trend

Common Benefit

Coverage

Healthcare

Landscape

Key Highlights

on Renewal

Process

06Covid19 Latest

Update


DungPhuong NguyenMMB Leader

Mercer Marsh Benefits Vietnam

Current Role

Responsible for ensuring delivery of benefits broking and consulting services for employee benefits in

Vietnam. Her role is to ensure that MMB offer a professional level of care to the clients and the services

run smoothly, accountability and efficiently

Has extensive experience in developing new and innovative employee retention solutions, benefits

administration, underwriting and pricing

Develops & implements successfully employee engagement activities as well as health management and

wellness solutions

Experience

DungPhuong has over 10 years of insurance broking & consulting in employee benefits related products &

services. Before joining MMB Vietnam in 2015, DungPhuong performed several senior roles in business

development, business partnership engagement & played the role of senior client relationship officer in

insurance industry


About Vietnam


About Vietnam

96.46 MTotal population of Vietnam in 2019

71 : 79Male : Female

Life expectancy at birth (2018)

57.79 MTotal labor force (2020 est.)

$261.6 BnGross Domestic Product in 2019

7% growth

4% inflation

14% medical inflation

2.0%Unemployment rate, 2019

Second quarter 2020: 2.7%

$132 - $190Vietnam’s current minimum monthly wage varies depending

on region

1 USD = 23,000 VND

Copyright @ 2020 MMB (Vietnam). All rights reserved. Source: The World Bank 2020

Benefits Trends Around The World Mercer 2019

63Provinces & 5 municipalities - Hanoi,

Ho Chi Minh City, Can Tho, Danang & Haiphong


About VietnamIndustry development strategy to 2025

• Engineering and metallurgy

• Chemical

• Agriculture, forestry and

fisheries processing

• Garment and textile, footwear

• Software development

• Digital content

• Information technology

services

• Medical electronics

Electronics and

telecommunications

Processing and

manufacturing

industries

New energy and

renewable energy

• Wind

• Solar


Healthcare Landscape


Doctor per 1,000 population Nurse per 1,000 population Pharmaceutical personnel per

1,000 population

0.8 1.4 0.3

Healthcare LandscapeHealthcare Infrastructure

Health workforce per population


Healthcare LandscapeHealthcare Infrastructure

From 2018, public hospitals, mostly provincial and central level,

have been operating autonomously – they are no longer dependent

on the direct budget subsidy for their operating cost

Creation of new privately funded hospitals and clinics. This new

private healthcare infrastructure may position itself to service the

high-end segment of the healthcare market tapping into the

significant spending by local patients going abroad for operations

and other treatment that could be handled domestically

New opportunities in healthcare Healthcare Facilities

Public hospitals in Viet Nam are divided into 3 levels:

• central level (47 hospitals)

• provincial level (419 hospitals)

• district level (684 hospitals)

Vietnam also has 182 private hospitals, mostly located

in urban areas

Challenges for health system:

• public hospitals suffer from overcrowding or very

high occupancy rates

• limited integration with primary health care

• cost escalation

• weak regulation framework

• inadequate monitoring undermine hospitals


Healthcare LandscapeWhat causes the most deaths?

New opportunities in

healthcare


Source: IHME (Institute for Health Metrics and Evaluation)

COPD: Chronic Obstructive Pulmonary Disease


How much is spent on health -- now, and in the future -- and from which sources?


Statutory Benefits & Contributions

Company Contribution Employee Contribution

1 Social Insurance17.5% of monthly base salary that SI contribution based

on (*) effective July 1, 2017

8% of monthly base salary that SI contribution based on

(*) effective Jan 1,2014

2 Medical Insurance3% of monthly base salary that SI contribution based on

(*) effective Jan 1, 2014

1.5% of monthly base salary that SI contribution based on


3Unemployment

Insurance

3% of monthly base salary that UI contribution based on


1.5% of monthly base salary that UI contribution based on


(*) SI contribution payment is based on the gross base salary with a cap of 20 times of the common minimum wage which is VND 29,800,000 (effective July 1, 2019)

(**) Unemployment Insurance (UI) contribution is based on the minimum monthly salary to calculate contribution to UI is the minimum regional salary and the

maximum monthly salary to calculate the contribution to UI 20 times the minimum regional salary


Healthcare LandscapeDescription Government Health Insurance (GHI) Supplemental Health Insurance (SHI)

1 Eligibility

• Employees:

o apply for both Vietnamese and foreigner

o whose insurance are paid by the employers and employees,

employee having labor contract of fulltime 3 months and

longer term,

• Household members - dependents

• Not apply age limit

• Not apply any restriction of pre-existing condition

• Employees are eligible including Vietnamese and foreigner.

• Dependent:

o Direct dependent including children, spouse

o Indirect dependent: parents

• Age limit:

o Children: from 1 year old

o Adult: up to 65 years old & extend up to 70 (renewal

only) with loading premium

• Apply waiting period

• Not suffer from cancer, leprosy

• Not having more than 50% permanent disability

2Scope of

cover

• Main coverages: Inpatient incl Maternity (IP) and Outpatient (OP)

o Medical examination and treatment, rehabilitation, pregnancy

examination & childbirth

o Examination for screening, pre-diagnose early stage of diseases

o Treatment line transferred patients from ward-level hospitals to

higher levels such as emergency, in-patient treatment where high

technical quality is required.

o Drugs, chemicals, medical supplies, equipment and medical

technical services according to the list issued by the MOH

o Cover cost of congenital, critical illness, cancer

• Unlimited coverage amount

• Cover In & Out-patient medical expenses at all legal medical

providers, including state-owned, private & international

hospitals/ clinics

• Reimbursement up to limits/sub-limit as prior agreed policy for

all insured expenses.

• Cover for working and non-working related accidents that are

not excluded by policy

• Apply maximum annual limit of coverage

3 Exclusion• Not cover for working related accidents, occupational diseases

• Not cover for dental expenses, maternity, vision

• other common exclusions

• Not cover for congenital conditions

• Not cover for treatment arising during waiting period pre-existing

condition, chronical/critical illnesses & maternity

• Not cover for member already having cancer before joining date

• Exclusions as defined in the policy wording


Healthcare Landscape

Description Government Health Insurance (GHI)Supplemental Health Insurance

(SHI)

4 Claim procedure

• Direct billing: service need to be alerted before treatment

• Pay first claim back

• Treatment registered facilities classified by central/provincial-city/district level

o State-owned hospitals/clinics are 100% registered

o Private medical establishments having contracts with social insurance

agencies

• Reimbursement mechanism:

o Reimbursement scale: from 40% to 100% of government tariff

o Depending on type of treatment services, joining period, treatment at

registered/non-registered facilities

• Direct billing: present insurance card

and ID card to hospital/ clinic within

direct billing network before having

treatment

• Pay first claim back

5 Pricing/ Contribution

• Monthly contribution:

o Employee : 1.5% of contracted salary with cap of VND 29,800,000

o Employer : 3% of contracted salary with cap of VND 29,800,000

• Household package: premium of participants of voluntary health insurance is

calculated as follows:

o 1st person pays 4.5% of base salary (*) (VND 804,600/ year)

o 2nd person, 70% of the first person's premium (VND 563,220/ year)

o 3rd person, 60% of the first person’s premium (VND 482,760/ year)

o 4th person, 50% of the first person's premium (VND 402,300/ year)

o From 5th person, 40% of the first person's premium (VND 321,840/ year)

(*) Base salary : VND1,490,000

• All local children under 6 years old: free of charge

• Children above 6 years old & student: member can buy GHI voluntarily via their

school. The fee is VND 563,220/ year (equivalent 70% of adult fee)

Market pricing, Annual based


Common Benefits Coverage


Common Benefits Coverage Insurance Benefits

Group Term Life

Group Personal Accident

Retirement

Yes (*)

Yes (**)

Yes (***)

Yes

Yes

No (****)

(*) not apply for occupational diseases (**) not apply for labor accident (***)

contribution of 20 years to be eligible for retirement benefits (****) become a

trend

Government HI Supplemental HI


Common Benefits CoverageHealth Benefits

Outpatient Clinical

Hospital Surgical

Maternity

Dental Care

Vision Care

Medical Check - Up

Government HI Supplemental HI

Yes

Yes

Yes

No

No

No

Yes

Yes

Yes

Yes

Yes

Yes


98.8% 62% 95% 68%

Medical Life Accident Travel

Prevalence Inpatient Outpatient Dental Maternity Vision Check-up

Employee 92% 91%Included in

OutpatientIncluded in Inpatient

1% 95%

Dependent 65% 64% 1% 4.5%

Prevalence Inpatient Outpatient Dental Maternity Vision Check-up

Annual limit

Employee

Daily R&B:

VND4,200,000

VND84,000,000,

incl. surgical

VND2,800,000

VND11,500,000VND2,600,000 Included in Inpatient VND2,750,000 VND2,250,000

Annual limit

Dependent

Daily R&B:

VND4,000,000

VND75,000,000,

incl. surgical

VND2,650,000

VND10,500,000VND2,400,000 Included in Inpatient

Source: Benefits Survey 2020 - Mercer

Common Benefits CoveragePrevalence


• Minimum 5 employees

• Ready Made Package

• SME scheme (USD

2,500 for minimum fee)

• Minimum 50 employees

• Based on client’s

benefits plan & budget

Voluntary Solution

• Minimum 10 insured persons

• Premium quote on age band

• Pre-pack policy

Common Benefits Coverage


Key Highlights on Renewal Process


Key Highlights on Renewal Process

• Insurer will release renewal proposal 3 months prior to policy expiry

– We can push to 4 months for certain cases and/or certain insurer but likely premium is not competitive.

– Not advisable to push for earlier than that. Most insurer can’t and those who can usually will state it as indicative.

– We have some incidents where the real proposal and indicative differ by quite a margin

• Insurer rarely provide a policy period less than 1 year, especially for new policy and will incur short term premium with higher

risk calculation

– We can harmonize policies into 1 specific date

– To achieve policy date harmonization, recommendation is to implement policy period longer than 1 year to avoid higher risk

calculation

• Insurer requires at least 5 working days to prepare a quote / proposal for each alternative benefit design.

– January Renewal is the most hectic period of the year as most Policy Period starts on 1st Jan

– Due to heavy load, expect delay from insurer in providing quote, quote revision or additional alternative design

– To ensure cashless facility is up and running by 1st Jan, Insurer require confirmation & data census by around 15 to 20 December

latest

– Payment warranty is 30 days from effective date of the policy

1

2

3


Health Insurance Players

Top 5 Top 15 JapaneseInternationalInternational

67 INSURANCE ENTERPRISES

31 NON LIFE INSURERS

18 LIFE INSURERS

16 BROKERS

02 RE-INSURERS Copyright @ 2020 MMB (Vietnam). All rights reserved.

Pooling/Captive

Maxis/Insurope

Pooling

Swisslife


Benefit Trends


Cancer & Critical

Illness

- Additional protection for

critical illness and cancer

risks

Retention Schemes

- Life insurance

- Pension

Health & wellness

program

- Preventive care

- Diagnosis & treatment

- Recovery & rehabilitation

- Bespoke health &

wellness program

Top up/Voluntary

- Enhancement to regional

/ global area of cover

- Optimization of cost vs

HR policies

Flexi Benefits/Digital

solutions

- Employee experience &

personalization

- Improve communication

& employee engagement

Copay & Deductible

- Cost sharing between

employer and employee

- Awareness of

protection/risk vs benefits

24

Benefit Trends


PHYSICAL HEALTH (98%)

Poor physical health can impact ability

to work and carries costs to the

employer and the community

FINANCIAL HEALTH (90%)

EMOTIONAL HEALTH (92%)

Resilience in times of uncertainty can

impact health and productivity

SOCIAL HEALTH (60%)THRIVING

EMPLOYEE

Social equity, trust, a support

network contribute to strong and

healthy communities.

Financial stressors can impact emotional

and physical wellbeing

Medical plan, disease management programs, subsidy

for gym memberships, nutritional counselining, health

fairs, health coaching, available „healthy“ food, etc.

Coverage for inpatient/outpatient mental health services,

employee assistance programs (EAP), resiliency programs, yoga

or mindfulness apps, stress management tools, etc.

Pension, tax-preferred retirement plans, financial

education, financial advising services, education

allowances, daycare subsidy, etc.

Donation matching, time off for volunteering, flexible working

arrangement, sports/social/ affinity groups, gratitude practice,

corporate social responsibility programs, etc.


Making Holistic Wellbeing Plan


Covid19 Latest Update


Covid-19 CrisisVietnam updates as of 17 Sep 2020

Protocols to enter Vietnam for non-Viet nationals

Travelers currently allowed to enter Vietnam, including diplomatic,

official duty, experts, business men, foreign investors, and high-tech

workers of businesses involved in important projects as determined

by the Government of Vietnam, and their family members, are

subjected to mandatory 14-days quarantine upon arrival

1. A Fit to Fly Health Certificate which has been certified or issued

no more than 72 hours before traveling;

2. Proof of health insurance with medical coverage

Upon entry into Vietnam, they must also undergo public health

screening measures, and may be required to get a rapid test if deemed

necessary, prior to being quarantined in an alternative state

quarantine facility for 14 days and being tested negative twice, for

which the traveler will be entirely responsible for the expense.


Does your existing policy cover pandemic?

Not all insurers accept to cover for pandemic. At this moment, all medical expenses related to

Covid-19 will be paid by government but not for foreigners

My company’s coverage is a bit low. Any supplementary products for COVID-19?

No, following Decision from Prime Minister, no more Covid-10 standalone policy is allowed

to commercialize. You should consider high-end programs for better coverage for your

employee, especially expats & their family

Private hospitals now also treating COVID19 patients

There are private hospitals collaborated with the government to do testing only, all positive

cases have to centralized at public hospitals

Self-Isolation at Home? Telehealth guards you 24/7

- This pandemic could be ongoing for 12+ months. With situation developing rapidly in Asia, we

can’t be sure how long we can continue WFH.

- Either for stay at home for WFH or self-isolation, telehealth is useful.

- Insurer also will not cover for self-isolation cost and any state quarantine cost

- Telemedicine becomes one of insurer’s service features for the insured to get the treatment

“But will government pay all the

cost?”

“We implement WFH; our employees are safe. They are young, it is less likely they will be hospitalized”

“I do not know if my existing group

health insurance covers pandemic”

“I have group health

insurance policy in place”

Protective Equipment & Covid19 Test

- You will not pay for the cost of the tests if you follow instruction from CDC. Government

allows some hospitals to receive test but you will be charged Covid19 Test (Rapid & PCR)

- Insurer will not cover for Protective Equipment & Covid19 Test even you have a symptom


Do my employees well protected by current Benefit Scheme?


We will:

• Understand your needs and

help you set priorities

• Share market trends

• Help you articulate your

program objectives so that

decisions have a firm basis

• Ensure smooth transition of

broking and vendor

arrangements

We will help you:

• Assistance in the development of

appropriate underwriting data and

specifications for renewal

negotiations

• Preparation of marketing

submissions to insurers

• Evaluating and reporting on the

financial stability of insurers

• Ensure that all renewals meet the

timeline required

• Advice and assistance in the

placement of the insurance program

We will work with you to:

• Invoicing and payment of

premiums and duties to insurers

• Day to day management of

insurance program issues

• Provision of insurance manuals

including claims procedures

• Address administrative support

needs and ensure a favorable

employee experience

• Day to day management and

recording of above deductible

claims

Based on your benefit program

and our analytics, we will:

• Provide recommendations

around the adequacy of your

program and cost drivers

• Use creative, data-driven

benchmarking and modeling

tools.

• Work with you to revisit your

plan design and financing

approaches to ensure

alignment with your objectives

• Disclose Broker remuneration

STRATEGY &

PLANNING

COST MANAGEMENT

& DESIGN

VENDOR SELECTION

MANAGEMENT

ADMINISTRATION &

COMMUNICATION

Mercer Marsh BenefitsWe are here to help you


Appendix


Insured Benefits MarketHighlighted points on Regulatory Position

The main law governing private medical insurance is the Law on Insurance Business No 24/2000/QH-10 of 9 December 2000. Its

implementing regulations are contained in Decree No 73/2016/ND-CP.

Non-admitted life and health insurance is not permitted in Vietnam because the law provides that insurance must be purchased

from locally authorized insurers. It means that organizations and individuals wishing to purchase insurance shall choose insurance

enterprises" (insurers) but can only purchase insurance from insurance enterprises and foreign branches licensed to operate in

Vietnam.

There are no premium taxes applicable to life and health insurance in Vietnam

The Insurance Supervisory Authority Department (the regulator) of the Ministry of Finance (MOF) supervises the insurance market

including insurance and reinsurance companies, agents and brokers.

All Life & Health Insurance Products must be approved and registered by Ministry of Finance to be commercialized

The Ministry of Health (MOH) provides general supervision of the state and private healthcare system.



Insured Benefits MarketHighlighted points on Regulatory Position (Con’t)

From 1 January 2018 expatriate employees working in Vietnam (including employees working in Vietnam under work permits,

practicing licenses, or certificates issued by competent Vietnamese authorities) may pay social security contributions under Law No

58/2014/QH13.

Labor code No 10/2012/QH13 dated 18 June 2012 on labor accident and employers’ responsibilities for labor accidents and

occupational diseases of employees.

An employee who has a labor accident or suffers an occupational disease not due to his/her fault and loses 5% or more of

his/her working ability is entitled to compensation by his/her employer as follows:

o At least equal to one and half month’s wage stipulated in the labor contract in case of losing between 5% and 10%

of the working ability, then an additional 0.4 month’s wage stipulated in the labor contract for every increase of 1%

in case of losing between 11% and 80% of the working ability;

o At least equal to 30 months’ wage stipulated in the labor contract in case of losing 81% or more of the working

ability, or to family members of the employee who dies from a labor accident.

In case the employee is at fault, he/she is still entitled to an allowance at least equal to 40%

Law No 58/2015/QH13 on occupational accidents and disease, effective from 1 July 2016 represents a consolidation of previous

laws and regulations relative to occupational safety and hygiene. It applies to individuals not working under a labor contract as well

as to employees. It clarified and broadened the definitions of labor accidents to include:

accidents occurring during breaks and rest time at work

accidents occurring outside the workplace or outside working hours when on assignment by the employer

accidents occurring when travelling between the employee's residence and the workplace within a reasonable space of time

and on a reasonable route.
