Hong Kong: Insurers want more tax incentives for voluntary health insurance scheme
Source: Asia Insurance Review | Feb 2017
Hong Kong insurers are calling for more attractive tax exemptions for the territory’s Voluntary Health Insurance Scheme (VHIS).
Ms Elaine Chan, deputy chairwoman of the healthcare reform taskforce of the Hong Kong Federation of Insurers, said that criteria which the government requires insurers to meet under the scheme would “bring peace of mind” to policyholders.
“But this peace of mind isn’t enough. There must be an additional reason and that is a tax incentive … these tax exemptions can be implemented to attract more buyers,” she said over a radio programme.
A consultation document on the VHIS issued by the government in 2014 proposed a tax deduction for premiums paid for all individual hospital insurance policies that meet or exceed the scheme’s criteria. There would be a HK$3,600 (US$465) annual ceiling on claimable premiums; a person could claim a tax deduction on his/her own policy and/or dependents’ policies; and the claims for tax deductions for dependents’ policies would be capped at no more than three dependents per taxpayer.
The government conducted a public consultation on the VHIS from 15 December 2014 to 16 April 2015. Many submissions received in the consultation exercise said that the tax concession should be enhanced to attract more young and healthy people to enrol in the VHIS, for example, by setting a higher annual ceiling on claimable premiums, or relaxing the cap on the number of dependents’ policies.
The government aims to finalise details of the tax deduction arrangement in 2018.
The proposed VHIS is aimed at encouraging Hong Kong residents to use private-sector medical services so as to relieve the burden on public hospitals.