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Jul 2020

Cambodia: Higher social security contributions could threaten private health insurance

Source: Asia Insurance Review | Feb 2018

Cambodia Life & Health Regulation

A new government policy that went into effect at the start of the year could prevent some businesses from providing private health insurance plans for employees.
   The new rule, effective as of 1 January, requires employers to pay more into their employees’ government-managed social security funds. Under it, all businesses hiring one or more employees are now required to pay 3.4% of each employee’s average salary each month – up to a maximum of about US$8.50 – into the National Social Security Fund (NSSF). The money is intended to provide employees with injury insurance and healthcare, reported The Pnom Penh Post.
   In the past, employers were required to pay only 1.3% of a worker’s average monthly salary into the NSSF, with employees paying another 1.3%. With the new change, a factory owner paying his employees minimum wage would have to pay about $70 per employee each year into the NSSF, compared to $26 per employee under the previous rules.
   Mr Stephen Higgins, Managing Partner of Mekong Strategic Partners, said: “Most medium to large employers provide health coverage to their staff already, which allows those staff to access private clinics and hospitals.
   “There is a risk that some of these employers will cease their existing private coverage and go just with the NSSF, rather than paying for two different sets of health care policies, which would likely result in their staff being worse off.”
   If those firms were to drop private health insurance plans, the Kingdom’s private health insurance industry, as well as the workers themselves, could suffer, according to Mr Anthony Galliano, CEO of Cambodian Investment Management.
   “We have already seen an evolving trend whereby some employers who provided their employees personal accident insurance have declined to renew the coverage, citing the cost of monthly NSSF contributions,” he said. A 
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