After years of investigations into effective solutions of inadequate resources allocated to the public healthcare system, the Food and Health Bureau (“FHB”) finally rolled out the Voluntary Health Insurance Scheme (“VHIS”) in early April 2019.

Two great news about this newly launched scheme – first thing off, it is not mandatory, you have total freedom to make your own purchase decision. More importantly, a tax deduction of HKD$8,000 will be offered to each individual who is insured by qualifying insurance products under VHIS.

If you are interested in learning more about the entitled health insurance policy, here’s everything you need to know!

What is Voluntary Health Insurance Scheme (VHIS)?

The scheme comprises “Standard Plan” and “Flexi Plan”, Hong Kong residents aged from 15 days to 80 years old are all eligible to apply. As long as the policyholders are satisfied with the plans, it is guaranteed that they will be able to renew the insurance up to age 100.

As of 1st April 2020, 29 insurance companies have participated in the scheme and launched 230+ related products in total:

Certified Plan

Number

Standard

29

Flexi*

206

*Includes plans of different currencies and categories

As the first authorized virtual insurance company in Hong Kong, Bowtie brings you the most affordable and simple pure certified VHIS plans. With less than $200*, you can get yourself an annual limit up to HK$420,000, covering hospitalization expenses, surgery and doctor’s fees. Not to mention Bowtie might provide the successfully enrolled with BowtieCash^ which can be used to pay for medical costs that exceed coverage. Get your quote now!

*Monthly premium of Flexi Plan for non-smoking male aged 25 is $181.

^BowtieCash Rewards – can be used to cover any eligible medical expenses exceeding the benefit and coverage limit of Bowtie VHIS. Terms and conditions apply. Please refer to the Campaign Rules.

Source: Food and Health Bureau

Premium paid can be used for tax deduction?

True. According to the FHB, not only can the policyholders claim a tax deduction on qualifying premiums up to HK$8,000, they can also make deduction claims for more than one insured person without any limitation on the numbers of insured people or policies.

You may not be able to save a lot if you only enrol VHIS for yourself, but if you enrol for 5 other family members, it will be a different story. For instance, let’s assume you had purchased VHIS policies and paid qualifying premium for yourself, your spouse, your 2 adorable kids and your parents in the amounts of $6,000, $5,500, $3,000 and $18,000 respectively, you can save up to HK$4,575!

Annual Premiums Paid

Tax-deductible Amount (Capped at HK$8,000 per insured person)

Amount of Tax Saved (Assuming Tax Rate is 15%*)

Taxpayer

HK$6,000

HK$6,000

HK$900

Spouse

HK$5,500

HK$5,500

HK$825

Son

HK$1,500

HK$1,500

HK$225

Daughter

HK$1,500

HK$1,500

HK$225

Mother

HK$9,000

HK$8,000

HK$1,200

Father

HK$9,000

HK$8,000

HK$1,200

Total HK$32,500HK$30,500HK$4,575

*For the year of assessment 2019/20, the standard tax rate is 15% and the marginal tax rates are 2%, 6%, 10%, 14% and 17%.

Be reminded to keep the premium receipts or the annual premium statement issued by your VHIS Providers given that the Inland Revenue Department demands the taxpayer to provide supporting documents.

How to choose between “Standard Plan” and “Flexi Plan”?

As mentioned earlier, there are 2 types of certified plans, namely the Standard Plans and Flexi Plans. For the former, regardless of insurance companies, they all offer similar basic protections. While the latter are more diversified, since companies can flexibly design the products, higher benefit amount and more benefit items will be added so as to address different customers’ needs.

Thus, for those who solely focus on the insurance premiums, they might opt for Standard Plan. But if you wish to get a “just-fit” protection, Flexi Plan should be the one you are looking for.

Premiums varies by age, gender, tobacco use and health status

It’s a well-accepted fact that health insurance premiums vary between characteristics of each applicant, what might be shocking is just how significant these premium swings can be.

For a non-smoking insured aged 20, the differences in premiums (VHIS Standard Plan) charged by different VHIS providers could be very large:

GenderDifference between the highest and the lowest premiums (VHIS Standard Plan)
Male2.6 times
Female2.1 times

Still, Bowtie managed to stay competitive on premiums – Bowtie’s plans are generally 30% to 40% lower than those offered by the big players. Even with the wave of COVID-19, Bowtie did not raise the premiums at all. Instead, in response to this challenging situation in Hong Kong, Bowtie has decided to reward customers in the form of lower premiums.

Source: Food and Health Bureau

Read More: Coronavirus: Hong Kong insurers offer special payouts to patients hospitalised or quarantined

Is there any policy template for Standard Plan?

Although its product design is supposed to be fixed, VHIS providers are allowed to offer with minor variations. For example, some insurance companies provide:

  • Compassionate death benefit
  • Death benefit due to medical negligence
  • Total and permanent incapacity income benefit
  • Hospital income benefit
  • Accidental death benefit
  • Additional death allowance for organ donor
  • Day surgery cash allowance
  • Second claim incentive

Does Flexi Plan refer to more top-up protections?

Normally speaking, Flexi Plan offers services and benefits that exceed Standard Plan. So yes, Flexi Plans must provide basic protection equivalent to Standard Plan together with some top-up protection.

VHIS providers can raise the benefit limit of individual benefit items or enhance protection to additional benefit items.

Taking Bowtie “Flexi – Standard” as an example, coverage for prescribed diagnostic imaging tests and hospital room and board is increased:

VHIS Standard Maximum Benefits Limit
Benefit itemBowtie “Standard” Bowtie “Flexi- Standard”
Prescribed diagnostic imaging tests$20,000$26,000
Hospital room and board$750/day

Maximum 180 days/policy year

$880/day for unlimited number of days

Benefits coverage is also extended to emergency outpatient treatment, home nursing, rehabilitation, outpatient kidney dialysis, companion bed and $120,000 supplementary major medical (SMM) benefit:

Bowtie “Flexi – Standard”
Additional benefit coverageMaximum limit
Emergency outpatient treatment$8,000
Home nursing $500/day
Rehabilitation (e.g. chiropractic, speech therapy, physiotherapy) $750/day
Kidney dialysis$50,000
Companion bed$350/day for unlimited number of days
Supplementary major medical (SMM)$120,000

Source: Bowtie

How attractive are the certified VHIS plans?

From market data, and information from websites of “The Chin Family” and VHIS, non-VHIS medical insurance and VHIS are primarily different in the following 9 areas:

Non-VHISVHIS
Tax-deductible
Standardised terms and benefits
Unknown pre-existing conditions coverage?#
Cancer treatment coverage?#
Psychiatric inpatient treatments coverage?#
Prescribed diagnostic imaging coverage (eg CT, MRI, PET)?#
Treatment of congenital conditions coverage?#^
Cooling-off period?#
Lifetime benefit limit

# Necessarily varies among different insurance companies

^ VHIS covers treatment of congenital conditions manifested or diagnosed since the age of 8

Premiums of VHIS differ by over a double?

Consumer Council announced in January 2020 that there has been a substantial variation exceeding 70 times between the upper limits set for annual compensation claims, after evaluating 28 Flexi Plans. As for the 25-year-old male group, the lowest and highest premiums were respectively $1,689 and $3,006, showing a discrepancy of nearly a double!

Bowtie, the first virtual insurer in Hong Kong, also offers “VHIS – Standard” at very competitive rates in the market. For males and females aged 0 to 75, Bowtie VHIS Standard premium rates are the lowest among all providers^. You may wish to find out more and compare premiums of different VHIS plans offering by different providers on the official VHIS website published by Food and Health Bureau.

^Based on information from Food and Health Bureau website, as of April 1, 2020

What are the minimum requirements of VHIS?

Though the benefits of “Flexi Plans” offered by different insurance companies are very different, all “Standard Plan” and “Flexi Plan” have to meet the following minimum requirements:

Benefit coverageMaximum limit
Hospital ward and board$750/day

Up to 180 days/policy year

Attending doctor’s visit fee$750/day

Up to 180 days/policy year

Miscellaneous charges$14,000/policy year
Specialist’s fee$4,300/policy year
ICU$3,500/day

Up to 25 days/policy year

Surgeon’s fee$5,000 – $50,000
Anaesthetist’s fee / Operating theatre charges35% of surgeon’s fee payable
Prescribed diagnostic imaging tests$20,000/policy year

Subject to 30% coinsurance

Prescribed non-surgical cancer treatments$80,000/policy year
Psychiatric treatments$30,000/policy year
Pre- and post-confinement / day case procedure outpatient care$580/visit, up to $3,000/policy year

1 prior outpatient visit or emergency consultation/confinement or day-case procedure

3 follow-up outpatient visits/confinement or day-case procedure

(within 90 days after discharge from hospital or completion of day case procedure)

Source: VHIS Certified Policy Template

Remarks: Annual limit up to HK$420,000 without lifetime benefit limit

*Surgeon’s fee is the same as surgical procedure fee, which is classified into 4 categories: minor, intermediate major and complex. The claim limit for each category is $5,000, $12,500, $25,000 and $50,000 respectively.

**Tests only include computed tomography (“CT” scan), magnetic resonance imaging (“MRI” scan), positron emission tomography (“PET” scan), PET-CT combined and PET-MRI combined.

^Treatments only include radiotherapy, chemotherapy, targeted therapy, immunotherapy and hormonal therapy.

To let you have a better idea of the coverage, we selected 5 common surgeries covered by “Standard Plan” and below is the claim amount:

Surgery / ProcedureCategoryClaim Amount
Coronary artery bypass surgeryComplex$50,000
Anterior cruciate ligament reconstructionMajor$25,000
Breast tumour/ lump excision +/- biopsyIntermediate$12,500
Phacoemulsification and implant of intraocular lensIntermediate$12,500
Colonoscopy with polypectomy Minor$5,000

Source: VHIS Certified Policy Template

Migrate to or enrol for VHIS?

The government estimated that 1.5 million will join VHIS, with many of them switching from their existing policies. Before making a decision, we suggest everyone compare their existing policy with VHIS in different aspects, such as coverage, claim limit, premium and underwriting policy.

If you do not have any medical insurance, you can enrol VHIS via traditional insurance brokers or agents, as well as online such as Bowtie’s online platform, which enables everyone to buy VHIS themselves.

FAQ

Q: Does VHIS cover dental treatment and outpatient expenses?

Standard plan covers only the in-patient emergency dental treatments and surgeries. Some Flexi plans may provide benefits that cover other in-patient and out-patient dental treatment.

For out-patient treatment, Standard Plan covers the out-patient care of pre- and post-confinement or day-case procedure with limitation on the number of visits per policy year. Standard plan also covers 70% of the expenses of prescribed diagnostic imaging tests, such as CT, MRI, PET-CT and PET-MRI.

Q: Will my premium increase after I file a claim?

VHIS premiums will be adjusted every year according to the age of the policyholder. VHIS providers cannot adjust the premiums because of your previous claims, claim amount or health conditions.

Q: Will I be denied to renew my insurance after I file a claim?

Policyholders of VHIS are guaranteed to renew their insurance until 100 years old. VHIS providers cannot deny the renewal because of your previous claims or health conditions.

Q: The difference between VHIS and general medical insurance when filing a claim?

FHB does not regulate the claim process of VHIS, so VHIS providers can design their own claim process. In general, VHIS providers would ask policyholders to submit documents such as hospital receipt, hospital claim form and laboratory test report.

Q: I have group medical coverage already, do I still need VHIS?

Group medical plan usually provides basic coverage only, and you will lose protection once leaving the company. You can also read the terms and conditions of your policy to understand whether the coverage is enough. If you think the group medical plan does not provide enough protection, you may consider buying personal medical insurance to get more protection and VHIS is one of the options. To learn more about insufficient coverage of group medical plan.

To read more frequently asked questions about VHIS, its enrollment and claims!

In conclusion, the goal of launching VHIS is to provide one more option for Hong Kong people, so that we will use private hospital more and the burden on public hospitals will be eased. We will keep you updated on VHIS, so stay tuned!

The above information is for reference only. If you need any tax advice, please consult with your tax advisor. In no event shall Bowtie be liable to you or to any other party for any loss or damage whatsoever or howsoever caused directly or indirectly in connection with your access to or use of the content thereon.

 

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