HMO for a small business in the Philippines

Yes, a small company can buy group HMO cover for its staff. Each HMO sets its own minimum number of members for a company plan and its own plan tiers, so there is no single rule. Start with two numbers before you ask anyone: how many people you want to cover, and whether that includes their dependants.

How small-company HMO plans are usually built

• Priced per head. A company plan is usually priced for each covered member, so the total grows with your headcount.
• Tiers by role. Many plans let you give different benefit limits or room types to different levels, for example staff and managers. The same tier should apply to everyone in the same level.
• Who must be enrolled. Some HMOs ask that all regular employees be enrolled, not only those who want it, so the group is not made up only of people expecting to claim. Ask what the rule is.
• Dependants. Spouses and children can often be added. The plan sets who counts as a dependant and the age limits, and whether the company or the employee pays for them, often through salary deduction.
• The contract term. Company plans usually run for a year and are renewed. Renewal terms can change with the group’s claims.

What to check before you sign

• The network. Which network hospitals and clinics are near where your staff live and work.
• The maximum benefit limit. How much the plan pays a year, and whether it is per illness or for the year.
• The room type. Which hospital room the plan pays for, and what happens if an employee takes a better one.
• Pre-existing conditions. How they are treated. For HMOs, the Insurance Commission limits the look-back to two years and the waiting period for a pre-existing condition to one year (IC Circular Letter 2018-66). Some company plans cover them from the start; ask.
• Waiting periods for other benefits, such as maternity care.
• Outpatient care and the annual physical exam: what is included and how often.
• Exclusions and limitations. When an HMO sells online it must show these, and the right to cancel, before purchase (IC Circular Letter 2021-10). Ask for the same in writing whichever way you buy.

Check that the HMO holds a certificate of authority from the Insurance Commission. HMOs have been regulated by the IC since 2015 (Executive Order 192), and the IC publishes the list of HMOs with certificates of authority.

What drives the cost

Without quoting prices, these are what move the cost of a company plan:

• Headcount. More members spread the HMO’s risk.
• The age mix. Older members cost more to cover.
• The benefit limit. A higher limit costs more.
• The room type. A private room costs more than a ward or semi-private room.
• Dependants. Each dependant added is another member.
• Extras such as dental, a wider outpatient benefit or cover for pre-existing conditions from day one.

Tax. The cost of premiums an employer pays for the group insurance of its employees is left out of fringe benefit tax (BIR Revenue Regulations 3-98, Sec. 2.33(B)(10)). That does not by itself settle income tax: a benefit exempt from fringe benefit tax may still form part of the employee’s taxable pay (RR 3-98, Sec. 2.33(C)). BIR’s 2018 answer on group health card premiums was deleted (RMC 96-2018), and BIR has not published a replacement in the regulations listed here. Ask your accountant how to report them.

One or two people

For a business with only one or two people, such as an owner and one employee, a company plan may not be available, because HMOs set minimum group sizes. Individual or family plans, bought by each person, can fit better. See HMOs in the Philippines for how to compare plans.

Related guides

Employee benefits in the Philippines: what the law requires and what employers add.

Mandatory employee benefits: the benefits every employer must give.

This page explains how company HMO plans generally work. It does not describe any company’s plan.