Plantation firms rap medical insurance ruling

WEALTH PROTECTION

Oil palm and rubber plantation firms will now have to fork out another RM50 million to insurance companies

Oil palm and rubber plantation firms, which are already footing the medical bills of their foreign workers, will now have to fork out another RM50 million to insurance companies, following the Health Ministry's new ruling.

Effective January 1 this year, the Health Ministry requires all employers to pay for foreign workers' medical insurance.

In an interview with Business Times, the Malaysian Palm Oil Association (MPOA) chief executive Datuk Mamat Salleh said the new ruling makes its members pay a second time and "at a very high fee for what we have already been providing to foreign workers".

Mamat explained that under the Workers Minimum Housing Standard & Amenities Act 1990 (WMHSA), all estate owners are required to provide healthcare facilities and services for their staff including foreign workers.

"Many estates have already set up hospitals and clinics managed by health assistants and visiting medical officers. We're actually undertaking part of the government hospitals' responsibility of providing health facilities and services," he said.

Apart from estate owners, there is no specific law to mandate employers to pay for their foreign workers' medical bills. Currently, many foreigners, working outside the plantation sector, pay their own medical bills.

Mamat said MPOA had undertaken a survey on 200 member's estates, which employed 39,292 foreign workers.

In 2009, some 650 workers, or only 2 per cent of foreign workers in the estates, sought medical treatment in government hospitals, costing RM216,214.

The number of plantation workers seeking treatment in the government hospitals is actually very small because only serious cases are referred to the healthcare centres outside the estate.

Even then, Mamat said the estate had to provide a guarantee letter to the hospital, stating that it will pay for the foreign workers' medical bills.

"If our estate members were to participate in the medical insurance scheme, we'll be paying about RM50 million to insurance companies for the 400,000 foreign workers staying in the estates," he said.

"Since WMHSA Act 1990 requires the employers to pay for the medical bills of foreign workers, the method of payment should be left to the individual employers," Mamat added.

Separately, Malaysian Estate Owners Association (MEOA) president Boon Weng Siew concurred with Mamat that estate owners have always been responsible for their workers health under the WMHSA Act 1990.

"Injury-related accident cases are already covered by the Workmen Compensation Insurance, for which the employers are paying RM72 for each foreign worker. As such, this new ruling mandating us to pay another RM120 is grossly unjustified. We should not be burdened with additional costs," Boon said.

The government is mandating employers to provide medical insurance to address the problem of hospital charges owed by foreign workers.

Since plantation companies provide bank guarantee to hospitals prior to the admission of foreign workers as patients, Boon said the question of hospital charge arrears should not arise.

MEOA members are mid-sized plantation companies employing about 21,000 foreign workers. This brings the total annual cost of medical insurance to RM2.52 million.

"Currently, hospital charges incurred by MEOA members for treatment of their foreign workers by government hospitals are estimated at only about 5 per cent of the proposed medical insurance premium of RM2.52 million," he said.

Malayan Agricultural Producers Association (MAPA) director Mohamad Audong said the new ruling will mostly affect estates owned by government-linked companies like Sime Darby Plantations, Felda Plantations, Tabung Haji Plantations and state agencies such as Johor Corp.

"Private estates like United Plantations, Boustead Estates, Taiko Plantations will also be affected," he said.

Mohamad estimates the extra medical insurance cost by MAPA members to be around RM30 million for plantations and RM20 million for small farmers.

"This brings the total to RM50 million per year and causes food production to be more costly," he said.