Changing jobs or retiring? How employee top up medical insurance can bridge gaps in company medical cover

Many employees assume that having company medical insurance is enough. However, what really matters is not simply whether you are covered, but whether your company medical insurance will provide sufficient protection in the event of major surgery, a period between jobs or retirement.

Company medical insurance is generally tied to your employment. The scope of benefits, room type, benefit sub-limits and effective date are also determined by the plan selected by your employer. If your medical expenses exceed the applicable benefit limits, or your employee benefits end when you leave the company, you may need to pay the uncovered medical expenses yourself.

Company medical insurance top up cover can provide a second layer of personal medical protection on top of your existing group medical insurance. While you are covered by company medical insurance, eligible medical expenses can first be claimed under the group plan. After reimbursement from your company medical insurance, the outstanding eligible expenses may then be considered under the employee top up plan, subject to its deductible, reimbursement percentage, room type and annual benefit limit.

When you change jobs or retire, your individually held top up cover may also continue in accordance with the policy terms. However, this does not mean that all medical expenses will be fully covered with no out-of-pocket payments required, nor does it mean that all pre-existing conditions will be covered immediately.

You may consider top up medical insurance if you feel that the benefit limits or scope of your existing company medical insurance is not sufficient to meet your medical expenses in full.

It may also be worth considering if you currently rely mainly on medical benefits provided by your employer and are concerned that your protection could be affected when you change jobs, retire or leave employment. As you get older, your health needs can change, while medical inflation may also lead to higher healthcare expenses over time.

Top up medical insurance supplements your existing medical protection and can help reduce the amount you need to pay yourself when medical expenses exceed your original benefit limits, giving you more comprehensive protection when you need it.

In general, the scope of cover and reimbursement limits under company medical insurance are determined by the employer and may not fully match an individual employee’s actual healthcare needs.

For more complex treatments, inpatient surgery or private hospital services, medical expenses may exceed the limits provided by company medical insurance. The employee would then need to bear the shortfall.

Company medical insurance is also usually linked to your employment status. If you change jobs, leave employment, retire or are not yet eligible for medical benefits during your probationary period, your company medical cover may be suspended or terminated. As a result, it may not provide continuous, long-term medical protection.

1. Your annual benefit limit may look sufficient, but sub-limits can be exhausted first

Company medical insurance plans commonly cover outpatient services, hospitalisation and surgery, but individual benefit items may be subject to separate limits.

For example, room and board, surgeon’s fees, anaesthetist’s fees, operating theatre charges, diagnostic imaging and hospital miscellaneous expenses may each have their own limits. Even if the overall annual benefit limit has not been exhausted, you may still face out-of-pocket expenses when a particular sub-limit is exceeded.

Staying in a room category above your entitled benefit level may also result in proportional reimbursement or other restrictions.

2. Major medical bills can exceed company medical insurance limits

Illustrative example: Assume Peter joined a new company at age 30 and his employer enrolled him in MSIG Group Medical Insurance. Within 30 days of joining the company, he enrolled in Plan 4 of MSIG Employee Top Up Medical Insurance.

Two years later, Peter became ill and was admitted to a semi-private room at a private hospital on the designated hospital list in Hong Kong, where he underwent surgery. His eligible medical expenses totalled HK$400,000.

In this example, the eligible hospitalisation and surgical expenses amounted to HK$400,000, while the company group medical insurance reimbursed only HK$300,000, leaving a HK$100,000 protection gap.

Plan 4 of the Employee Top Up Medical Insurance in this example has an annual deductible of HK$100,000, a 90% reimbursement rate and an annual benefit limit of HK$300,000.

The actual reimbursement is determined by comparing:
•    The reimbursable amount after applying the deductible and reimbursement percentage; and
•    The remaining eligible expenses after reimbursement from other insurance.

The lower of the two amounts will apply. In this example, MSIG Employee Top Up Medical Insurance can reimburse the remaining HK$100,000.

Simply put, medical insurance top up cover is designed to help with eligible medical expenses when company medical insurance is insufficient. The actual reimbursement amount, however, remains subject to the terms and conditions of both policies and final claims assessment.

3. Changing jobs, being between jobs or serving a probationary period can create a coverage gap

Group medical insurance provided by your previous employer will generally end when you leave the company. Meanwhile, your new employer’s medical benefits might not take effect immediately.

If you take a break between jobs, become self-employed or need to complete a probationary period before becoming eligible for your new employer’s medical benefits, you could face a coverage gap lasting from several weeks to several months.

If you wait until after leaving your job to look for individual medical insurance, factors such as your health condition, age at application and application deadlines may affect the protection available to you.

If you wish to maintain continuous medical protection, taking out suitable individual medical insurance before leaving your job can help avoid a break in cover and reduce the potential impact of changes in your health condition during underwriting. You may therefore consider applying for MSIG Employee Top Up Medical Insurance before leaving your employment to help maintain continuous protection.

According to the current product information for MSIG Employee Top Up Medical Insurance, employees leaving their employment must enrol within 30 days before their MSIG Group Medical Insurance ends. The cover may then continue after leaving employment, changing jobs or retiring.

If you wish to maintain continuous cover, you should check with both your HR department and insurer as early as possible after giving notice, or confirming your retirement date, to establish the termination date of your existing cover and the relevant application procedures.

4. Company medical benefits end after retirement, while healthcare needs may increase

Company medical benefits may end when you retire. At the same time, as you grow older, healthcare needs such as hospitalisation, surgery, cancer treatment and kidney dialysis may increase. Medical inflation and advances in medical technology can also contribute to rising healthcare costs.

Applying for new individual medical insurance at an older age may also mean higher premiums or a greater risk of an application being declined. Having individual medical protection that can continue to be renewed could reduce your reliance on company medical insurance.
The current MSIG Employee Top Up Medical Insurance plan provides guaranteed lifetime renewal. However, premiums are not guaranteed to remain unchanged and may be adjusted in the future based on factors such as age, overall claims experience, medical inflation and product revisions.

When planning for retirement, you should consider not only whether your protection is sufficient, but also the long-term affordability of your premiums and your ability to continue paying them.

In general, the claims process can be understood as “company cover first, individual top up cover second”:

• First, submit the eligible medical expenses to your company medical insurance and obtain the claims settlement statement.
• Keep verified copies of receipts, medical reports, diagnoses, surgical information and proof of reimbursement from your company medical insurance.
• Submit the remaining eligible expenses that have not been reimbursed to your employee top up medical insurance provider. The benefit will be calculated according to the annual deductible, reimbursement percentage, reasonable and customary charges, room type, hospital classification, benefit limits and other applicable policy terms.
• Expenses relating to exclusions, amounts exceeding benefit limits, co-insurance or expenses that do not meet the definition of medically necessary treatment may still need to be borne by the insured person.

MSIG Employee Top Up Medical Insurance currently offers six levels of hospitalisation and surgical cover. The maximum annual benefit is:

• HK$150,000 for ward room plans.
• HK$300,000 for semi-private room plans.
• HK$600,000 for standard private room plans.

Plans 1, 3 and 5 have no annual deductible, while Plans 2, 4 and 6 have annual deductibles of HK$50,000, HK$100,000 and HK$200,000, respectively.

Reimbursement rates range from 70% to 100%, depending on the hospital category. Additional benefits for cancer treatment and kidney dialysis are also available, together with optional outpatient cover.

Actual benefits, reimbursement percentages, limits and deductibles are subject to the latest policy terms and conditions applicable at the time of application.

When choosing company medical insurance top up cover, avoid looking only at the “maximum benefit limit”. Start by understanding your existing company medical insurance, then consider the following:

• Identify your existing protection gap: Review your company medical plan’s annual hospitalisation limit, per-disability or individual benefit sub-limits, room type, reimbursement percentage and exclusions to identify expenses you may need to pay yourself.
• Match the deductible with your existing cover: The closer the reimbursement from your company medical insurance is to the deductible under your employee top up plan, the more effectively the two layers of protection may work together. However, you should still maintain sufficient cash reserves in case your company medical insurance provides insufficient or no reimbursement, or when you no longer have first-layer company cover after leaving employment.
• Choose according to your preferred room type: If you prefer a semi-private room, avoid choosing ward room cover purely because the premium is lower. Staying in a room category above your benefit entitlement may increase your out-of-pocket expenses.
• Check hospital classifications: Reimbursement rates may differ among public hospitals, hospitals in mainland China, designated private hospitals in Hong Kong, other private hospitals and overseas hospitals. Make sure you understand the applicable arrangements before taking out a policy.
• Factor retirement premiums into your budget: In addition to comparing current premiums, consider your ability to maintain premium payments when you are in your 50s, 60s and beyond.
• Understand the difference between inpatient and outpatient cover: Top-up insurance generally focuses on major hospitalisation and surgical expenses. If you also need outpatient benefits for general practitioners, specialists, physiotherapy, Chinese medicine practitioners, psychiatric treatment or prescription medication, review the limits, number of visits and reimbursement percentage under any optional outpatient cover.

Yes, but it is important to understand the applicable conditions.

Existing MSIG Group Medical Insurance members who apply for MSIG Employee Top Up Medical Insurance before age 65 are not required to complete a medical questionnaire or undergo medical underwriting. Eligible pre-existing conditions may be covered once the insured person has been continuously covered under MSIG Group Medical Insurance and/or MSIG Employee Top Up Medical Insurance for a combined period of 12 months, subject to the policy terms and conditions.

However, this does not mean that all pre-existing conditions are covered from the first day of the policy.

If a condition was already excluded under the original group medical policy, the same exclusion will continue to apply under the MSIG Employee Top Up Medical Insurance policy. For applicants who are not members of MSIG Group Medical Insurance at the time of application, such as a spouse or child, pre-existing conditions are also not covered during the policy period.

In addition, certain specified conditions or procedures, including cataracts, joint replacements and certain endoscopic procedures, are subject to a six-month waiting period.

You should obtain written confirmation before taking out the policy and refer to the English policy terms and conditions and underwriting decision for the applicable coverage.

• Ask HR for an overview of your company medical benefits, the coverage termination date and your recent claims records.
• Check the application deadline, eligible entry age, effective date and renewal arrangements of the employee top up medical insurance.
• List any chronic illnesses, follow-up consultations, medication and planned surgery, and check how pre-existing conditions and waiting periods will apply.
• Compare room types, annual limits, deductibles, reimbursement rates, hospital lists and outpatient needs.
• Maintain sufficient cash reserves to cover deductibles and coinsurance during periods when you do not have company medical insurance.
• Keep your company medical insurance claims settlement statements, verified copies of receipts and medical documents for your subsequent top-up claim.

Company medical insurance can help address your basic healthcare needs while you are employed, while top up insurance is designed to help bridge gaps caused by insufficient benefit limits and changes at different stages of life.

The most suitable company medical insurance top up plan is not necessarily the one with the highest benefit limit. Instead, it should complement your existing company cover while taking into account your ability to bear out-of-pocket expenses, preferred room type and retirement budget.

Planning ahead while you are still eligible for simplified enrolment can help reduce the risk of an unexpected break in medical protection when changing jobs, being between jobs or retiring, and provide additional financial protection against unexpected hospitalisation during a coverage gap.

1. What is a company medical insurance plan?

   A company medical insurance plan is generally a group medical benefit arranged by an employer for its employees. It may include hospitalisation, surgical and outpatient benefits.

   The level of cover, reimbursement limits and exclusions depend on the plan selected by the employer. When an employee leaves the company, the coverage generally does not continue automatically.

2. Is company medical insurance top up cover the same as having a second company insurance plan?

   No. The company medical insurance top up cover referred to in this article is individually held supplementary medical protection designed to complement company medical insurance.

   Eligible medical expenses are assessed according to the top up policy’s own deductible, reimbursement percentage and benefit limits. The benefit limits of the two policies are not simply added together, and the employee is responsible for paying the premium for the top-up insurance.

3. Can MSIG Employee Top Up Medical Insurance continue after I change jobs?

   Yes. Employees may apply for MSIG Employee Top Up Medical Insurance before leaving their company, changing jobs or retiring to continue their medical protection.

   Employees leaving their employment must enrol within 30 days before their MSIG Group Medical Insurance ends. The actual effective date and eligibility requirements should be confirmed with MSIG.

4. If I no longer have company medical insurance after retirement, do I need to pay the deductible myself?

   Possibly. If you no longer have company medical insurance providing the first layer of reimbursement, you may need to bear the applicable deductible, co-insurance and non-covered expenses yourself.

   When choosing a deductible, you should therefore consider not only how much your company medical insurance can reimburse while you are employed, but also your own cash flow and affordability after retirement.

5. Are pre-existing conditions covered immediately after taking out the policy?

   Not necessarily. It depends on the circumstances. For existing MSIG Group Medical Insurance members, eligible pre-existing conditions may be covered after a combined 12 months of continuous coverage under MSIG Group Medical Insurance and/or MSIG Employee Top Up Medical Insurance, subject to the policy terms and conditions.

   Existing exclusions will continue to apply, and certain specified conditions or procedures are also subject to waiting periods.

6. What should I consider when choosing medical insurance top up cover?

   Consider your company medical insurance’s actual reimbursement, the top-up plan’s deductible, room type, annual benefit limit, reimbursement rates for different hospital categories, reasonable and customary charges, treatment of pre-existing conditions, renewal arrangements and outpatient needs.

   Do not compare plans based solely on premiums or the maximum benefit limit.