A few years ago, one of my SME clients — a small, growing team of just five employees — decided to skip Group Hospitalisation and Surgical Insurance (GHS).
Instead, they gave everyone an $800 medical allowance a year.
At that time, it made sense to them:
✅ It looked cheaper
✅ It kept things simple
✅ Employees were happy enough
As their insurance advisor, I flagged the risks — but they decided to take their chances.
Then, reality hit.
One morning, their accounts executive, Jia Hui (a Malaysian), had to be rushed to the hospital.
Appendicitis. Emergency surgery.
The hospital bill?
$27,000.
(By the way, Jia Hui was a Malaysian on a Work Permit, and yes, the company did have the mandatory Foreign Worker Medical Insurance (FWMI). But FWMI only covers up to a basic limit, and with hospital bills like hers, the coverage wasn’t enough to fully protect her. That’s when the company realised — having just the minimum FWMI wasn’t enough. They needed proper Group Hospital Insurance to really safeguard their people — and their business.)
And their $800 allowance?
Wiped out after the first consultation.
They scrambled. They panicked.
And in the end, the company stepped in to pay Jia Hui about $20,000 out of goodwill — because how could they not?
That one hospitalisation wiped out three months’ worth of profits for the company.
What Changed After That
After that incident, they didn’t need convincing anymore.
They bought a Group Hospitalisation and Surgical (GHS) plan for all their staff immediately.
They realised a few painful truths:
- Medical bills are unpredictable. Even “small” cases cost tens of thousands.
- Employee loyalty matters. Good staff don’t forget how they were treated when times get tough.
- Company survival matters too. One unexpected bill shouldn’t threaten the whole business.
- Premiums are manageable. A basic GHS plan could cost less than $1 per employee per day.
In hindsight, the annual premiums were peanuts compared to the $20,000 they had to fork out from their own pockets.
Why I’m Sharing This
Today, many companies — especially SMEs — still think medical allowances are “good enough.”
Until something serious happens.
GHS isn’t just a “nice to have.”
It’s a financial safety net — for your employees and your company’s cash flow.
Because when emergencies strike,
it’s not just the employees who need protection — it’s the business too.
If you’re thinking about whether to buy Group Hospital Insurance for your team,
my advice?
Don’t wait for a $30,000 lesson to find out. Contact us here
✅ Here’s why companies still buy GHS even for Malaysians or foreigners:
| Point | Explanation |
|---|---|
| 1. FWMI payout may not cover full bill | $60,000 is the minimum mandated coverage, but not “as charged” coverage. Private hospitals (e.g., Mount Elizabeth, Gleneagles) can easily cost $30,000–$50,000 for surgery. Plus, FWMI policies often have sublimits (e.g., $X per surgery type). |
| 2. FWMI claims are for Work Permit/S Pass holders only | What about Singaporean or PR staff? Or EP holders? They have no FWMI protection at all. |
| 3. FWMI is strictly for inpatient only, no outpatient | If the employee also needed pre/post-surgery consults, outpatient treatments, or day surgery without admission, FWMI may not cover them. |
| 4. GHS is broader and easier to claim | Group Hospitalisation and Surgical Insurance (GHS) plans often cover all staff, with more flexibility: day surgery, room/board limits, panel hospitals, even rider add-ons like outpatient specialist coverage. |
| 5. FWMI is typically reimbursement-based | Some FWMI policies require the employee or company to pay first and then claim back, causing cashflow issues. GHS often allows direct billing arrangements with hospitals. |
| 6. HR wants a consistent benefits package | It’s very messy to say: “If you’re Singaporean you have no coverage, if you’re Malaysian you have FWMI, but only for inpatient…” A single GHS plan standardises benefits across all employees. |
| 7. Employer Branding and Fairness | Companies serious about retention and welfare offer consistent coverage. If only foreigners have basic hospital coverage and locals don’t, it looks unfair and can hurt morale. |
| 8. Legal Risk and Employee Claims | If the FWMI terms or claim gets rejected, and there’s no GHS, employees may feel the company neglected their duty of care. Especially if the worker believes they were not properly briefed about limits. |