Aim

• To retain their key employees, the corporations must compete with similar firm in industry that provide fringe benefit packages
• To maintain low personnel mobility and attract staff of high caliber join in for the sake of productivity and competitive advantage
• To maximize tax benefits including,
  • the deductibility of such compensation as a business expense of the corporation
  • the receipt of such compensation income tax free by the employee
  • the deferral of taxation of the fringe benefit into a later tax year.

Nondiscrimination Rule
Employee Benefit Plans must be nondiscriminatory in eligibility for participation and/or benefit levels.

Covered Person
A group of participating employees excluding employee’s dependent, in general
Including rank-and-file employee or limited to high rank employee only

Participation
Employee in active service shall become eligible for benefits on the day following the completion of probationary period unless the probationary period is being waived on reasonable ground.

Termination
The insurance of any Insured employee shall cease on the earliest of the following date:

• On which the Insured employee enters full-time military, naval or air services;
• During which the Insured employee attains the age of 65 or 70;
• That the Insured employee ceases to provide active service.
• Policy Expiry

Policy Type & Covered Period
Package Plan or Tailor-made Plan on annual policy basis

Premium

• It is subject to claims experience, occupation class of risk and census in terms of age & sex distribution in corresponding to the benefit covered.
• The pro-rata premium is generally chargeable and refundable at the policy expiry due to the participation and termination of employee during the policy year.

Market

Overall, fringe benefits are rising faster than cash compensation in the workplace. High participation of insurance company creates very competitive market.  However, increasing high cost on administration / loss / roller coasting financial environment burdens both the corporation to budget and the insurance company to offer.