Scrap MC culture, reap more benefits

Jeff Ang, Head of Enterprise Business Solutions, Prudential Singapore, shares about our honour leave system and how companies can reap benefits from this.

Imagine waking up with a headache. You'll usually feel better with rest, hydration and off-the-shelf medication.

But most employees in Singapore would need to leave the house. They would need to go to a clinic, wait in line, and see a doctor — all to get a medical certificate (MC) to account for them resting at home.

These MCs are usually approved by line managers and processed by the HR department. Co-payment is often involved, with employees paying $5 or $10 for each visit. Insurance companies like Prudential settle the rest. This comes in the form of group insurance that companies are required to pay premiums for.

However, depending on the amount of claims a company racks up in the previous year — as a result of more employees going to the doctor, premiums for this insurance might rise, increasing a company’s expenses in the long term.

Is this really an efficient use of company expenses, and the type of culture that we want to cultivate in our employees?

At Prudential, we’re trying to turn this MC culture on its head. Since January 2017, we have put in place a system of honour leave. Our employees aren't required to submit MCs; instead, when they’re feeling under the weather, they can apply for as many as 14 days of paid outpatient sick leave. Have your doubts?

Here's what we have discovered.

Honour leave is not a runaway train

Honour leave is an admirable concept. Still, many employers fear the system is open to abuse, and this is not unfounded.

I personally believe that there is room for some regulation. At Prudential, we operate on trust, which means we don't question if an employee is really sick or not. Instead, we monitor overall doctor visits, which are tracked in real time, on a quarterly basis.

Our HR department uses this data to validate any concerns that they may have. On the whole, we found that employees were not taking any more medical leave than before.

Savings and benefits are immense on all ends

The overall feedback from employees is that they love the honour leave system. They feel that it encourages them to see a doctor when they need to, not because they have to. They also avoid the hassle of seeing a doctor, especially if their symptoms can be self-medicated. Additionally, they get out of footing the co-payment bill.

For the employers, there are several savings. Consultation at a clinic costs $45 on the average. That can add up to a lot — depending on the size of your company. Further, you’d be able to significantly save on the time it takes to process MCs. For Prudential, honour leave has already resulted in savings.

Ultimately, if the amount of claims fall, as we have observed, this would translate to lower insurance premiums for a company. The money saved can then be channelled to other initiatives, such as other benefits or to improve the working environment for your employees.

It's not a one-size-fits-all solution

The honour leave system probably works better in certain business sectors, where work is not shift-based. Above all, HR departments have to take into consideration what works best for them.

Companies that are unsure can start with baby steps, for example, by implementing an honour code for a small portion — say two days — of paid medical leave, and observe the results from there.

A shot to make it all better

The truth is, rising insurance premiums are a pain point for companies. Medical inflation alone rose at an average of 9.7 per cent globally in 2018. With excessive consumption of medical leave by employees, HR departments may need to ask for a bigger budget for these premiums.

At Prudential, we strive to help our clients achieve a better working environment and culture for their employees to the best of our ability, and where possible, we give them suggestions on the steps they can take towards lowering their premiums.

For instance, we’ve noticed that 40 per cent of general practitioner claims are due to upper respiratory tract infections, like the common cold. This would be reduced significantly with a simple flu vaccination. Even though some companies offer vaccination packages, a mere six per cent of their employees take this up voluntarily.

To help drive vaccinations to higher levels, there are potential opportunities to help set up vaccination stops at our clients’ workplace, so they can boost vaccination rates among their employees by bringing the service to their doorstep.

This way, companies can reduce the quantity of doctor visits. Not only would this translate into immediate cost savings, but happy and healthier employees would be even easier to retain over the long term.

Every step towards eradicating an MC culture will count, so why not try looking at enterprise benefits options for your company?


The information in this article does not necessarily reflect the views of Prudential Assurance Company Singapore Pte. Ltd. Certain information in this article may be taken from external sources, which we consider reliable. We do not represent that this information is accurate or complete and should not be relied upon as such.

This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Singapore Financial Consultant before making a commitment to purchase a policy.