General insurers’ proposals for gig workers not viable or cost-effective: Koh Poh Koon

TWEAKING existing insurance products to cover gig workers could result in higher costs for the platform companies that hire them, compared to an employee-like insurance coverage recommended by a government-led advisory committee, said Senior Minister of State for Manpower Koh Poh Koon on Tuesday (Nov 29).

The Advisory Committee on Platform Workers last Wednesday proposed that platform companies be required to insure ride-hailing and on-demand delivery workers to the same level that employees are covered under the Work Injury Compensation Act (Wica) – a recommendation that the government has accepted.

The following day, however, the General Insurance Association (GIA) raised concerns over this, suggesting instead that workers be protected through existing solutions, such as MediShield Life, prolonged medical leave insurance and group personal accident insurance.

Responding to questions in Parliament on Tuesday, Dr Koh, who is also adviser to the committee, said Wica offers a legal framework with an established mechanism under which companies and workers who object to the insurers’ assessment of a claim can file a dispute.

The Ministry of Manpower would then oversee the dispute resolution process to adjudicate and settle the claim.

This ensures that claims are resolved fairly in accordance with a legal framework without prejudice to the company or the worker, said Dr Koh.

“GIA’s suggestion of using only existing prolonged medical leave insurance or group personal accident insurance in place of Wica would relegate this to a private insurance policy whose terms and conditions are dictated by the insurer, without a clear mechanism to adjudicate disputes,” he said.

“I appreciate why insurers would want more flexibility in how they compensate claims but to ensure fairness to workers and companies, I do not think we should be leaving it to insurers to be the final arbiter of any disputes to work injury claims,” he added, citing possible conflicts of interest.

Dr Koh said the committee also engaged platform workers, who described having to “jump through hoops” to make claims, even giving up on doing so due to the onerous process.

“In our engagement with insurers, we were also told that offering prolonged medical leave insurance and group personal accident insurance at the same level of coverage as Wica would result in higher insurance premiums for platform companies, compared to an insurance policy based on the committee’s recommended approach,” he said.

He added that this is unsurprising given that the scope of coverage for this policy is much wider on a 24/7 basis.

GIA’s suggestion, said Dr Koh, would thus result in higher business costs for platform companies, especially since they would need to purchase insurance that covers all platform worker, regardless of the type of insurance.

As for GIA’s suggestion for platform workers to rely on MediShield Life, Dr Koh said it is essentially asking them to pay for their own medical expenses.

This is because employees are covered for up to S$45,000 in medical expenses for work injuries by their employers under Wica.

“There is no reason why platform workers should have to rely on MediShield Life, which they pay for using their own MediSave,” he said.

For these reasons, GIA’s proposal is not a viable alternative to the committee’s recommendation of requiring platform companies to provide the same scope and level of compensation as employees under Wica.

Dr Koh also took aim at GIA chief executive Ho Kai Weng’s comment that “financial protection for platform workers can be efficiently achieved through the existing solutions compared to the Wica-based solution”.

He asked: “If it was so viable, why didn’t the insurers and the platform companies suggest this earlier when there were workers who were injured or suffered death on the job?”

The committee’s discussions with insurers, he said, showed it was not possible to do so in a cost-effective way.

Given the “confidence” that GIA has in the efficiency of existing products and policies, Dr Koh suggested GIA work closely with platform companies to offer financial protection and compensation for workers at the level of Wica as soon as possible by the first quarter of next year, to provide better coverage for workers in the interim.


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