Health Insurance, Taxes, and Parenthood

Last week I received an email from our HR department stating that under the recently passed TRAIN (Tax Reform for Acceleration and Inclusion) law, premiums on health insurance will now be classified under “other benefits.”  That means that all bonuses, cash gifts, AND health premiums in excess of P90,000 will be part of the taxable income.   Employees now have a tax liability, since the implementation of this tax reform started January (instructions for health premiums was released recently in (RMC) No. 50-2018).

Of course this did not land well with my colleagues.  Nobody wants to pay extra taxes, especially since it isn’t exactly a bonus or cash paid to the employee.  Some of my office mates were even willing to remove their spouses as dependents, since they had their own health cards.  I personally didn’t like the idea, but there was no way I was going to remove any of my dependents.  Health insurance is invaluable.  I had to learn that through experience.

When my son was barely 1 month old, he got sick and was diagnosed with bacterial meningitis.  He was enrolled in me and my wife’s HMOs, but our pediatrician then was not covered or accredited.  For some reason, we chose to stick to her because she was the default partner of my wife’s OB and we didn’t know any other pediatrician.  As new parents, we weren’t really thinking about the possibility of him getting seriously ill and its corresponding costs.  To cut the long story short, we shelled out more than P100K for the hospital bill.  Literally zeroing out our emergency fund and savings account.  We had already spent a chunk of our savings on delivery costs and fees a month before.

baby birth born care
Photo by on

We immediately looked for another pediatrician that was accredited with both of our HMO’s.  Since then (3 years), we have brought our son to the ER 5 times, with an average bill of P5,000 each time; all covered by the health card.  I’m certainly not wishing that we’d have to maximize our coverage or go through what we went through again, because the level of stress and worry that comes with having a sick child can be burdensome.

Having health insurance coverage for you and you family does not give you 100% peace of mind, especially if it’s your child needing medical attention.  I don’t think parents ever stop worrying about their children, even when they are healthy.  But being covered by insurance takes away one less thing to worry about.  You can focus on your child and his/her needs, and not worry about hospital costs and professional fees.  Health insurance not only protects your savings, but also provides peace to a certain extent- making it by far my favorite employee benefit.




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