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HMOs LIKELY TO RAISE PREMIUMS

 

Medical insurance premiums of Health Maintenance Organizations (HMO) in the country are likely to go up as the Bureau of Internal Revenue (BIR) firms up its position that VAT should be applied to gross receipts less medical utilization in its Revenue Memorandum Circular No. 39-2010 issued on May 21.

In the media release published in the BIR website, Commissioner Joel Tan-Torres urged non-compliant HMOS to comply with the ruling and factor the correct tax application in their products so they would not be shouldering the burden. This of course means that such taxes will be passed on to the HMO clients.

VAT zero-rated employers should not be affected. VAT-registered employers providing HMO medical programs to their employees should likewise not be affected as any VAT increase in the premiums could be deducted as input VAT from their output VAT.

The effect will most likely be felt by Non-VAT registered companies and employees who shoulder all or part of the premiums under Optional Dependents' Medical Coverage schemes

 


 See a related article at the Philippine STAR website.