Is Social Insurance Alone Enough For Foreign Employees in China?

Social insurance is in principle a compulsory scheme for employees working in China, that needs to be contributed by both the employee and the employer. It normally includes a medical insurance component, along with others like housing fund, pension and so on.

Medical insurance is one component of the basic social security insurance scheme that could cover inpatient and outpatient costs at public hospitals in the city you live in, normally with a deductible and a relatively basic annual limit.?

Would that suffice the needs of foreign employees? It would depend on your company’s budget. But in general, if you want experienced and foreign talents with high credentials in your company, you will need to provide additional commercial insurance for them.

Even for most Chinese companies with local employees now offer additional commercial insurance packages for them, let alone certain foreign employees with high credentials.

Below are some key reasons to consider additional commercial health insurance coverage for your foreign employees:

Coverage at private hospitals / international departments at public hospitals

Most foreigners living in China needs to visit private hospitals for healthcare as some local hospitals are not catered for foreign patients where most of the staffs only speak very limited or no English, and the queues at public hospitals can be a bit long.

As social medical insurance only covers the regular departments at public hospitals, they will not cover any expenses arise from private hospitals, or even at the international departments at public hospitals.

In order to provide coverage at private healthcare for your foreign employees, you will need to source for health insurance plans that could cover them. They should also have direct-billing with the hospitals as you do not wish to have a tedious claim process every time one of your staffs files a claim.

Access to healthcare and insurance services in English

Though the Chinese public healthcare system is now very efficient through years of development in the past, and it is truly remarkable for them to provide healthcare to such enormous population. However due to the overwhelmingly large volume of local patients going to the public hospitals, they can be packed, and there will not be much English services available as they are mostly catered to local patients in the first place.

This can be an issue for many expatriates working and living in China as they may not be familiar with the local healthcare system and may have limited Mandarin skills. If they cannot be covered for private healthcare from their employment, they may rather go to another company that provides such coverage and that would mean increased staff turnover for your company (not a good sign).

More comprehensive insurance benefits

Many expatriates are looking for certain benefits including mental health, physiotherapy, ICU, imported medications, private ward etc. that can only be found in a high-end medical insurance plan. Social insurance alone certainly would not include those benefits, which means your foreign employees would need to pay out-of-pocket for some of those benefits that can be essential for them.

For example, most international departments at public hospitals and private hospitals that are catered for foreign patients only offer private wards, and such wards are not covered by the basic social medical insurance schemes. Certain imported medications may also be not within the social insurance’s coverage scope.

As the needs of the specially skilled foreign employees can be relatively special (e.g. education professionals), it is important to provide adequate health coverage for them as part of their employment package.

About the author

I'm an insurance broker at Mingya Insurance Brokers based in Beijing, and my company works with multiple insurance companies in China providing insurance plans eligible for expatriates in China. Our insurance partners include AXA, Allianz, AIG, Bupa, Cigna, GBG, MSH, Medilink, Ping An etc.

I specialise on insurance solution planning for expatriates in China, particularly health insurance. I have been assisting expatriates in China with their insurance solution planning since 2018, as well as group insurance planning for corporates and institutions' foreign employees. Currently our clientele includes international schools, foreign enterprises, embassies and so on.

I was born in Beijing, and am able to communicate in fluent English and Mandarin. I held a financial advisor's license issued by the Monetary Authority of Singapore (MAS) for 2 years, and I am currently holding an insurance broker's license issued by the China Banking and Insurance Regulatory Commission (CBIRC) since 2018.