Joyce Wen
The National Healthcare Security Administration, the Ministry of Finance, and the General Administration of Taxation issued the Guiding Opinions on A Temporary Reduction of the Employee Basic Medical Insurance Premiums (the “Guiding Opinions”) on 21 February 2020. The Guiding Opinions aim to effectively reduce the burden on businesses and support their resumption of work and production.
The Guiding Opinions clarifies three matters. The first is the scale and time limit of the temporary reduction. Beginning from February 2020, the employee medical insurance premiums paid by the employers are halved for no more than 5 months. The second is a regionally differentiated policy where the premium payment may be reduced in regions where the cumulative balance of the medical insurance fund can pay for more than 6 months of benefits. If the fund cannot pay for 6 months of benefits but a reduction of premium payments is necessary, then the provincial government will make an overall arrangement. Payment deferrals should in principle last no more than 6 months, with no late payment penalties assessed during such period. The third involves concurrent strengthening of relevant management to ensure the enjoyment of benefits, better fund management, and proper policy alignment. Provinces that have decided to implement the payment reduction policy should formulate specific plans before the prescribed time limit and submit them for recordation. All levels of medical security, finance, and tax departments are required to coordinate with one another to properly implement policies.
In addition, the Guiding Opinions require provinces to heighten their ideological awareness, strengthen organizational leadership, and provide targeted guidance to regions for ensuring that the relevant work is properly carried out.