Thai employees need to have access to doctors in private hospitals, as they are considered to be much better than doctors provided via the social security system. Therefore, Thai employees care most about medical insurance, a provident fund (Retirement) next, then Disability and finally, their bonus.
A key benefit trend in Thailand is definitely towards more mid-range health care benefits where better cancer coverage is offered.
In general, the cost for benefits for an employee per month does not exceed 1,000 Baht. However, costs may vary depending on the level of coverage and size of the group.
Mandatory employee benefits in Thailand include life-death coverage, disability (invalidity benefits), medical treatment coverage, maternity benefits, child allowance, old age benefits, workman’s compensation (WCF), and unemployment. Common supplementary employee benefits include life insurance, group disability, group medical insurance and retirement via Thailand’s Registered Provident Funds.
Mandatory Employee Benefits in Thailand
Life – Death Benefits
If an employee (or an insured person who pays contributions which provide entitlement to benefits under the Social Security Act) dies without sustaining a non-work related injury or sickness and has paid contributions for not less than one month during the period of six months before his/her death, the following compensation benefits will be paid:
- Funeral Allowance amounting to THB 50,000, payable to the documented and approved designated funeral undertaker.
- Survivors’ Allowance shall be paid to the designated beneficiary specified in writing by the insured person.
Disability Benefits (Invalidity Benefits)
An insured person is entitled to compensation benefits for a non-occupational disability provided he/she has paid contributions for not less than 3 months within the period of 15 months prior to becoming disabled as certified by the Medical Committee. Example:
- Medical examination and diagnosis expenses
- Medical treatment expenses
- Medicine and medical supplies expenses
- Expenses for admission to and treatment in medical establishment
- Cost of ambulance or transportation for invalid person
- Physical, mental and occupational rehabilitation expenses, and
- Other necessary expenses, pursuant to Section 69 and Section 70 of the Social Security Act
Medical Treatment Benefits
An insured person shall be entitled to non-occupational injury or sickness compensation benefits provided he/she has paid contributions for not less than 3 months within the period of 15 months before the date of receiving medical services. The insured shall receive medical treatments free of charge for non-occupational injury or sickness at the registered hospital shown on his/her Social Security card.
(Except for 14 diseases that are not covered by the Social Securities Act)
The compensation benefits shall consist of:
- Medical examination expenses
- Medical treatment expenses
- Lodging, meals and treatment expenses in hospital
- Medicine and pharmaceutical expenses
- Cost of ambulance or transportation for patient
- Other necessary expenses (such as Preventive Health Care and Grant for insured who suffered due to inadequate medical care) In accordance with the rules and rates prescribed and approved by the Medical Committee.
An insured person is entitled to compensation benefits relating to child birth for themself, or their spouse, or for a woman cohabitating with an insured person and disclosed as husband and wife according to the regulations prescribed by the Secretary-General in case the insured person has no wife. The insured must have paid contributions for not less than 5 months within 15 months prior to the date of receiving medical services.
An insured parent who has paid contributions for not less than 12 months within 36 months before the month of entitlement to benefits receives a monthly child allowance amounting to 600 baht per month per child for a maximum of three children.
Old Age Benefits
An insured person is entitled to an old-age pension provided that he/she is 55 years of age or older and has paid contributions for not less than 180 months, irrespective of whether the period is consecutive or not. The old-age pension shall be paid based on the percentage of monthly wages and periods of contribution in accordance with the rules as stated in the Ministerial Regulations.
Workmen’s Compensation Fund (WCF)
The Worker’s Compensation Fund was set up in accordance with the Workmen’s Compensation Act. The purpose of the fund is to replace an employer’s liability and to give prompt and equitable protection against injury, disease, disability, or death resulting from employment. It is the employer’s sole responsibility to pay contributions to the WCF annually, like an insurance premium. Employees are eligible to receive compensation benefits consisting of medical services, monthly indemnity, rehabilitation, and funeral allowances in the event of work-related injuries.
An employee who is an insured person shall be entitled to compensation benefits in case of unemployment provided that he/she has paid contributions for not less than 6 months within a period of 15 months prior to unemployment and meets the following conditions:
- Having the ability to work, ready for suitable job as being provided, or not refusing job training, and having been registered at the Government Employment Services Office at which he/she appears not less than once a month.
- Unemployment of the insured person must not be caused by:
- Termination due to performing duties dishonestly
- Intentionally committing a criminal offence against the employer
- Intentionally causing damage to the employer
- Violating work regulations, rules or lawful order
- Seriously neglecting duties for seven consecutive days without reasonable cause
- Causing serious damage to the employer due to negligence
- Being imprisoned by a final judgment of imprisonment, except for an offence that has been committed by negligence or a petty offence
- The person is not entitled to an old-age pension.
- An insured person shall be entitled to unemployment benefits on or after the eighth day from the date of becoming unemployed with the last employer in accordance with the rules and rates as stated in the Ministerial Regulations.
- Being a person not entitled to old-age benefits as defined under Chapter 7 of the Social Securities Act; such a person is not entitled to unemployment benefits.
- Covers unemployment caused by an employer that has decided to temporarily close their office or factory due to a force majeure such as a flood.
Supplemental Employee Benefits*
*These are not compulsory under Thai law. The employer may choose to provide such benefits to the employee.
Life Benefits (Group Life – Death Benefit)
Most group life insurance plans are one-year renewable term insurance with optional riders for accidental death and dismemberment and total and permanent disability. The coverage varies from either 12 to 48 times monthly salary or a flat amount for all employees regardless of rank. All eligible members for Group Life Cover are automatically covered under the policy up to a pre-determined acceptance limit (Free Cover Limit) for a particular benefit without having to provide any medical evidence.
A group life insurance plan covers all causes of death of the insured, 24 hours, worldwide. The benefit provides a lump sum equal to the sum insured, payable on the death of the insured person. The benefit is excluded if the insured person commits suicide within one year of entry date or is intentionally murdered by his/her beneficiary. Employer contributions are tax-deductible as a business expense; employees usually do not contribute. The benefit is considered as taxable income to employees, but waiving this condition is under consideration.
Group Disability Benefits
Most group life insurance plans are one-year renewable term insurance with optional riders for accidental death and dismemberment and total and permanent disability. The coverage varies from either 12 to 48 times of monthly salary or a flat amount for all employees regardless of rank.
Group Medical Benefits
Group medical insurance or group health insurance is also written under a one-year renewable contract. The medical insurance can be written by either a life insurer as a supplementary contract to a life insurance policy or by a non-life insurer as a master policy.
Employer-provided medical plans are popular and found in most companies. The standard benefits cover non-occupational injury or sickness. Features such as deductibles and co-payments are relatively uncommon but available.
The medical insurance covers customary and reasonable medical expenses incurred at licensed hospitals or clinics and performed by licensed medical practitioners. Many medical insurance policies typically provide both 24-hour and worldwide coverage. The insurer issues a medical card to each individual insured member for cashless treatments at the insurer’s network hospitals and clinics in Thailand.
While most medical insurance plans are paid for by the employer, it is quite common for employees to contribute if they want higher benefit levels and/or dependents coverage. These contributions are tax-deductible as a business expense for the employer and not considered as taxable income to employees.
Registered Provident Funds
Provident funds were established in 1987 to encourage private sector employees to save for retirement. They are viewed as fringe benefits offered by employers to motivate employees and provide a source of long-term savings for an employee’s retirement.
Provident funds can be set up voluntarily with cooperation between employers and employees. Upon agreement, the two sides set up a committee that oversees the fund. In Thailand, provident funds are always established in large enterprises.
Companies with 100 employees or more are required to arrange for employee contributions to a provident fund. The employee shall pay his savings into the fund through the employer’s deduction from wages, and the employer shall pay the contribution into the fund at the rate prescribed in the fund’s articles, provided that the rate so prescribed shall not be less than 2% but not more than 15% of the wages.
An employee whose salary is less than THB 10,000 will not be forced to make contributions, but the employer will still have to contribute 2% of that employee’s salary.
The committee overseeing the fund is comprised of representatives from the employer and elected representatives of employees. The committee then chooses the fund manager. The scheme regulatory authority is under the Securities and Exchange Commission (SEC).
The employees will receive lump sum proceeds at the time of their resignation or retirement. The contributions paid to the provident fund by employees and employers are tax deductible, and the benefit payment is tax exempt.
The SEC had introduced new regulations permitting provident fund managers to offer members investment choices. The regulation states that a conservative option must always be offered. In addition, other options can be offered, but the fund manager must specify clear investment policies for each option.