VHIS FAQ: Benefits, tax deduction, why VHIS

1. What is Voluntary Health Insurance Scheme (VHIS)?

The Voluntary Health Insurance Scheme ("VHIS") is a policy initiative introduced by the Food and Health Bureau ("FHB") to regulate indemnity hospital insurance plans offered to individuals. The objectives of such initiative are to enhance the protection level of hospital insurance products, and to encourage the public to use private healthcare services when in need. The Certified Plans under VHIS can be divided into Standard Plans and Flexi Plans. Standard Plans provide standardized coverage; on top of the Standard Plan-equivalent coverage, Flexi Plans, provide higher benefit amount and more benefit items.

2. Why do we need the VHIS plans?

Medical expenses continue to increase over time, so individuals should plan for the medical protection needs of themselves and their family members as soon as possible. The VHIS Certified Plans are certified by FHB to fulfill a number of standard features with an objective to enhance consumer protection by standardizing policy terms and conditions (applicable to Standard Plans only). The Certified Plans under VHIS meet multiple standardized product features, including:

Tax deduction

Hong Kong taxpayer, who or whose spouse is the policyholder of a policy issued under a Certified Plan of VHIS, may claim tax deductions up to HKD 8,000 per insured person for the premiums paid in relation to the Certified Plan in each assessment year. The insured person of the Certified Plan should be the taxpayer or any of the specified relatives, which include the taxpayer's spouse and children¹, and the taxpayer's or his/her spouse's grandparents², parents³ and siblings³. There is no limit on the number of insured persons and the number of eligible policies⁴.

Premium transparency

Consumers can access or view the details of the premium schedules of all Certified Plans at the websites of the participating insurance companies and the official VHIS website.

Eligibility before aged 80; guaranteed renewal⁵ up to aged 100

VHIS plans provide guaranteed renewal up to the age of 100 years, regardless of any change in health conditions of the insured person. Also, the VHIS Standard Plans have no "lifetime benefit limit", and the benefits will not lapse until the insured person reaches the age of 100 years.

Coverage of unknown pre-existing conditions

Pre-existing conditions unknown to applicants are commonly excluded from benefit coverage in the existing indemnity hospital insurance plans available in the market. VHIS provides the following waiting period and reimbursement arrangement for pre-existing conditions:

First Policy Year	no coverage
Second Policy Year	25% reimbursement
Third Policy Year	50% reimbursement
Fourth Policy Year onwards	full coverage

^{_{1Children i) aged less than 18; ii) aged 18 to less than 25 receiving full-time education; or iii) aged 18 or above but incapacitated for work by reason of physical or mental disability
2Parents or grandparents i) aged less than 55 but eligible to claim an allowance under the Government's Disability Allowance Scheme or ii) aged 55 or above.
3Brothers or sisters i) aged less than 18; ii) aged 18 to less than 25 receiving full-time education or iii) aged 18 or above but incapacitated for work by reason of physical or mental disability.
4Tax deduction for the qualifying premiums paid under VHIS policy (not including levy) will be based on the premiums paid after deducting the premium discount (if any). Whether tax deduction is allowable for the qualifying premiums paid under VHIS policy (not including levy) are subject to the Inland Revenue Ordinance and the circumstances of the policy holder (as taxpayer) and the insured person(s) (as specified relative(s)). Please refer to the website of the Inland Revenue Department (IRD) or contact the IRD directly for any tax related enquiries. Zurich does not provide tax and/or legal advice. You should consult independent tax and/or legal advisor if needed.
5Subject to meeting requirements in the renewal provisions of policy terms and conditions and making payment of prevailing premium on each policy anniversary. Zurich reserves the right to amend premium, benefits and terms upon policy renewal.}}

3. How to calculate the tax deduction amount of VHIS plans?

The maximum amount that a taxpayer is eligible for claiming a tax deduction is HKD 8,000 per insured person in each assessment year. Hence, the tax deduction could be considered as discounts to VHIS plans.

The calculation of tax deduction is quite simple, and please refer to the formula as shown below:

Assume VHIS premium is HKD 5,000 annually, and taking the standard tax rate at 15% as an example,
the tax deduction amount equals = HKD 5,000 X 15% = HKD 750.

Tax deduction is also applicable to VHIS purchase for specified relatives (Refer to Question 2). Policyholder can apply for tax deduction for a maximum amount of HKD 8,000 per insured person for themselves or specified relatives. For example, a family of four is eligible to claim tax deduction up to HKD 32,000 per assessment year.

4. Can one split policy ownership with another person?

No. Zurich's underwriting practice allows one policy holder per policy.

5. How to choose between Standard Plan and Flexi Plan?

Standard Plans provide standardized basic coverage. If the claim reaches the coverage limit of any of the benefit item, there will be no extra medical benefits for buffer. On the other hand, Flexi Plans provide comprehensive and diversified medical coverage with more superior hospital insurance benefits.

Premiums of the two plans are different due to the variation in coverage and benefits. Flexi Plans provide better hospital benefits in general, but at a higher premium. You may consider choosing Flexi Plans to enhance your protection if budget allows. If your employer provides group medical insurance, which offers some levels of medical benefits and coverage, then the Flexi Plans with deductible options could act as a top-up cover and let you enjoy more comprehensive protection at a reasonable premium.

6. If you have already purchased medical insurance or are covered by your company's group medical insurance, why do you still need VHIS?

VHIS plans offer more comprehensive coverage than most of the existing hospital insurance plan in the market. Group medical insurance usually provides basic coverage and may not fully cover certain expensive medical expenses. You should also take into consideration the risk of absence of medical coverage during job transition or unemployment. By choosing the Flexi Plans with a deductible amount, which complements your existing group medical insurance, you could get comprehensive coverage at a reasonable premium.

7. Is/are newborn baby or parents over age of 70 years also eligible to purchase VHIS plans?

Hong Kong residents between the age of 15 days and 80 years are eligible to apply for Certified Plans. You could also enjoy tax deduction benefits if you purchase VHIS plans for specified relatives (refer to Question 2) and yourself, up to a maximum limit of HKD 8,000 for each insured person.

8. How to submit a claim and how long will it take to process?

Zurich strives to provide convenient and easy claim services. Simply take the following four steps to complete the claim process:

Step 1: Obtain all the required documents before discharged from hospital, complete the claim form and submit it together with all the necessary documents within 90 days after discharge from the hospital. The required documents include the originals of all receipts along with the proof of diagnosis, treatment category, treatment procedures, tests and/or services.

Step 2: You will receive an acknowledgment SMS and/or email to confirm that we have received your claim application.

Step 3: We will process your claim as quickly as possible, and we will contact you via email/ phone/ post to obtain other supporting document(s) if necessary.

Step 4: Upon receipt of your completed claim form and all required documents, we will conduct the claim assessment and notify you the claim result within five business days, through SMS, email or post. After the claim process is completed, we will reimburse the claim amount as soon as possible according to your selected payment method.

9. How to get more information about VHIS?

For more information about VHIS, you can visit the official website of VHIS provided by Health Bureau; for tax deduction related information, you can visit the Inland Revenue Department website; and for matters related to regulations of insurance company, you can visit the Insurance Authority website.

Our customer service representatives are always ready to answer your queries regarding VHIS. If you have any questions, please feel free to call our customer service hotline at +852 2968 2288 or e-mail us at enquiry@hk.zurich.com.

_{Disclaimer
The information contained in this material is for informational purposes only and is not intended to constitute any recommendation or advice to any person. Readers should not make any decision based solely on the information contained herein. Before acting on any information in this material, readers should consider their personal situation and seek independent advice.
The information contained in this material does not constitute an offer for the purchase or sale of any insurance products or services. No insurance product or service is deemed to be offered, marketed or solicited for sale in any jurisdiction in which such offer, marketing or solicitation would be unlawful under the laws of such jurisdiction.
Zurich Insurance (Hong Kong) has based this material on information obtained from sources it believes to be reliable, but it does not warrant the correctness, adequacy and completeness of the information contained herein.
The information contained in this material may not be reproduced either in whole, or in part, without prior written permission of Zurich Insurance (Hong Kong). In no event shall Zurich Insurance (Hong Kong) be liable for any damages or losses arising out of or in connection with the use, reliance on or distribution of the information contained in this material by any person.}