Health Savings Accounts
Do you put your health into a savings accounts, so that you can later withdraw some health to top up your diminishing health? In Singapore, you can do that through Medisave, a compulsory national health savings accounts.
What is this health savings accounts known as Medisave?
The Government has created health savings accounts for everyone who contributes money to their personal CPF funds. The health savings accounts are known as CPF Medisave Accounts.
Medisave was introduced in 1984. As an employee, you contribute a part of your monthly wages to your Medisave health savings accounts. The exact amount depends on your age. The ratio of your CPF contribution that will be paid into your Medisave health savings accounts starts from 0.1884 (below 35 years old) and rises up to 0.9 (above age 65), depending on age. CPF Board automatically calculates the sum for these health savings accounts as mandated by law.
What are the benefits of Health Savings Accounts?You can withdraw 'health' by signing an authorisation form to use it for medical related payments. Your money sitting in this health savings accounts can be use for:
(1) Hospital bills for stays of more than 8 hours.
You can pay hospital bills for yourself, spouse, children and parents (of any nationality) or grandparents (citizens or permanent residents). Limits to withdraw amount from the health savings accounts apply.
(2) Selected Outpatient health-related bills
As examples, funds can be withdrawn from health savings accounts for chronic medical disease treatment for diabetes mellitus, hypertension, high cholesterol, stroke, asthma and chronic obstructive airway disease.
(3) Maternity Package
Pre-delivery medical expenses, delivery procedure and daily hospital charges are some examples of bills that may be settled with health savings accounts.
How much interest do I get with Medisave health savings accounts?Interest rate is currently 4%+1% = 5%.
From 1 January 2008, savings in Medisave Account is pegged to the 12-month average yield of the 10-year Singapore Government Securities (10YSGS) plus 1%.
A 4% floor for the Medisave rate will be maintained for the first two years (2008 - 2009). Extra 1% of interest will be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA.
Are there limits to the Medisave health savings accounts balance?
Yes. You need to contribute to your Medisave Account up to the prevailing Medisave Contribution Ceiling which is $34,500 (as at 1 July 2008).
The excess will be transferred to the Special Account for members aged below 55, and to the Retirement Account for members aged 55 and above.
For those who have set aside the full CPF Minimum Sum, the excess CPF contribution will be transferred from the Medisave Account to the Ordinary Account.
This ceiling on health savings accounts balance may be adjusted again every 1 July.
Where can I get more information on Medisave health savings accounts?
CPF Board website = www.cpf.gov.sg
Thank you for reading
Singapore Savings Account Rates.
