Q1. What is Voluntary Health Insurance Scheme (VHIS)?
VHIS is a policy initiative implemented by the Food and Health Bureau (FHB) to regulate indemnity hospital insurance plans offered to individuals by insurance companies. The participation by insurance companies and consumers is voluntary.
Under the VHIS, the participating insurance companies offer certified individual indemnity hospital insurance plans (“Certified Plans”) for consumers to purchase voluntarily.
Q2. What are the objectives of VHIS?
The policy objectives of VHIS are to -
(a) enhance the protection level of hospital insurance products;
(b) provide the public with an additional choice of using private healthcare services through hospital insurance; and
(c) relieve the pressure on the public healthcare system in the long run.
Q3. What is the scope of VHIS?
VHIS covers insurance products which -
(a) provide hospital insurance protection of indemnity nature bought by individuals for themselves and their families
VHIS does not cover insurance products which -
(a) provide non-hospital medical insurance protection e.g. outpatient services; or
(b) provide non-indemnity medical insurance protection e.g. hospital cash, critical illness cash plans; or
(c) are group insurance bought by employers for their employees
Q4. What are the differences between Certified Plans under VHIS and other individual indemnity hospital insurance products?
Certified Plans are officially certified by the Food and Health Bureau to have met a number of standard features to enhance consumer protection, including standardised policy terms and conditions, guaranteed renewal up to the age of 100 years, and more comprehensive benefit coverage. For details, please see Q8.
Q5. How is consumer interest protected under VHIS?
As in the case of all insurance businesses, the insurance companies participating in VHIS and their business practices are subject to the supervision and regulation of the Insurance Authority under the Insurance Ordinance (Chapter 41). In addition, the insurance companies registered as VHIS providers are required to comply with the rules of the scheme, including the product compliance requirements and the code of practice set by the Food and Health Bureau.
Q6. When is VHIS implemented?
VHIS has been fully implemented on 1 April 2019. As from this date -
(a) The participating insurance companies will start offering their Certified Plans and accepting new applications#.
(b) The insurance policies issued under a Certified Plan effective and with premium paid on or after 1 April 2019 will be eligible for tax deduction under Inland Revenue Ordinance (Cap. 112).
(#) If you have already purchased an individual indemnity hospital insurance policy and your policy will be due for renewal on 1 April 2019 or afterwards, your insurance company (if participating in VHIS) will invite you for renewal into a Certified Plan or offer you a Certified Plan as an option. See also Q30 to Q32.
Protection offered by Certified Plans under VHIS
Q7. What are Certified Plans?
All Certified Plans, including Standard Plans and Flexi Plans, must meet or exceed the minimum product standard of VHIS.
(a) For the Standard Plans, the terms and benefits are standardised with prescribed minimum, such as minimum benefit coverage and amounts.
(b) For the Flexi Plans, they must provide basic protection equivalent to Standard Plan coverage, plus a flexible top-up protection to suit market needs subject to certain rules set out by the Food and Health Bureau.
Due to variety in product design of Certified Plans available in the market, consumers are advised to check carefully the terms and benefits of insurance plans, understanding their rights and obligations, and making product and premium comparisons.
Q8. How attractive are the Certified Plans?
All Certified Plans must comply with the minimum requirements of providing the following key product features -
(a) Standardised policy terms and conditions with minimum benefit coverage and benefit amounts [The terms and benefits are detailed in the Certified Plan Policy Template].
(b) Guaranteed renewal up to age of 100 years – The guarantee is irrespective of whether or not your health condition has changed after the policy is in force.
(c) No “lifetime benefit limit” - Your benefits will be continued until you reach 100 years of age*.
(d) Cooling-off period of 21 days － You can enjoy a cooling-off period of 21 days during which you can cancel the policies with full refund of premium.
(e) Premium transparency － You can access the premium schedules of all Certified Plans on the website of the insurance companies concerned and the official VHIS website.
(f) Coverage extended to include –
(i)Unknown pre-existing conditions – An unknown pre-existing condition refers to a health condition, such as sickness, which has existed but you are unaware of its existence when applying for insurance coverage. According to the terms and conditions, all Certified Plans will provide partial coverage of unknown pre-existing conditions in the second and third year after policy inception, at 25% and 50% respectively. Full coverage i.e. 100% will be provided from the fourth year onwards.
(ii)Treatment of congenital conditions – Cover investigation and treatment of congenital conditions which have manifested or been diagnosed from the age of 8, subject to the same reimbursement arrangement that applies to unknown pre-existing conditions.
(iii)Day case procedures – Cover surgical procedures (including endoscopy) not conducted during hospital stay (such as clinics or hospital day centres).
(iv)Prescribed diagnostic imaging tests – Cover Computed Tomography (CT scan), Magnetic Resonance Imaging (MRI scan) and Positron Emission Tomography (PET scan) conducted during hospital stay or in an outpatient setting, subject to 30% coinsurance. For example, if the expense incurred is $5,000, the policy holder has to pay for 30% of the cost, i.e. $1,500, while the insurance company has to pay for 70% of the cost, i.e. $3,500.
(v)Prescribed non-surgical cancer treatments – Cover radiotherapy, chemotherapy, targeted therapy, immunotherapy and hormonal therapy.
(vi)Psychiatric inpatient treatments in local hospitals – Cover psychiatric treatments during confinement in Hong Kong.
(*) Some Flexi Plans that meet specified criteria can have lifetime benefit limits. Please see Q.9 for details.
Q9. Why are there some Certified Plans with lifetime benefit limits?
In the hospital insurance market, there are some insurance plans that are designed to provide high-end benefits. Such plans adopt lifetime benefit limit to make the premiums more affordable. These plans can cater the needs of some consumers who need higher coverage, and increase the flexibility of VHIS. To ensure that such plans are regulated, only Flexi Plans that meet the following criteria can have "lifetime benefit limit" -
(a) The annual benefit limit must be at least HK$5 million;
(b) The lifetime benefit limit must be at least HK$20 million or 4 times of annual benefit limit, whichever is higher; and
(c) There must be no itemised dollar limit for at least 10 of the 12 standard benefit items (i.e. the benefit items prescribed under the Standard Plan framework).
As in the case of all Flexi Plans, the policyholders should be provided with the option to switch to the Standard Plan without re-underwriting upon policy renewal. This means that the policyholders of the Flexi Plans with exemption mentioned above can continue to enjoy protection under Standard Plan even if the lifetime benefit limit is reached.
Q10. Is there any restriction on the choice of hospitals and doctors under VHIS?
The basic protection of all Certified Plans (including the Standard Plan in entirety, and the basic protection of Flexi Plans equivalent to Standard Plan) provides free choice of hospitals and doctors. Top-up benefits of Flexi Plans may link with a network of hospitals and doctors.
Q11. Can I still use the public hospital services, and use the insurance to pay for public hospital charges?
Yes to both questions. The purchase of Certified Plans is entirely voluntary and will not affect your rights to use public healthcare services.
Q12. Can I choose hospitals and doctors outside Hong Kong?
Yes. Top-up benefits of Flexi Plans may apply to certain geographical regions. Standard Plan and basic protection of Flexi Plans equivalent to Standard Plan are required to provide global coverage, except for psychiatric treatments that are limited to Hong Kong.
Q13. Is hospital admission necessary for making insurance claims?
Not necessary. All Certified Plans must cover day case procedures (such as endoscopies), prescribed diagnostic imaging tests and prescribed non-surgical cancer treatments for which overnight hospital stay is not necessary. If the attending doctor considers hospitalisation medically necessary, the care received will also be covered.
Q14. Is dental treatment covered under VHIS ?
Standard Plan only covers dental treatments related to emergency treatment and surgery during confinement arising from an accident. Other inpatient and outpatient dental coverage may be provided as top-up protection of Flexi Plans. Please consult your insurance company on the exact coverage of each Certified Plan.
Q15. What is the meaning of an unknown pre-existing condition and how is it covered under VHIS?
An unknown pre-existing condition refers to a health condition, such as sickness, which has existed but you are unaware of its existence when applying for insurance coverage.
According to the terms and conditions, all Certified Plans will provide partial coverage of unknown pre-existing conditions in the second and third year after policy inception, at 25% and 50% respectively. Full coverage i.e. 100% will be provided from the fourth year onwards.
Choice of insurance companies
Q16. How many insurance companies will participate in VHIS?
We have published the list of participating insurance companies on the official VHIS website, and will update the list regularly.
Q17. How can I know if an insurance company participates in VHIS?
Upon successful registration as a VHIS provider, the insurance companies are required to disclose their registration status to consumers at least through their company websites. You may also check the list of participating insurance companies through the official VHIS website.
Choice of insurance plans
Q18. Is there only one choice of Certified Plan?
No. In addition to Standard Plan that all the participating insurance companies must offer, they are allowed and encouraged to offer Flexi Plans that provide top-up protection, such as higher benefit amount and wider benefit coverage.
Q19. What is the difference between Standard Plan and Flexi Plans?
Standard Plan benchmarks the minimum complying requirements of VHIS. As the policy terms and benefits of Standard Plan are standardised, the Standard Plans offered by different insurance companies will be virtually the same (except for very limited minor allowable variations).
Flexi Plans offer basic protection equivalent to Standard Plan coverage, plus a flexible top-up protection such as higher benefit amounts and broader benefit coverage, which vary from plan to plan and company to company.
Q20. How many Certified Plans will be available for application?
The initial industry response to VHIS is positive. More and more Certified Plans would be available in phases.
Q21. Will there be hospital insurance products other than Certified Plans available for my choice?
VHIS is a voluntary scheme for both insurance companies and consumers. Insurance companies are allowed to offer non-VHIS hospital insurance plans alongside Certified Plans. Consumers will have the freedom to choose which insurance plans best suits their needs.
Q22. Will the premiums of Certified Plans be regulated by FHB?
FHB will not regulate the premiums of Certified Plans. However, the participating insurance companies will have to publish the premium schedules of their Certified Plans that facilitate comparison and the premium schedule of all Certified Plans of insurance companies can be accessed on the official VHIS website.
Q23. Will the premiums vary by age and gender?
Yes, in general.
Q24. Can the insurance companies adjust the premiums when renewing my policy?
Yes, but the rate of adjustment in your case must equally apply to other customers within the same age-gender group of your insurance plan. This restriction can prevent the insurance companies from treating you unfairly.
Buying a Certified Plan
Q25. When and from where can I buy a Certified Plan?
From 1 April 2019. The list of VHIS participating insurance companies and Certified Plans will be published on the official VHIS website before 1 April 2019.
If you do not have any individual indemnity hospital insurance cover now or your insurance company has not joined VHIS, you are encouraged to consider purchasing a Certified Plan.
Q26. Is there any age limit for subscription?
The participating insurance companies are required to consider applications from Hong Kong residents aged between 15 days and 80 years.
Q27. Can I subscribe a Certified Plan if I am not a Hong Kong resident?
Yes, but the insured person must be a Hong Kong resident for the purpose of tax deduction. According to the rules of VHIS, the participating insurance companies are required to consider applications for Certified Plans in relation to insured persons being Hong Kong residents aged between 15 days and 80 years. However, it is at the discretion of the companies whether to consider applications in relation to insured persons being non-Hong Kong residents according to their business practices.
Q28. Will there be guaranteed acceptance of application for a Certified Plan?
The participating insurance companies may decline an application after a fair and reasonable underwriting process in accordance with the principles set out in the Code of Practice under VHIS.
Q29. Will premium loading or exclusion of particular illnesses be allowed?
Yes, provided that there are pre-existing health conditions or other health risks such as smoking habit, family medical history and occupational hazard.
Q30. Will my insurance policy issued under a Certified Plan not be renewed?
No, unless important information (such as pre-existing health conditions) required in the process of application is not provided accurately and completely.
Q31. If I already have an individual indemnity hospital insurance coverage, how can I switch to a Certified Plan?
If your insurance company has participated in VHIS, it must offer its existing policyholders of individual indemnity hospital insurance an opportunity to switch to Certified Plans. The timing of the migration may depend on the renewal cycle of your existing insurance policy or other arrangements that your insurance company may offer. You may wish to approach your insurance company or agent/broker.
Q32. If my insurance company has participated in VHIS, when will it arrange migration for me?
Please check with your insurance company direct.
We anticipate that most insurance companies will arrange migration for existing customers as soon as possible. In any event, the offer of migration must be made within 10 years starting from the full implementation of VHIS on 1 April 2019.
Q33. What will be the migration arrangement?
The migration arrangement may take one of the following forms -
(a) Direct renewal from your existing plan into a Certified Plan (i.e., Same plan with VHIS features incorporated) at your next policy renewal; or
(b) Beside your existing plan, you are given an option to change to a Certified Plan (Different plan with VHIS features incorporated). In this case, you may be subject to reunderwriting and required to disclose your latest health conditions. If your enrolment is rejected or you refuse to accept the reunderwriting result, you may still stay insured with your existing plan.
Q34. Can the insurance company pick and choose which customer to migrate and which does not?
No, the insurance companies are required to offer migration for all their existing individual indemnity hospital insurance policyholders. Insurance companies are also required to treat policyholders fairly in the migration process.
Q35. Can I reconsider my decision after purchasing a Certified Plan?
Upon successful application, you may reconsider your decision of the purchase of a Certified Plan. You have the right to cancel it with full premium refund during the cooling-off period (at least 21 days) provided that no claim has been made.
Q36. How can an insurance policy qualify for claiming tax deduction under VHIS?
In order to be eligible for claiming tax deduction under VHIS, an insurance policy must meet all the following criteria -
(a) The policy provides coverage of a Certified Plan under VHIS;
(b) The policyholder is a personal income taxpayer or his/her spouse;
(c) The insured person is the policyholder or the policyholder’s “specified relatives” as defined under the Inland Revenue Ordinance (Cap. 112); and
(d) The insured person is a Hong Kong resident*.
(*) Including Hong Kong Identity Card holders, and people aged under 11 who are not Hong Kong Identity Card holders but their parents are Hong Kong Identity Card holders when they were born or adopted. For detailed definitions, please refer to Inland Revenue Ordinance Cap. 112.
Q37. Who can claim tax deduction for the premium paid for an eligible VHIS policy?
Any taxpayer who or whose spouse is the policyholder of an eligible insurance policy.
Q38. What is the definition of “specified relatives”?
A specified relative of a policyholder refers to the policyholder’s -
(b) Children* aged less than 18 / aged 18 to less than 25 receiving full-time education / aged 18 or above but incapacitated for work by reason of physical or mental disability;
(c) Brothers or sisters* aged less than 18 / aged 18 to less than 25 receiving full-time education / aged 18 or above but incapacitated for work by reason of physical or mental disability; or
(d) Parents or grandparents* aged less than 55 but eligible to claim an allowance under the Government’s Disability Allowance Scheme / aged 55 or above.
(*) Step and adopted relationship also apply. For detailed definitions, please refer to Inland Revenue Ordinance Cap. 112.
Q39. Is there any limit on the amount of premium of eligible policies that can claim tax deduction?
Yes, the premium that a taxpayer can claim tax deduction is up to $8,000 per insured person in each assessment year. See the following example that two taxpayers purchase VHIS policies for themselves respectively -
Policyholder Insured person Annual Premium Paid Eligible premium amount (capped at $8,000 per insured person) Assumed tax rate Amount of tax saved
Taxpayer A Taxpayer A $5,000 $5,000 17% $850
Taxpayer B Taxpayer B $12,000 $8,000 17% $1,360
Q40. Is there any limit on the number of eligible policies for which I can claim tax deduction?
No. See the following example that a taxpayer purchases VHIS policies for himself and his specified relatives -
Policyholder Insured person Annual Premium Paid Eligible premium amount (capped at $8,000 per insured person) Amount of tax saved (assuming tax rate is 17%)
Taxpayer Taxpayer $5,000 $5,000 $850
Taxpayer Spouse $7,000 $7,000 $1,190
Taxpayer Mother $9,000 $8,000 $1,360
Taxpayer Son $3,000 $3,000 $510
Taxpayer Grandmother $12,000 $8,000 $1,360
Total --- $36,000 $31,000 $5,270
Q41. How much is the amount of tax deduction that I can enjoy?
The amount of tax deduction will depend on the number of VHIS policies claimed, the amount of premiums, and the tax rates that apply in your case. See the following example -
Policyholder Insured person Annual Premium Paid Eligible premium amount (capped at $8,000 per insured person) Assumed tax rate Amount of tax saved
Taxpayer A Taxpayer A $9,000 $8,000 17% (highest marginal tax rate) $1,360
Taxpayer B Taxpayer B $7,000 $7,000 15% (Standard tax rate) $1,050
Taxpayer B Taxpayer B’s Daughter $4,000 $4,000 15% (Standard tax rate) $600
Taxpayer C Taxpayer C’s spouse $6,500 $6,500 10% $650
Q42. If an insurance policy covers a Certified Plan as well as a life insurance plan, will the total premium of this policy be eligible for tax deduction?
No, only the premium paid in relation to the Certified Plan is eligible for tax deduction.
Q43. If a personal income taxpayer is already subject to the standard tax rate of 15%, can he/she save taxes by claiming tax deduction for qualifying premium of VHIS policies?
Yes. The net assessable income can be reduced by the amount of the qualifying premium before the standard tax rate applies. The tax savings are equivalent to the multiple of the qualifying premium and 15% in this case.
Q44. When will the tax deduction under VHIS be effective?
The tax deduction has been effective in the assessment year starting from 1 April 2019. This means that the policies issued under Certified Plan that are effective and with premium paid on or after 1 April 2019 are eligible for the tax deduction.
Q45. If I have any questions about tax deduction under VHIS, what should I do?
You may browse the FAQs page maintained by the Inland Revenue Department (IRD), or contact the IRD.