BPJS Kesehatan: A new medicare system ?

IES BulletinFebruary 2014

1 | IES Bulletin / February 2014

KPMG Advisory Indonesia

This Bulletin provides information regarding President Decree No. 12/2013, as amended by President Decree No. 111/2013, regarding Healthcare Insurance managed by the newly established Healthcare and Social Security Agency (Badan Penyelenggara Jaminan Sosial Kesehatan or “BPJS Kesehatan”).

Following 10 years of discussions and turf battles between various agencies on the National Social Security Reform Act (SJSN), particularly on healthcare insurance, the Government has issued President Decree No. 111/2013 on the newly implemented comprehensive social security scheme.

The previous social security agency (Jamsostek) has changed its name to Workers Social Security Agency (BPJS Ketenagakerjaan).

What’s new?• Both the Healthcare and Worker Social Security schemes

are now compulsory for all workers.• The Healthcare Insurance program is now handled by

BPJS Kesehatan ( prevously by Jamsostek).• There is no “opt-out” clause for companies who already

provide superior health insurance programs.• Employees are now required to participate and contribute

to this healthcare scheme. Previously, employees did not contribute.

• Indonesian citizens and all residents of Indonesia, including long term expatriate employees, are required to join.

• Registration with BPJS covers the whole family. Only one spouse is required to contribute to gain family coverage.

• Universal coverage for all Indonesian by 2019

Timing to Register

1-Jan-2014 1-Jan-2015 1-Jan-2016 1-Jan-2019

BPJS Kesehatan is operational. Companies which already joined the “healthcare” scheme of Jamsostek may start registering its employees. Non-employees may also register themselves and start paying the premium to obtain health insurance coverage.

Deadline for small, medium, large and state-owned enterprises to register their employees.

Deadline for micro enterprises to register their employees.

Deadline for non-employees (who have means to contribute) to register themselves.

Contribution details for private employers and employees• Contribution per month

Contribution by

1 Jan 2013 – 31 Dec 2013 (Jamsostek)

1 Jan 2014 – 30 Jun 2015

1 Jul 2015 onwards

Employer 3% (single) up to max. IDR

141,750 or

6% (married) up to max. IDR

283,500

4% up to max. IDR 189,000

4% up to max. IDR 189,000

Employee N/A 0.5% up to max. IDR 23,625

1% up to max. IDR

47,250Note: The above rates are applied to basic salary and fixed allowances up to a maximum of IDR 4,725,000 per month.

• The basic contribution provides coverage for a maximum of five family members, including step-children. Any additional family members such as parents and parents-in-law may be registered with a contribution rate of 1% per person per month.

• Retrenched employees may still claim coverage by the insurance for a maximum of six months after their last day of work.

• Contribution payments are due by the 10th of each month or the following work day if the 10th is a public holiday.

Non-compliance• Employers who have not complied to register its

employees are obligated to provide healthcare coverage similar to the benefits provided by BPJS Kesehatan.

• Late payments by private employers will be sanctioned with a 2% interest penalty per month for a maximum of 3 months. If contributions are unpaid for more than 3 months, the healthcare coverage may be temporarily suspended along with the loss of certain public services, including the application/ renewal of business permits and expatriate work permits and also the application of driver licenses, certificates of vehicle numbers (STNK) and passports for individuals.

• Regulations governing BPJS Ketenagakerjaan are still being drafted. BPJS Ketenagakerjaan will be in full operation effective 1 July 2015, and is expected to include an additional pension benefit scheme.

• It was compulsory for employers to provide basic health insurance under the previous Jamsostek program, although there was an opt-out clause. Most multinational companies chose to opt-out of this program and provide an alternative program for their employees. Companies would now need to re-assess whether to cease or continue the current healthcare program to ensure that their employees are receiving adequate coverage.

>> KPMG Note:

• The social security regulations provide ample preparation time for employers to register employees with BPJS Kesehatan. Employers may want to inform employees, considering that an additional deduction will be applied to their take home pay. The Tax Authorities have not issued a regulation indicating whether the healthcare insurance portion paid by the employer is tax deductible or if the employee portion is considered a deduction when calculating payroll Article 21 income tax payable for the employee.

• We are still waiting for regulations regarding implementation and expatriate participation. The previously issued Minister of Manpower and Transmigration Regulation No. PER.02/MEN/XII/ 2004 states that employers do not have an obligation to register expatriates in Jamsostek as long as the expatriates already have similar coverage in their home country. We are looking forward to hearing further clarification of whether any similar exemption will be available for the new program considering that Indonesia does not have a Totalization Agreement (International Social Security Agreement) with any other country.

Contact us:

KPMG Advisory Indonesia33rd Flor, Wisma GKBI 28, Jl. Jend. Sudirman T: +62 (0) 21 570 4888 F: +62 (0) 21 570 4888

Esther KwokPartner, International Executive Services (IES) E: Esther.Kwok@kpmg.co.id

kpmg.com/id

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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