11 Nov 2010 -- Overseas Filipino workers bound for Asian countries such as Hong Kong, Taiwan, Brunei, South Korea, Malaysia and Singapore will eventually shoulder the compulsory insurance premium despite government warnings against passing on the cost to OFWs.
"OFWs will eventually pay for the insurance just as they, in reality, pay for the placement costs ranging P50-150,000 – including plane tickets, Philippine Overseas Employment Administration (POEA) fees, Overseas Workers Welfare Administration Membership (OWWA) fee, visas, foreign brokers and local placement costs, among others," recruitment specialist and former OFW Lito Soriano said.
Soriano claimed that for over three decades, the practice is that OFWs in Asian countries shoulder all the expenses for their employment abroad, even if the Labor Department and related government agencies say otherwise.
"So, the US$72-100 per annum for the compulsory insurance mandated by the new Migrant Workers Act RA 10022, is just another cost on the shoulders of the OFW," he added.
He said, the Philippine Government must realize that policies regarding "zero" placement fees for various destinations abroad are not followed in Asian countries for the simple reason that 95 percent of employers in these countries, as well as their local recruitment brokers, are not regulated.
The policies the Philippine government has crafted would not be honored in most of these countries, he added.
Moreover, he said, the government has not initiated bilateral OFW protection agreements to require foreign employers in Asian countries to pay for the recruitment costs including the exorbitant foreign brokers fees that are usually the major component of the total placement cost.
Soriano lamented most OFWs and the general public are not aware of this reality in the recruitment process.
Compulsory insurance
The insurance premium must correspond to the length of the employment contract and must be paid – "at no cost to the worker" – prior to the release of their POEA overseas employment certificate. [See: Section 23 of RA 10022]
With most OFWs on two year contracts, the true upfront cost is between P6,500 to P8,800, Soriano said.
The POEA said insurance coverage requires employers or recruiters to secure a two-year policy coverage for OFWs amounting to a fixed rate of US$144, on top of the premiums. (See: DOLE warns recruiters vs passing on insurance costs to OFWs)
The policy includes benefits of $15,000 in case of accidental death; $10,000 in case of natural death; and $7,500 in case of permanent disablement, including repatriation costs, subsistence allowance benefit, money claims, compassionate visit, medical evacuation and medical repatriation.
A certificate of cover provided by an insurance company that is licensed and certified by the Insurance Commission is now required before the issuance of overseas employment certificate or exit clearance of agency-hired overseas workers.
A recent advisory from POEA said the accredited insurance providers are Paramount Life and General Insurance Corp., Philippine Charter Insurance Corp., and United Coconut Planters’ Life Assurance Corp.
On the other hand, Soriano added that, "already the coverage is going to be extended in new House Bill 3308 seeking to insure all OFWs as they renew their contracts."
Soriano wondered who is going to pay as OFWs who renew their contracts don’t go through recruitment agencies, but have to use POEA as their agency.
"So will the taxpayer pay the bill or will the government pass it on to OFWs?" he said.
The "no cost to OFW insurance premium" is not realistic, he stressed, adding that even under the POEA-brokered Employment Permit System (EPS) for South Korea, the Filipino worker had to pay dearly.
Citing experiences in the EPS, Soriano said OFWs under the program paid all the costs, including their OWWA membership, plane tickets to Korea, visa fees at the Korean Embassy, POEA fees, medical examinations and training expenses.
"The POEA is the exclusive recruitment agency under the EPS program, yet the OFW has to shoulder everything."
According to him, a Filipino worker deployed under the program has to pay P20,000 plus, with the additional costs of language tuition, review and the actual KLT (Korean Language Test) in order to qualify for EPS. And when they are on-site, they have to take out “Return and Casualty insurances" and pay for it through salary deductions at 8.3 percent monthly!
Canceled contracts
Meanwhile, Hong Kong residents have reportedly canceled contracts for Filipino domestic workers, after the Philippine government’s implementation of a mandatory insurance coverage for this type of workers.
Employers, recruiters and workers have scored the new policy, which took effect last Monday, describing it as as unfair and redundant because existing labor laws in Hong Kong already require employers to secure insurance policies for foreign domestic workers. [See story: Mandatory insurance imperils HK hiring of Pinoy helpers]
Reports by Hong Kong-based news sites The Standard and the South China Morning Post said a local organization claimed that over 100 residents have suspended hiring Filipino helpers due to the mandatory insurance. — Fernando de la Cruz/LBG, GMANews.TV
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