Group Health Insurance for Startups and SMEs in Singapore

For many startups and small to medium-sized enterprises (SMEs), group medical insurance may seem like an additional cost, but it plays an important role in maintaining workforce health and operational continuity.

When employees experience illness or hospitalisation without structured coverage, companies may face challenges such as longer absences, the need for temporary staff, or reduced productivity during recovery periods. These issues can disrupt day-to-day operations and overall efficiency.

A group medical plan helps by providing timely access to care and consistent claim management, supporting faster recovery and allowing businesses to manage health-related absences more predictably.

At the same time, employee expectations have shifted. According to an SME employee benefits survey conducted in 2022, nine in ten SME staff say they want health coverage, and 60% are more willing to join a company that offers it. In today’s market, medical insurance is no longer a perk but a baseline requirement. This guide explains what SMEs need to know to choose the right coverage at the right cost.

SME Realities and Why Insurance Matters

Unlike large corporations, startups and small to medium-sized enterprises (SMEs) operate with lean teams, tighter budgets, and limited HR support. Every dollar counts, and benefits often compete with other pressing needs. As a result, many SME owners postpone medical insurance, but delaying creates risks on two fronts:

• Financial risk: When an employee is hospitalised, SMEs may face indirect costs such as productivity loss, temporary staffing needs, or project delays. Group medical insurance helps manage these risks by ensuring employees have quicker access to care and predictable medical coverage, reducing downtime and allowing businesses to plan healthcare expenses more effectively. 
• Talent risk: Without structured benefits, SMEs struggle to attract and retain staff in a market where health coverage is now expected. 

Group health insurance directly addresses both. By pooling risk, it helps keep premiums manageable while giving employees the security they expect.

Key Challenges Facing SME Owners and Founders

Running a small business in Singapore means striking a balance between short-term costs and long-term investments in people. Four hurdles stand out:

1. Cost pressures

• Healthcare costs continue to rise, adding to manpower and rental expenses. 
• For SMEs on thin margin, medical benefits can feel out of reach.

2. Talent competition

• Larger firms can offer higher pay and more extensive benefits.
• Competing on salary alone is no longer enough.
• Randstad’s 2025 Employer Brand Research reveals that salary and benefits rank second only to work-life balance as motivators for employees.
• Offering group medical insurance signals credibility and helps SMEs stand out in a crowded talent market.

3. Generational expectations

• Younger employees value stability, well-being, and benefits.
• Prudential’s SME survey found that 60% of staff are more willing to join a company that provides medical benefits.
• Providing insurance is one of the most practical ways for SMEs to stay attractive to emerging talent.

4. Scalability

• SMEs need solutions that grow with them.
• Committing too early to expensive, all-inclusive policies can strain cash flow.
• Modular plans allow businesses to start small and expand coverage as the team grows, keeping benefits sustainable.

Why Employers Should Care About Group Health Insurance

SME owners often see health insurance as just another expense, but in reality, it’s a strategic investment that strengthens recruitment, productivity, and employer credibility.

1. Attract and retain talent

• Benefits are no longer optional. Randstad’s 2025 Employer Brand Research shows that salary and benefits rank second only to work-life balance as motivators for employees.
• Group health insurance signals stability, enhances employer branding, and reassures staff that their wellbeing matters — helping SMEs reduce turnover and build loyalty.

2. Support wellbeing and productivity

• Access to healthcare encourages early treatment, reduces absenteeism, and helps staff manage conditions effectively.
   
• Studies consistently link employee well-being with higher engagement, stronger commitment, and improved workplace stability.
   
• For SMEs, where every role is critical, this translates into steadier productivity and fewer hidden costs from lost output.

3. Tax Considerations

• Singapore’s tax framework provides partial relief for medical expenses.
   
• According to IRAS, premiums for medical and group medical insurance are deductible as business expenses, capped at 1% of total employee remuneration.
   
• The cap increases to 2% if the company adopts approved portable medical benefit schemes such as PMBS or TMIS.
   
• This helps offset part of the financial outlay, making it easier for SMEs to balance protection with affordability.

4. Build credibility and brand

• Offering health benefits demonstrates professionalism and long-term commitment to staff.
   
• For startups and family-run businesses, structured coverage shows the company is serious about supporting employees, which builds trust and strengthens competitiveness in the talent market.
   
• Group insurance works as both a safeguard and a branding tool, reinforcing loyalty and employer reputation.

Why Employees Value Group Health Insurance

To understand the impact of group health insurance, it helps to view it from the employee’s perspective. For today’s workforce, medical coverage is no longer a perk — it is a baseline expectation and a key factor in whether a job feels attractive and sustainable.

1. Part of the total rewards package

Employees now assess opportunities based on the overall package, not salary alone. Health insurance consistently ranks among the most valued elements because it reduces personal financial risk, covers costs that would otherwise fall on staff or their families, and ensures faster access to care. Importantly, structured coverage signals stability and care, which fosters trust, strengthens loyalty, and helps reduce costly turnover. For SMEs, this creates a levelling effect — even smaller firms can compete more effectively against larger employers by offering meaningful benefits.

2. Supplementing personal insurance

Even when employees already have private health plans, group coverage adds an extra layer of protection. For younger staff, it is often their first experience with structured benefits. For foreign employees, it can help bridge gaps not covered by their home country or individual plans, offering reassurance while living and working in Singapore.

3. Meeting generational expectations

Millennials and Gen Z now make up a growing share of Singapore’s workforce. They place a higher value on well-being, structured benefits, and stability than earlier generations. For SMEs, offering group health insurance is one of the most practical ways to meet these expectations and remain competitive in attracting younger talent.

Debunking Common Misconceptions About Group Health Insurance

For many SME owners, hesitation about group health insurance often stems from persistent myths. These misconceptions make coverage feel out of reach — when in fact, the opposite is true. Here are the most common barriers, and why they don't hold up:

1. “It’s Not Available for Small Teams”

Reality: Even micro-businesses qualify. In Singapore, group health insurance can start with as few as two full-time employees. Startups don't need to wait until they have grown larger to offer structured benefits. 

With solutions like EZCare, SMEs can set up affordable group health coverage early, choosing plans that scale as their workforce expands. This allows founders to build a strong employee benefits foundation from the start, without heavy administrative requirements or large-team prerequisites.

2. “It’s Too Costly — Our Business Can’t Afford It”

Reality: Plans can be tailored to suit your budget. By pooling risk across employees, premiums per person are often lower than if each staff member were to buy their own plan. Many SME-focused products also allow businesses to start with core hospitalisation and surgical cover, then gradually add outpatient or dental benefits as their budget and team size increase.

3. “Employees don’t really care about medical insurance — they may already have their own”

Reality: In practice, medical coverage is one of the first benefits employees look for when evaluating job offers. While some employees may already have personal insurance, younger staff often do not — for them, employer-provided group insurance may be their first exposure to private health coverage beyond national schemes like Medishield Life. For foreign staff, it helps to fill gaps not covered by natiaonal schemes such as Medishield Life. 

Across the market, medical benefits are recognised as both a sign of employer stability and a mark of progressiveness. Offering structured health coverage shows that a company can manage its budget responsibly, has the systems to support employee benefits, and is committed to keeping staff protected over the long term. These are practical signs of financial stability and organisational maturity.

The takeaway: Group health insurance is accessible, cost-effective, and valued by employees. By clearing away these myths, SMEs can see it for what it really is — not a financial burden, but a practical way to protect staff and strengthen the business.  

How to Get Started with Group Health Insurance in Singapore

Taking the first step towards providing health coverage can feel complex, but the process becomes manageable with a structured approach. SMEs can design a plan that fits their team's needs without overshooting their budget.

1. Assess Your Needs

Start by reviewing your company profile, including size, budget, employee demographics, and whether staff have dependents.

• Example: Younger teams may prioritise core hospitalisation and surgical cover. Workforces with families or older employees may look at broader coverage from the outset, such as outpatient or specialist riders.

2. Compare Plans and Providers

Not all policies are structured the same. When reviewing options, consider:

• Coverage scope (inpatient hospitalisation, outpatient riders, dental, accident cover)
• Exclusions (e.g. pre-existing conditions, permanent exclusions for very small groups)
• Premium costs and budget fit
• Claims process (ease of reimbursement or cashless treatment)
• Provider network (panel clinics, hospitals, teleconsultation options)

3. Plan for Scalability

Avoid overcommitting upfront. Start with core coverage and expand as your workforce and budget grow. Modular plans allow you to:

• Add outpatient, dental, or wellness riders later
• Scale benefit tiers as the company matures
• Keep costs sustainable while protecting staff

By pooling risk across the group, SMEs can also secure more predictable premiums per employee than buying individual policies.

4. Seek Guidance if Needed

If the process feels overwhelming, insurers, brokers, or digital platforms can provide side-by-side comparisons, explain requirements, and manage administration. Plans like EZCare offer digital claims, cashless GP panels, and teleconsultation, making it easier for SMEs to provide coverage without heavy HR overhead.

Bottom line: SMEs don’t need a large workforce or corporate-scale budgets to start offering group health insurance. Beginning with core coverage and scaling gradually makes it a practical way to protect employees while supporting business growth.

EZCare as a Solution for Startups and SMEs

For many startups and SMEs, the challenge lies in finding a health insurance plan that fits limited budgets, lean teams, and future growth. EZCare is designed with these needs in mind.

Designed for SME Needs

Positioned as “the employee benefits starter kit for SMEs,” EZCare allows smaller businesses to start offering health coverage without a large upfront commitment.

Addressing Pain Points

EZCare is structured to reduce the typical barriers SMEs face:

• Accessible for small teams — available from just two full-time employees.
• Modular design — start with essential hospitalisation and surgical cover, with the option to add riders for outpatient GP, specialist, dental, or personal accident benefits as the workforce and budget grow.
• Simple to administer — digital tools, such as mobile claims, cashless GP/TCM panels, and teleconsultation, make it easy for both employers and employees to use.

Balancing Employer and Employee Needs

EZCare covers core medical risks like hospitalisation and emergency accident-related treatment, giving employees meaningful protection. Employers can then expand coverage gradually with add-ons as the company grows. This provides stability for staff while allowing businesses to manage costs in a predictable way.

Note: As with all group plans, certain exclusions apply, such as pre-existing conditions and chronic illnesses for very small groups. SMEs should review policy terms before enrolling.

In short, EZCare makes group health insurance accessible to smaller businesses — combining essential coverage with flexibility and straightforward administration.

Conclusion

For startups and SMEs in Singapore, group health insurance has become more than an employee perk — it is a practical tool for protecting staff, competing for talent, and building a stable foundation for growth. Structured benefits help manage costs, improve retention, and strengthen employer credibility in a competitive market.

EZCare is built with SMEs in mind. With entry from just two employees, scalable options, and digital-first administration, it removes many of the barriers that stop smaller firms from getting started. SMEs can begin with essential coverage and expand over time, ensuring protection without overcommitting on cost.

The takeaway is simple: supporting employee health also supports business resilience. With flexible solutions like EzCare available, SMEs no longer need to wait until they are “big enough” to provide meaningful benefits. The best time to start is now — with a plan that grows alongside the business.

Learn more about EZCare today 

 

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