Rehired and direct hire OFWs need not pay compulsory insurance

Following instructions from Migrant Workers Secretary Susan “Toots” V. Ople, the Philippine Overseas Employment Administration (POEA) has suspended the implementation of the Expanded Compulsory Insurance Coverage for land-based “rehires” and “direct hires” mandated in a department order issued in October 2021.

In ordering the suspension, the POEA cited in an advisory dated 05 August 2022, the improving global health situation and high vaccination rates among overseas Filipino workers (OFWs).

The Expanded Compulsory Insurance Coverage for returning OFWs and direct hires was the subject of Department Order No. 228, Series of 2021 issued by the Department of Labor and Employment (DOLE). Undersecretary Bernard Olalia, concurrently the Officer-in-Charge of the POEA, said that the department order was a “protective insurance mechanism against OFWs contracting COVID-19.”

“The suspension will save our ‘balik-manggagawa’ workers and those directly hired by foreign employers at least $35 (P1,700.00) worth of mandatory insurance coverage, while reducing the number of requirements imposed by government. Malaking ginhawa ito para sa ating OFWs,”
– Ople said.

Ople said that she has received feedback from OFWs who were confused if they should continue to pay for the expanded compulsory insurance even when the country remains under Alert Level 1 and other countries have reported lower COVID-19 infections and have begun to loosen travel restrictions.

The DMW Secretary, however, clarified that the mandatory insurance coverage for newly hired OFWs remains valid and in place because this was set by law.

“Para malinaw, may dalawang uri ng compulsory insurance. Yung para sa mga bagong OFW na bunga ng naipasang batas, at itong expanded compulsory insurance para sa mga balik-manggagawa at direct hires na nakasaad sa isang lumang department order ng DOLE. Yung itinatakda ng batas ay ating patuloy na ipatutupad dahil ito naman ay sagot ng mga foreign employers,”
– Ople said.

“Ngunit yung expanded na version na itinatakda ng Department Order 228 para sa mga balik-manggagawa at direct hires ay isasantabi muna natin dahil sa kakulangan ng konsultasyon sa mga stakeholders,” Ople explained.

Among other provisions, the Department Order requires employers or the workers themselves to pay for the insurance coverage subject to full refund on the first day of arrival at the worksite or country of destination.

Ople noted that the benefits of such an insurance scheme for rehired and directly hired overseas workers at the height of the COVID-19 epidemic have yet to be established.

“The order to suspend will be followed by a series of formal consultations with all stakeholders most especially our OFWs in different parts of the world via online meetings since they were meant to be the primary beneficiaries of DO No. 228,” Ople said.

She said the consultations will also enable the DMW to report on the progress of other programs and services, including ongoing efforts to cut red tape and carry out the digitalization of the overseas employment certificate (OEC).

“We will continue to reach out to our stakeholders so that our goal to make the DMW the home and sanctuary of every OFW is attainable,” Ople said.

Suspension of the Implementation of the Expanded Compulsory Insurance Coverage

The issuance of Department Order (DO) No. 228, Series of 2021 expanded the compulsory insurance coverage of migrant workers, to include rehires and direct hires.

In the said DO, “this interim rule shall be implemented only during the period of the current public health emergency being faced by all countries due to the raging Covid-19 pandemic and the threats of other emerging infectious diseases as well as the period of full completion and implementation of the national government’s vaccination program for all Filipino Citizens.”

Considering the improving state of global health, and consequently the opening of borders, as well as the high vaccine rollout, this rule on expanded insurance coverage needs to be revisited.

In this regard, the implementation of the expanded compulsory insurance coverage shall be temporarily suspended pending the consultations and dialogue among the recruitment industry stakeholders, and submission of an offer from the insurance providers, for the improved package of services, beneficial to the needs of the OFWs.

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