In the Philippine labor landscape, the Philippine Health Insurance Corporation (PhilHealth) serves as the primary vehicle for universal health care. Under Republic Act No. 11223 (The Universal Health Care Act) and Republic Act No. 7875 (The National Health Insurance Act of 1995, as amended), the remittance of health insurance premiums is not merely a corporate HR function; it is a mandatory legal obligation.
When an employer fails to deduct or, more critically, fails to remit these contributions despite having deducted them from employees, they commit a violation that carries both civil liabilities and criminal penalties.
I. The Legal Mandate of Employers
Employers are considered "trustees" of the funds deducted from their employees' salaries. The law mandates two distinct actions:
- Deduction: The employer must withhold the employee’s share of the PhilHealth premium.
- Remittance: The employer must remit both the employee’s share and the employer’s counterpart contribution to PhilHealth within the prescribed period (usually the month following the applicable period).
Failure to do so constitutes a breach of the Social Security System of the Philippines' integrated social insurance philosophy, where health care access is tied to active membership and contribution history.
II. Administrative and Legal Remedies for Employees
If an employee discovers that their contributions are not being remitted—often realized only when a claim is denied at a hospital—the following remedies are available:
1. Demand Letter
The first step is usually a formal written demand to the employer. This creates a paper trail and gives the employer an opportunity to rectify "clerical errors" or "oversights." The letter should demand the immediate remittance of all arrears and the updating of the employee’s PhilHealth record.
2. Filing a Complaint with PhilHealth
Employees can report non-remitting employers to the PhilHealth Regional Office (PRO) or the Member Services Group. PhilHealth has the power to:
- Conduct inspections of the employer's books and payroll.
- Issue a Letter of Assessment for unpaid premiums.
- File criminal complaints through its legal department against the erring company officers.
3. Filing a Complaint with the Department of Labor and Employment (DOLE)
Non-remittance of statutory benefits is a labor standards violation. Under the Single Entry Approach (SEnA), an employee can initiate a Request for Assistance (RFA). If mediation fails, the case may be elevated to the Labor Arbiter of the National Labor Relations Commission (NLRC) as a money claim or as part of a constructive dismissal case if the violation is severe.
III. Penalties and Sanctions for Employers
The law is stringent regarding the non-remittance of premiums, specifically because these funds are considered "held in trust."
1. Criminal Liability (Estafa)
Under Section 38 of RA 7875, as amended, any employer who fails or refuses to deduct contributions from the employee's compensation and/or fails to remit the same to PhilHealth shall be penalized.
- Imprisonment: Generally ranging from six (6) months to twenty (20) years, depending on the gravity and the specific provision violated.
- Fines: Significant monetary penalties ranging from ₱50,000 to ₱100,000 per affected employee.
2. Liability of Corporate Officers
If the employer is a corporation, the penalty is imposed upon the officers responsible for the violation. This usually includes the President, Managing Director, or the HR/Finance Head. Unlike other corporate debts, they cannot always hide behind the "veil of corporate fiction" in criminal cases involving statutory contributions.
3. Interest and Surcharges
Employers are liable to pay the unremitted premiums plus a penalty of 3% per month from the date the contribution fell due until the date of actual payment.
IV. The "No Loss of Eligibility" Rule
Crucially, Section 15 of the Universal Health Care Act protects the member. It states that "failure of the employer to remit the required contribution and to properly inform the PhilHealth shall not cause the suspension of rights and/or entitlement of the direct contributor to benefits."
However, while the law says the member should still be covered, in practice, hospitals often require proof of contribution. In such cases, the employer is legally liable to reimburse the employee for any medical expenses that would have been covered by PhilHealth had the premiums been remitted.
V. Summary Table of Liabilities
| Type of Liability | Description |
|---|---|
| Civil | Payment of all arrears + 3% monthly interest. |
| Administrative | Fines per employee and potential business permit revocation. |
| Criminal | Imprisonment for responsible officers and hefty fines. |
| Damages | Reimbursement of the employee's hospital costs if the claim was denied. |
VI. Procedural Checklist for Affected Employees
- Verify: Secure a "Premium Contribution Statement" from a PhilHealth office or via the online Member Portal.
- Document: Keep payslips as proof that deductions were actually made from your salary.
- Report: Submit a formal complaint to the PhilHealth Legal Department or the nearest DOLE office.
- Litigate: If the employer remains defiant, engage counsel to file for Estafa or violations of the National Health Insurance Act.