Why WP/S-Pass Holders Might Have Better Insurance Than Your Local Staff

❓"How is it that our foreign workers have better insurance protection than our local staff?"

That was the honest reaction from an HR manager I once worked with. Her team had just completed a compliance audit—and realised their Work Permit and S Pass holders had better protection than some of their junior executives.

It’s a moment that challenges assumptions. And one that reveals the often-overlooked gaps in how companies approach employee benefits.

Let’s unpack why this happens—and what employers can do to fix it with intention.

The Legal Minimums: A Safety Net You Can’t Skip

For Work Permit (WP) holders, employers are required by law to purchase Work Injury Compensation (WIC)-compliant insurance from a designated insurer. This ensures financial protection in the event of work-related injuries or illnesses.

For S Pass holders, WIC insurance is only mandatory if they are manual workers or non-manual workers earning SGD 2,600/month or less. While not always required, employers remain liable under the Work Injury Compensation Act (WICA) regardless of whether a policy is in place.

• Medical Insurance — with minimum inpatient and day surgery coverage of SGD 60,000/year per worker

• Full payment of premiums by the employer (employee co-payment is not allowed)

The Ministry of Manpower enforces this strictly. Failure to comply can lead to fines, revocation of work passes, or even blacklisting.

Because of this, these workers benefit from a baseline level of protection that is clearly defined, consistently enforced, and subject to regular audit checks by MOM.

Compare that to local employees:

• Medical benefits can vary widely between companies

• Group insurance may or may not be provided

• Co-payments and exclusions are common

In short: foreign workers’ coverage is often more standardised and consistent.

So Why the Disparity?

It’s not just about regulation—it’s also about structure, assumptions, and inertia.

Singapore’s employment laws are designed to protect vulnerable foreign workers, who may not have the same bargaining power, local support systems, or knowledge of their rights. That’s why the government mandates a baseline level of coverage for them—and enforces it strictly.

But for local staff, the same safeguards don’t exist. And that opens the door to other drivers of disparity:

• Organisational inertia: Many companies set their group insurance plans years ago and haven’t reviewed them since. Outdated coverage lingers by default.

• Assumptions about CPF and Medishield: Employers may assume that CPF, MediShield Life, and other national schemes provide sufficient protection for local employees—without fully understanding the coverage limits or employee expectations.

• Budget prioritisation: In lean times, benefit enhancements often go to senior staff first—while essential baseline protections for rank-and-file employees are overlooked.

This patchwork approach leads to inequality—not just in coverage, but in perceived care.

What Employers Can Learn

Instead of asking, "Why do WP holders get better insurance?"—a more useful question might be:

"What would it look like if we offered every employee a baseline of care and protection—regardless of pass type, title or pay grade?"

Companies that align their benefits strategy with principles of equity and wellbeing often see:

• Better talent retention

• Higher morale and engagement

• Stronger employer branding

• Fewer gaps in risk protection

It doesn’t mean everyone gets the same coverage. But it does mean every worker knows they matter.

A Real-World Example

At a mid-sized manufacturing firm I worked with, the HR director flagged something curious during a consultation: their foreign production workers were fully covered under WICA and mandatory medical insurance, while their local technicians had only partial outpatient coverage and no term life protection.

I worked closely with the HR team to map out their workforce demographics, claims patterns, and risk exposure by employee category. Together, we presented our findings to the leadership team—highlighting the inconsistency in protection and the potential impact on morale and employer reputation.

Then we rebuilt their group insurance strategy with three goals:

1. Ensure every employee had fair baseline protection,

2. Communicate benefits clearly and inclusively,

3. Introduce tiered options, such as voluntary top-ups for all staff levels, while reinforcing that everyone receives a fair baseline of core protection.

When a WP holder’s workplace injury claim was quickly approved and fully paid—but a local team member had to pay out-of-pocket for illness-related costs just weeks later—that comparison drove home the urgency.

By engaging early, we avoided a reactive benefits overhaul. Instead, the leadership was able to make deliberate improvements. They saw improved morale, stronger retention among local staff, and better confidence among managers that their people were protected.

That’s the value of working with a benefits advisor who understands both the insurance landscape and the HR challenges on the ground.

Final Takeaway

When protection is required, it happens. When it’s optional, culture decides.

Foreign worker coverage is regulated, so it happens by default. But for everyone else—especially local staff—coverage is often patchy, outdated, or missing entirely.

✅ As an advisor, I’ve seen companies turn that around. Not with extravagant budgets, but with clarity, fairness, and alignment between what they say they value—and what they actually offer.

📩 Ready to find those gaps—and close them with intention? Contact Jacky to start your benefits audit today.

Because when it comes to protection, nobody should be an afterthought.