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I. LEGAL BASES AND RATIONALE

Section 16 (Rates of Premium Contributions) of the Revised IRR of the National Health Insurance Act of 2013 specifically states that “members in the formal economy shall continue paying the monthly contributions to be shared equally by the employer and employee at a prescribed rate set by the Corporation not exceeding five percent (5%) of their respective monthly basic salaries.” Salary is defined  in Section  3(fff) of the same IRR as “the basic monthly  compensation paid regularly for services rendered.”

For  purposes  of  further  clarifying  how  premiums  are  computed  for  members under the formal economy, the monthly basic salary is hereby defined based on the following guidelines.

II.    COVERAGE

This Circular covers all employed members in the Formal Economy and all employers in the government and private sectors.

III.   GUIDELINES

The term Monthly Basic Salary (MBS) shall be understood to mean as the fixed basic rate of an employee  which shall not include  sales commission,  overtime pay,  allowances,  thirteenth  month  pay,  bonuses  or  other  gratuity  payments. Further to this, those deductions to the employee’s pay occasioned by his/her undertime,  tardiness,  leave(s)  without  pay,  absences,  or  other  similar circumstances shall also be excluded in this computation.

For  the  monthly-paid  and  daily-paid  employees,  the  MBS  shall  be  computed based on the estimated Equivalent Monthly Rate (EMR) consistent with the 2010 Edition   of  the   Department   of  Labor   and   Employment-Bureau   of  Working

Condition’s Handbook on Worker’s Statutory Monetary Benefits wherein the MBS is clarified as follows:

A.   For daily-wage workers with a six-day work week schedule, who do not work and are not considered paid on Sundays or rest days shall be computed as follows:

MBS = Applicable Daily Rate x 313
                                  12

Where 313 days/year shall refer to: 299 ordinary working days

11 regular holidays
3 special holidays

B.   For daily-wage workers with a five-day work week schedule, who do not work and are not considered paid on Saturdays and Sundays or rest days shall be computed as:

MBS = Applicable Daily Rate x 261
                                12

Where 261 days/year shall refer to: 247 ordinary working days
11 regular holidays
3 special holidays

C.   Further, the daily rate for workers  paid by results, including  home workers and those who are paid on piece rate, takay, pakyaw,  or task basis, shall receive not less than the prescribed minimum wage rates under the Regional Wage Order for normal working hours which shall not exceed eight (8) hours a day, or a proportion thereof. The monthly rate for the same shall then be computed based on the five-day or six-day work schedule, depending on the schedule of operations of the business establishment.

D.   All   government   and   private   employers   are   required   to   register   their employees   and  their  qualified  dependents   by  submitting  a  list  of  their employees complete with their salary base and other documents as may be required. No exemptions will be granted as this is a mandatory disclosure demanded  from all government  and private  employers  to ensure  that they remit their employees' premiums in accordance with the prescribed rates.

E.   Relative to employees  with no earnings due to a lengthy leave without pay for more than six (6) months, provisions of PhilHealth Circular No. 32, s-2003 shall still be in effect.

III.   REPEALING CLAUSE

All  issuances  inconsistent  with  this  Circular  are  hereby  repealed  or  modified accordingly.

IV.  EFFECTIVITY CLAUSE

This Circular shall take effect after fifteen (15) days following its publication in a newspaper of general circulation and shall be deposited thereafter with the Office of National  Administrative  Register  (ONAR)  of the University  of the Philippines Law Center.