Key takeaways
- GHS is a yearly renewable group policy owned by the employer that pays hospital and surgical bills for illness or accident for full-time, actively-at-work staff, with spouse and children as an option.
- Minimum headcount depends on the insurer: Great Eastern's GREAT BizCare SME package lists 11 to 150 eligible employees, and its May 2025 disclosure sheet also describes underwriting for groups of 5 to 10.
- PERKESO covers work and commuting injuries (free treatment at panel clinics or government hospitals) and invalidity from any cause, but it does not pay private hospital bills for ordinary illness.
- New joiners usually wait 30 days for illness cover, and specified illnesses such as high blood pressure, diabetes, cysts, stones, hernias and knee or spine problems are excluded for the first 120 days.
- Companies usually deduct GHS premiums under section 33(1) of the Income Tax Act 1967; premiums carry 8% SST and RM10 stamp duty, and medical treatment benefits are not taxable on staff under section 13(1)(b)(i).
- Budget 2027 will subsidise RM200 of the first-year MediAsas premium per employee for SMEs with fewer than 75 staff, capped at 50 employees per company, from January 2027.
What is GHS insurance, and how does a group medical plan work?
GHS stands for group hospitalisation and surgical insurance. It is the "company medical card" many people in Malaysia get with their job. The company owns the policy and pays the premium, and each covered employee is a member. On its employee benefits page, Great Eastern Life says its hospitalisation and surgical plan "pays the hospital and doctors for medical treatment where a patient is hospitalised, for illness or accident", and it defines hospitalisation as being confined in hospital for at least 12 hours.
In practice, a group medical plan works like this:
- The company picks a plan for each job grade. Plans differ mainly in the daily room and board limit and the overall annual limit. Great Eastern's SME page says the plan chosen must be consistent with the job category.
- Staff use a corporate medical card. At a panel hospital the insurer issues a guarantee letter (GL), so the employee does not pay the covered bill upfront. Great Eastern Life's group GHS disclosure sheet lists both a cashless basis with a letter of guarantee and a pay and claim basis.
- The premium is charged per member per year, by plan and by who is covered: employee only, employee and spouse, employee and children, or the whole family.
- The policy renews every year. The premium is not guaranteed: the insurer reviews it at renewal based on claims experience, medical costs and other factors, and the company can only change benefits on the policy anniversary.
| Term in the policy | What it means for you |
|---|---|
| Policyholder | The employer. It declares the staff, their ages and job types, and pays the premium. |
| Life assured (member) | Each covered employee, plus spouse and children if the company extends cover to them. |
| Room and board | The daily room limit, for example RM150 to RM400 a night in Great Eastern's SME plans. |
| Overall annual limit | The most the plan pays for one person in a policy year. |
| As charged | Paid in full, as long as the charges are reasonable and customary and within the overall limit. |
| Period of insurance | One year from the start date or the policy anniversary. |
What does a group hospital and surgical plan cover, and what is excluded?
The core of GHS is the hospital bill. Below is the schedule from Great Eastern Life's GREAT BizCare GHS disclosure sheet for SMEs (version 05-2025), as an example of how limits step up by plan. Your own schedule may differ.
| Benefit (GREAT BizCare GHS) | Plan 1 | Plan 3 | Plan 5 |
|---|---|---|---|
| Hospital room and board per day (up to 180 days) | RM400 | RM250 | RM150 |
| Intensive care (up to 30 days), hospital supplies, surgical, anaesthetist and operating theatre fees, doctor's visits in hospital | As charged | As charged | As charged |
| Daily cash allowance in a Malaysian government hospital | RM100 | RM100 | RM60 |
| Tests and specialist visits 60 days before admission, treatment 60 days after discharge | As charged | As charged | As charged |
| Outpatient cancer treatment and kidney dialysis | As charged | As charged | As charged |
| Outpatient physiotherapy, per year | RM5,000 | RM5,000 | RM5,000 |
| Overall annual limit | RM150,000 | RM50,000 | RM30,000 |
Plans 2 and 4 sit in between (RM300 and RM200 rooms, RM60,000 and RM40,000 a year). Great Eastern's tailor-made GHS for larger companies covers 90 days before and after a hospital stay, with 180 days as an option, and adds riders on request: outpatient GP care at panel clinics, specialist care on referral from a panel GP, dental, maternity, and options such as inpatient mental illness cover.
What a group medical plan usually does not pay for
- Pregnancy, childbirth, miscarriage and infertility treatment, unless the company adds a maternity rider. Great Eastern's template rider shows an overall limit per delivery (RM4,000 in the sample) for women aged 17 to 45.
- Dental treatment, except after an accident to sound natural teeth, unless there is a dental rider.
- Congenital and hereditary conditions, cosmetic surgery, eye tests, glasses and Lasik.
- Admissions only for check-ups, investigation or diagnosis, and treatment that is not medically necessary.
- Mental and nervous disorders in the base plan, and alternative therapy such as acupuncture, bonesetting, chiropractic and herbal treatment.
- Amounts payable by other insurance, and work injuries covered under a workmen's compensation insurance contract.
The rules for new joiners
| Rule | What it means |
|---|---|
| 30-day waiting period | Illness cover starts 30 days after the member's effective date; injuries are not subject to it. A break in cover starts the 30 days again. |
| 120-day specified illnesses | Not covered in the first 120 days: high blood pressure, diabetes and heart disease; tumours, cancers, cysts, nodules and polyps; urinary and gall stones; ear, nose and throat conditions; hernias, haemorrhoids, fistulae, hydrocele and varicocele; reproductive system diseases including endometriosis; spine (including disc) and knee conditions. |
| Pre-existing conditions | In the group GHS sheet, a condition that began before the member's cover started is excluded until the member has been insured under the policy for 12 months, with further conditions in the wording. |
| Taking a higher room | In the group GHS sheet, a member who stays in a room above their limit pays 20% of the other eligible benefits. The GREAT BizCare sheet says co-insurance does not apply. |
Both disclosure sheets apply these rules to "new joiners", so ask the insurer in writing how they apply to staff already working for you when the company plan starts.
How many employees do I need for a group medical plan?
There is no single legal minimum. Each insurer sets its own, and the group size changes how the plan is underwritten. This is what Great Eastern Life publishes:
| Point | GREAT BizCare (SME package) | Tailor-made group plan |
|---|---|---|
| Group size | 11 to 150 eligible employees on the product page; the GHS disclosure sheet also describes underwriting for groups of 5 to 10 | Not stated; quoted for each company |
| Health questions | The page says no evidence of health is required, subject to the policy terms and exclusions | Staff must declare medical conditions truthfully where asked |
| Who can join | Full-time, actively-at-work employees aged 17 to 64 next birthday; legally married spouse; unmarried children from 14 days old | Full-time, actively-at-work employees aged 17 to 65 next birthday; legally married spouse; unmarried children from 15 days old |
| Cover only some staff? | Yes, by staff category, as long as the minimum number is met | Plans set by job category |
| Notice of a premium change | At least 90 days before the policy expires | At least 30 days' written notice |
The GREAT BizCare sheet adds that its premium rates assume the target group size, and the quoted rate can change if that size is not reached when the policy starts. Three practical points for small companies:
- "Actively at work" matters. These plans are for full-time employees who are at work, so ask how part-timers, contract staff and anyone on long medical leave are treated.
- Very small teams. Great Eastern's published group terms start at 5 to 10 employees, so a team of 3 usually looks at personal medical cards for each person instead.
- Foreign workers usually sit in a separate scheme. Great Eastern General's Foreign Worker Hospitalisation and Surgical Scheme is built around third-class rooms in government hospitals, with an RM20,000 overall annual limit per worker.
Budget 2027: a MediAsas subsidy for small employers
In the Budget 2027 speech (paragraph 86), the Government said MediAsas will launch in January 2027 and that, for SMEs with fewer than 75 employees, it will subsidise the first-year premium by RM200 per employee, capped at 50 employees per company. It expects this to reach up to 200,000 workers. The Star reported that MediAsas will be standalone medical insurance and takaful for individuals, with two options, MediAsas Teras and MediAsas Fleksi, open up to age 85. So it is a basic personal plan for each worker, not a company GHS, and the speech does not say how employers will apply. My MediAsas guide explains how it compares with a regular medical card.
What does SOCSO already cover for my staff, and what does it not?
PERKESO is compulsory: the Employees' Social Security Act 1969 applies to all industries with one or more employees, and those employers must register and contribute. But it was built for work injuries and lost earning power, not for private hospital bills.
| Situation | PERKESO (SOCSO) | GHS |
|---|---|---|
| Injury at work, on the way to or from work, during an emergency at the premises, or an occupational disease | Employment Injury Scheme: free treatment at PERKESO panel clinics or government clinics and hospitals until recovered (a second-class ward in a government hospital for serious injuries), plus temporary disablement benefit at 80% of the average assumed daily wage, RM30 to RM158.67 a day, when the MC is at least 4 days | Depends on the wording; the group GHS sheet excludes amounts payable by other insurance and work injuries covered under a workmen's compensation contract |
| Dengue, appendicitis, gallstones or a slipped disc treated in a private hospital | Not covered | Covered within the plan limits, after the new-joiner rules |
| Unable to work for good after a stroke or cancer | Invalidity Scheme: 24-hour cover for invalidity or death from any cause not related to work; a pension of 50% to 65% of the average assumed monthly wage, at least RM550 a month, if the contribution conditions are met | Pays the hospital bills only, not income |
Two more points owners often miss:
- The law already puts the sick-leave doctor visit on you. Under section 60F of the Employment Act 1955, paid sick leave follows an examination "at the expense of the employer" by a doctor the employer appoints, or by another registered doctor when that one cannot be reached within a reasonable time or distance. This is why many companies add a panel GP rider to their GHS.
- GHS pays the bill, not the salary. The same section gives paid sick leave of 14, 18 or 22 days a year depending on length of service, or 60 days in the aggregate a year when hospitalisation is necessary, at the ordinary rate of pay. No paid sick leave is due for days when the employee receives PERKESO temporary disablement payments.
My PERKESO (SOCSO) guide covers contributions and claims in detail, and my group personal accident guide covers lump sums for accidents, which GHS does not pay.
How is group medical insurance taxed for the company and the staff?
This is general information, not tax advice; confirm your own case with your tax agent.
| Question | What the law or LHDN says |
|---|---|
| Can the company deduct the premium? | Section 33(1) of the Income Tax Act 1967 allows a deduction for outgoings and expenses "wholly and exclusively incurred" in producing gross income. Medical cover for the staff who earn that income is a staff cost, which is why companies usually claim it here. |
| Is there tax on the premium itself? | Great Eastern's GHS disclosure sheets add 8% Sales and Service Tax and RM10 stamp duty, and note that premiums paid by business organisations are subject to the applicable tax. |
| Is the medical treatment taxable for the employee? | No. Section 13(1)(b)(i) excludes a benefit consisting of medical or dental treatment, and LHDN Public Ruling 11/2019 (paragraph 8.2.11) lists medical treatment, including traditional medicine and maternity, as exempt. |
| What about the premium the company pays for each person? | Public Ruling 5/2019 (paragraph 6.8.1) treats an annual premium the employer pays, where the employee or family is the beneficiary, as a perquisite. Paragraph 6.8.2 exempts group insurance for injury or accident and contributions to a health care management organisation for medical costs. Group hospital and surgical premiums are not named, so ask your tax agent how to show them on Form EA. |
| Can staff claim it in their own tax relief? | The medical insurance relief in section 49(1B) is for premiums the individual "has paid", so a company-paid GHS premium is not part of the employee's own relief. |
One more cost point: Great Eastern's sheets let the company cancel with 30 days' written notice only if no claim was made in that policy year, and the refund falls on a sliding scale, for example 30% of the annual premium if the policy has run no more than 6 months and nothing after 11 months. A group plan is a yearly commitment.
What should I ask before buying a group medical plan for my staff?
- Who is in and who is out? Full-time staff only, or also part-timers, contract staff, staff above 64 or 65, foreign workers, spouses and children?
- Which hospitals will your staff use? Is the hospital near your factory or office a panel hospital that accepts the corporate medical card and GL, and does the room limit match its room rates?
- Is the overall limit per year or per disability, and is it enough for a cancer or heart case at a private hospital?
- How do the new-joiner rules apply (30 days, 120 days, pre-existing conditions), and do they also apply to staff already employed when the plan starts?
- Which exclusions matter for your team, such as maternity, dental, mental health and work injuries, and which riders can buy them back?
- Do you need outpatient cover? A panel GP rider usually makes sense, because the sick-leave examination is already your cost under the Employment Act.
- How much notice of a premium change will you get? 30 days in the group GHS sheet, 90 days before expiry in the GREAT BizCare sheet; Great Eastern invites renewal at least 30 days before expiry.
- Who handles claims? Great Eastern's sheets ask for claim notification within 30 days of the event. Decide who in HR does it, and show staff the Great Eastern Corporate app, where they can find their medical card and panel clinics and submit claims.
- Have you declared everything correctly? The sheets warn that the type of business, job types and ages must be stated correctly, or cover can be void from the start.
Worked example: a 20-person factory in Puchong
Assumptions, for illustration only: the factory buys an SME GHS plan with three grades, using the limits in Great Eastern's GREAT BizCare disclosure sheet: Plan 1 for 2 managers, Plan 3 for 4 office staff and Plan 5 for 14 production workers. Everyone is full-time and at work. Real outcomes depend on the policy wording and the actual bill.
| Situation | What happens |
|---|---|
| An office clerk (Plan 3, on the plan for 2 years) stays 3 nights for dengue in a private hospital whose room costs RM300 a night | GHS pays room and board up to RM250 a night and other eligible charges as charged, within RM50,000 a year. The RM50 a night above her limit, RM150 for 3 nights, is hers to pay. |
| A machine operator (Plan 5) who joined 2 months ago needs gallstone surgery | Gall stones are a specified illness excluded in the first 120 days, so GHS does not pay. PERKESO does not either, because it is not work-related. |
| A worker's hand is injured by a press on the factory floor | PERKESO's Employment Injury Scheme gives free treatment at a panel clinic or government hospital, and temporary disablement benefit if his MC is 4 days or more. Check how your GHS treats work injuries before relying on it. |
| A manager's wife, covered as a spouse, gives birth | Childbirth is excluded unless the company added a maternity rider, and then only up to the rider's limit per delivery. |
How can I get help choosing a plan for my company?
I look after business owners and their families in Kuala Lumpur and Selangor, including Seri Kembangan, Serdang, Puchong, Cheras, Bukit Jalil and Klang, in Mandarin, English or Cantonese. WhatsApp me your headcount, rough ages, the kind of work your staff do, who you want to cover (staff only or families), the hospitals near you, and your current plan with its renewal notice if you have one. I will:
- check what Great Eastern offers for your headcount, from the GREAT BizCare SME package to a tailor-made group plan;
- set plans by grade so the room limits match the hospitals your staff actually use;
- explain the waiting periods and exclusions to you and your HR before the first claim, not after;
- compare a group plan with personal medical cards or MediAsas when the team is very small;
- help with claims and renewals when they come.
No hard selling. If PERKESO and what you already have are enough for now, I will tell you so. Please do not send IC numbers or staff medical records in the first message. For the other covers a business needs, see business insurance for SMEs, factories and shops.
This guide is general information, not tax or legal advice. Cover always depends on your own policy wording.