Most residents in Israel must remit contributions to the National Health Insurance (NHI) for coverage under one of four health funds with a standardized basket of medical services, including hospitalization, pharmaceuticals, generalist and specialist medical care, as well as laboratory services. A majority of employees supplement the national basic medical cover with Private Medical Insurance (PMI), which is intended to provide prompt access to treatment and cover medical conditions that are not included in the standard basket of medical services administered by the health funds.
The reform aims to help consumers find optimal health coverage by simplifying the process of understanding and comparing various PMI products and costs.
The new legislation applies to all individual PMI policies that are concluded on or after 1 February 2023, and to all group PMI policies that are concluded or renewed on or after 1 February 2023.
The new legislation enables insurance companies to offer PMI only according to the following five distinct tiers:
- Tier 1 – Insurance companies are required to offer their new clients a basic PMI package comprised of three uniform policies: (1) transplants and special treatments abroad, (2) pharmaceuticals not included under the NHI requirements, and (3) surgical procedures and non-surgical alternative treatments abroad.
- Tier 2 comprises a uniform three surgical options within Israel.
- Tier 3 comprises an extension policy that would include additions to the first, second or fifth tiers.
- Tier 4 comprises ambulatory insurance which may include consultation, medical diagnosis, and examinations; home hospitalization; treatments with advanced technologies and medical devices; medical accompaniment and treatments following a significant medical event such as surgery, hospitalization, or serious illness; any insurance appendix approved by the Commissioner in advance and in writing.
- Tier 5 comprises a serious illness insurance plan.
Insurance companies would be allowed to sell additional PMI coverages only after that initial basic PMI (the first tier) has been purchased by the client, from the same company or another company. In addition, discounts on the premiums may be given by insurance companies to the insured. Should a discount be given, it must be at a fixed rate for a period of at least ten years.
Employers should review the new changes and ensure compliance with the timeline. Employers may want to amend their human resource policies and practices, employment agreements, and health insurance-related benefits and policies as needed.
In collaboration with Lockton Global Partner: