Legal basis and operating principle
- Section 18(d) of the RIRR provides that an employer’s failure to remit the required contribution and to submit the required remittance list makes the employer liable for reimbursement of payment of a properly filed claim when the concerned employee or dependents avail of Program benefits.
- The same rule establishes employer reimbursement liability without prejudice to the imposition of other penalties under the rules.
- RIRR Sections 178 and 179 define employer wrongdoing and prescribe fines for failures involving registration/deduction and remittance of contributions.
- The Circular operationalizes recovery by applying the reimbursement principle to claims PhilHealth has already paid where contributions did not qualify.
Covered claims and employer liability
- The Circular applies to all claims duly paid by PhilHealth for employee-members and/or their qualified dependents where there are no qualifying contributions.
- The employer’s liability attaches when the employer has failed to remit required contributions and/or failed to submit required remittance list, even if the claim is properly filed and paid.
- PhilHealth must recover the claim payments, including unpaid premiums, plus applicable interests/penalties.
- PhilHealth is authorized to pursue appropriate legal action(s) against employers that are delinquent, under-remitting, non-remitting, and/or non-reporting, as defined in the Circular.
Recovery and penalties framework
- The Circular empowers PhilHealth to recover claim payments and unpaid premiums, together with all applicable interests/penalties.
- Failure to comply with recovery undertakings authorizes PhilHealth to pursue appropriate legal action(s) against the concerned employers as delinquent, under-remitting, non-remitting, and/or non-reporting.
- RIRR Section 178 imposes a fine on any employer or officer who fails or refuses to register/deduct contributions from the employee’s compensation.
- RIRR Section 179 imposes a fine on any employer or officer authorized to collect contributions who fails or refuses to remit collected/deducted monthly contributions to PhilHealth within the required period after they become due.
Employer wrongdoing definitions
- A Delinquent Employer is one that has missed payment of the monthly contribution on behalf of all its employees for at least one (1) month within a period of six (6) months.
- An Under-remitting Employer is one that remitted and reported contributions for all employees that is less than the premium amount prescribed by PhilHealth and/or remitted the prescribed amount but did not include all its employees.
- A Non-remitting Employer is one that has not remitted any premium contributions for employees from the start of operations, or has not paid any premium contributions for six (6) months or more.
- A Non-reporting Employer is one (registered or unregistered) that has not submitted any reports for at least one (1) month within a period of six (6) months.
Amounts and timelines for employer fines
- RIRR Section 178 provides that fines are not less than Five Thousand pesos (Php5,000.00) multiplied by the total number of employees of the firm for failure/refusal to register/deduct contributions.
- RIRR Section 179 provides that fines are not less than Five Thousand pesos (Php5,000.00) but not more than Ten Thousand pesos (Php10,000.00) multiplied by the total number of employees of the firm for failure/refusal to remit collected/deducted contributions.
- RIRR Section 179 requires remittance within thirty (30) days from the date they become due after the employer has collected/deducted monthly contributions.
Implementation effect and relationship to prior issuances
- All provisions of previous issuances that are consistent with this Circular and not affected by it remain in full force and effect.
- The Circular takes effect after fifteen (15) days from its publication in a newspaper of general circulation and is deposited with the National Administrative Register at the University of the Philippines Law Center.
- The Circular is signed by ALEXANDER A. PADILLA, President and CEO.