R.A. No. 11199 - Social Security Act of 2018

Republic of the Philippines

Congress of the Philippines

Metro Manila

Seventeenth Congress

Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand eighteen.

REPUBLIC ACT No. 11199

AN ACT RATIONALIZING AND EXPANDING THE POWERS AND DUTIES OF THE SOCIAL SECURITY COMMISSION TO ENSURE THE LONG-TERM VIABILITY OF THE SOCIAL SECURITY SYSTEM, REPEALING FOR THE PURPOSE REPUBLIC ACT NO. 1161, AS AMENDED BY REPUBLIC ACT NO. 8282, OTHERWISE KNOWN AS THE "SOCIAL SECURITY ACT OF 1997"

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Social Security Act of 2018."

SEC. 2. Declaration of Policy. - It is the policy of the State to establish, develop, promote and perfect a sound and viable tax-exempt social security system suitable to the needs of the people throughout the Philippines which shall promote social justice through savings, and ensure meaningful social security protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.  Towards this end, the State shall endeavor to extend social security protection to Filipino workers, local or overseas, and their beneficiaries.

In the pursuit of this policy, a social security program shall be developed emphasizing the value of "work, save, invest and prosper."  The maximum profitability of investible funds and resources of the program shall be ensured through a culture of excellence in management grounded upon sound and efficient policies employing internationally recognized best practices.

SEC. 3. Social Security System. - (a) To carry out the purposes of this Act, the Social Security System, hereinafter referred to as "SSS," a corporate body, with principal place of business in Metro Manila, Philippines, is hereby created.  In the discharge of its mandated responsibilities under this Act, the SSS shall function and operate as an independent and accountable government-owned and -controlled corporation (GOCC) within the corporate governance standards and principles of Republic Act No. 10149 (GCG Law), except as otherwise provided herein.

The SSS shall be directed and controlled by a Social Security Commission, hereinafter referred to as "Commission," composed of the Secretary of Finance as ex officio Chairperson, the SSS President and Chief Executive Officer as Vice-Chairperson who shall automatically act as the Commission Chairperson in the absence of the Finance Secretary, the Secretary of Labor and Employment, as ex officio member, and six (6) appointive members, three (3) of whom shall represent the workers' group, at least one (1) of whom shall be a woman; three (3), the employers' group, at least one (1) of whom shall be a woman; all of whom shall be appointed by the President of the Philippines and shall be of known competence, probity, integrity and recognized expertise in any of the fields of social security, pension fund, insurance, investment, banking and finance, economics, management, law or actuarial science and with at least ten (10) years of managerial or leadership experiene.  The six (6) members representing workers and employers groups shall be chosen from among the nominees of workers' and employers' organizations respectively, as endorsed by the Governance Commission for GOCCs following the fit and proper rule and standards on integrity, experience, education, training and competence.  The term of office of the regular appointive members of the Commission shall be three (3) years, which can be extended for another term of three (3) years: Provided, That the terms of the first six (6) appointive members shall be one (1), two (2), and three (3) years for every two (2) members, respectively, notwithstanding Section 17 of the GCG Law: Provided, further, That they shall continue to hold office until their successors shall have been appointed and duly qualified.  All vacancies, prior to the expiration of the term, shall be filled for the unexpired term only.

The fiduciary duties of a member of the Commission include the following:

(1) Act with utmost and undivided loyalty to the SSS;

(2) Act with due care, extraordinary diligence and skill in the conduct of business and exercise utmost good faith in all transactions relating to his/her duties to the SSS and its properties, and in his/her dealings with and for the SSS he/she is held to the same strict rule of honesty and fair dealing between himself/herself and his/her principal as other agent;

(3) Act for the benefit of the SSS and not for his/her own benefit;

(4) Not to profit as individual by virtue of his/her position and ensure that profits received by him/her from the SSS properties or businesses revert to the SSS and to hold the same as trustee for the benefit of the SSS and its members;

(5) Avoid conflicts of interst and not to acquire an interest adverse to or in conflict with that of the SSS, while acting for the SSS or when dealing individually with third persons and declare any interest he/she may have in any particular matter before the Commission; and

(6) Apply sound business principles to ensure the financial soundness of the SSS.

The compensation, per diems, allowances and incentives of the appointive members of the Commission shall be in accordance with and subject to GCG Law.

(b) The general conduct of the operations and management functions of the SSS shall be vested in the SSS President who shall serve as the Chief Executive Officer immediately responsible for carrying out the program of the SSS and the policies of the Commission.  The SSS President shall be appointed by the President of the Philippines and shall be a person of known competence, probity, integrity and recognized expertise in social security, pension fund, insurance, investment, banking and finance, economics, management, law or actuarial science.

The SSS President may be removed for a valid cause or any of the following reasons in accordance with the requirement of due process:

(1) If he or she becomes physically or mentally incapacitated from discharging the duties and responsibilities of the office, and such incapacity has lasted for more than six (6) months;

(2) If he or she is guilty of acts or omissions which are of fraudulent or illegal character or which are manifestly opposed to the aims and interests of the SSS;

(3) If he or she no longer possess the qualifications specified in this Act;

(4) If he or she does not meet the standards of performance based on the evaluation by the Governance Commission for GOCCs under the GCG Law.

(c) An Office of the Actuary shall be created to conduct the necessary actuarial studies and present recommendations on premiums, investments and other related matters.  The Commission, upon the recommendation of the SSS President, shall appoint the Chief Actuary and such other personnel as may be deemed necessary; prescribe their duties and establish such methods and procedures as may be necessary to ensure the efficient, honest and economical administration of the provisions and purposes of this Act: Provided, however, That the personnel of the SSS below the rank of Vice-President shall be appointed by the SSS President: Provided, further, That the personnel appointed by the SSS President, except those below the rank of assistant manager, shall be subject to the confirmation by the Commission: Provided, further, That the personnel of the SSS shall be selected only from civil service eligibles and be subject to civil service rules and regulations: Provided, finally, That the SSS shall be exempt from the provisions of Republic Act No. 6758 and Republic Act No. 7430.

The Chief Actuary of the SSS can only be removed by just causes which include among others gross incompetence, gross inefficiency, disloyalty, conflict of interest, dishonesty and serious misconduct.

(d) The Commission shall fix the reasonable compensation, allowances and other benefits of all positions in the SSS, including its President and Chief Executive Officer, based on a comprehensive job analysis and audit of actual duties and responsibilities.  The compensation plan shall be comparable with the prevailing compensation plan in the Government Service Insurance System (GSIS), the Bangko Sentral ng Pilipinas (BSP) and other government financial institutions and shall be subjet to periodic review by the Commission no more than once every four (4) years without prejudice to merit reviews or increases based on productivity and efficiency.

Social Security Act of 2018   [2]

R.A. 11223 - Universal Health Care Act [3]

SEC. 12. Administrative Expense. - No more than seven and one-half percent (7.5%) of the actual total premium collected from direct and indirect contributory members during the immediately preceding year shall be allotted for the administrative cost of implementing the Program.

SEC. 13. PhilHealth Board of Directors. - (a) The PhilHealth Board of Directors, hereinafter referred to as the Board, is hereby reconstituted to have a maximum of thirteen (13) members, consisting of the following: (1) five (5) ex-officio members, namely: the Secretary of Health, Secretary of Social Welfare and Development, Secretary of Budget and Management, Secretary of Finance, Secretary of Labor and Employment; (2) three (3) expert panel members with expertise in public health, management, finance, and health economics; and (3) five (5) sectoral panel members, representing the direct contributors, indirect contributors, employers group, health care providers to be endorsed by their national associations of health care institutions and health care professionals, and representative of the elected local chief executives to be endorsed by the League of Provinces of the Philippines, League of Cities of the Philippines, and League of Municipalities of the Philippines: Provided, That at least one (1) of the expert panel members and at least two (2) of the sectoral panel members are women.

The sectoral and expert panel members must be Filipino citizens and of good moral character.

The expert panel members must: (i) be of recognized probity and independence and must have distinguished themselves professionally in public, civic or academic service; (ii) to be in the active practice of their professions for at least seven (7) years; and (iii) not be appointed within one (1) year after losing in the immediately preceding elections, whether regular or special.

(b) The Secretary of Health shall be an ex officio non-voting Chairperson of the Board.

(c) All appointive members of the Board shall be required to undergo training in health care financing, health systems, costing health services and HTA prior to the start of their term.  Non-compliance shall be a ground for dismissal.

Within thirty (30) days following the effectivity of this Act, the Governance Commission for Government-Owned or -Controlled Corporations (GCG) shall, in accordance with the provisions of Republic Act No. 10149, promulgate the nomination and selection process for appointive members of the Board with a clear set of qualifications, credentials, and recommendation from the concerned sectors.

SEC. 14. President and Chief Executive Officer (CEO) of PhilHealth. - Upon the recommendation of the Board, the President of the Philippines shall appoint the President and CEO of PhilHealth from the Board's non-ex officio members: Provided, That the Board cannot recommend a President and CEO of PhilHealth unless the member is a Filipino citizen and must have at least seven (7) years of experience in the field of public health, management, finance, and health economics or a combination of any of these expertise.

SEC. 15. PhilHealth Personnel as Public Health Workers. - All PhilHealth personnel shall be classified as public health workers in accordance with the pertinent provisions under Republic Act No. 7305, also known as the Magna Carta of Public Health Workers.

SEC. 16. Additional Powers and Functions of PhilHealth. - (a) To fix the reasonable compensation, allowances and other benefits of all positions, including its President and CEO, based on a comprehensive job analysis and audit of actual duties and responsibilities, subject to the approval of the President of the Philippines.  The compensation plan shall be comparable with government social securit institutions and shall be subject to periodic review by the Board no more than once every four (4) years without prejudice to merit reviews or increases based on productivity and efficiency;

(b) To establish the organizational structure and staffing pattern of PhilHealth's central and regional offices to cover as many provinces, cities and legislative districts, including foreign countries, whenever and wherever it may be expedient, necessary and feasible and to inspect or cause to be inspected periodically such offices, subject to the approval by the Board;

(c) To maintain a Provident Fund which consists of contributions made by both PhilHealth and its officials and employees and earnings thereon, for the payment of benefits to such officials and employees or their dependents or heirs under such terms and conditions as may be prescribed by the Board, subject to the approval of the President of the Philippines; and

(d) To adopt or approve the annual and supplemental budget of receipts and expenditures including salaries, allowances and early retirement of PhilHealth personnel and to authorize such capital and operating expenditures and disbursements as may be necessary and proper for the effective management and operation of PhilHealth: Provided, That this shall be subject to the budgetary limitations stated under Section 12 hereof: Provided, further, That the submission of the corporate budget to the Department of Budget and Management (DBM) shall be for information purposes only.

CHAPTER IV

HEALTH SERVICES DELIVERY

SEC. 17. Population-based Health Services. - The DOH shall endeavor to contract province-wide and city-wide health systems for the delivery of population-based health services.  Province-wide and city-wide health systems shall have the following minimum components:

(a) Primary care provider network with patient records accessible throughout the health system;

(b) Accurate, sensitive, and timely epidemiologic surveillance systems; and 

(c) Proactive and effective health promotion programs or campaigns.

SEC. 18. Individual-based Health Services. - (a) PhilHealth shall endeavor to contract public, private, or mixed health care providider networks for the delivery of individual-based health services: Provided, That member access to services shall not be compromised: Provided, furthermore, That during the transition, PhilHealth and DOH shall incentivize health care providers that form networks: Provided, finally, That apex or end-referral hospitals, as determined by the DOH, may be contracted as stand-alone health care proiders by PhilHealth.

(b) PhilHealth shall endeavor to shift to paying providers using performance-driven, close-end, prospective payments based on disease or diagnosis related groupings and validated costing methodologies and without differentiating facility and professional fees; develop differential payment schemes that give due consideration to service quality, efficiency and equity; and institute strong surveillance and audit mechanisms to ensure networks' compliance to contractual obligations.

CHAPTER V

ORGANIZATION OF LOCAL HEALTH SYSTEMS

SEC. 19. Integration of Local Health Systems into Province-wide and City-wide Health System. - The DOH, Department of the Interior and Local Government (DILG), PhilHealth and the LGUs shall endeavor to integrate health systems into province-wide and city-wide health systems.  The Provincial and City Health Boards shall oversee and coordinate the integration of health services for province-wide and city-wide health systems, to be composed of municipal and component city health systems, and city-wide health systems in highly urbanized and independent component cities, respectively.  The Provincial and City Health Boards shall manage the Special Health Fund referred to in Section 20 of this Act and shall exercise administrative and technical supervision over health facilities and health human resources within their respective territorial jurisdiction: Provided, That municipalities and cities included in the province-wide and city-wide health systems shall be entitled to a representative in the Provincial or City Health Board, as the case may be.

SEC. 20. Special Health Fund. - The province-wide or city-wide health system shall pool and manage, through a special health fund, all resources intended for health serives to finance population-based and individual-based health services, health system operating costs, capital investments, and remuneration of additional health workers and incentives for all health workers: Provided, That the DOH, in consultation with the DBM and the LGUs, shall develop guidelines for the use of th Special Health Fund.

SEC. 21. Income Derived from PhilHealth Payments. - All income derived from PhilHealth payments shall accrue to the Special Health Fund to be allocated by the LGUs exclusively for the improvement of the LGU health system: Provided, That PhilHealth payments shall be credited to the annual regular income (ARI) of the LGU.

SEC. 22. Incentives for Improving Competitiveness of the Public Health Service Delivery System. - The National Government shall make available commensurate financial and non-financial matching grants, including capital outlay, human resources for health and health commodities, to improve the functionality of province-wide and city-wide health systems: Provided, That underserved and unserved areas shall be given priority in the allocation of grants: Provided, further, That the grants shall be in accordance with the approved province-wide and city-wide health investment plans, which shall account for complementation of public and private health care providers and public or private health sector investments.

[2]                    Universal Health Care Act                    [4]

R.A. 11223 - Universal Health Care Act [2]

(c) The DOH and the local government units (LGUs) shall endeavor to provide a health care delivery system that will afford every Filipino a primary care provider that would act as the navigator, coordinator, and initial and continuing point of contact in the health care delivery system: Provided, That except in emergency or serious cases and when proximity is a concern, access to higher levels of care shall be coordinated by the primary care provider; and

(d) Every Filipino shall register with a public or private primary care provider of choice.  The DOH shall promulgate the guidelines on the licensing of primary care providers and the registration of every Filipino to a primary care provider.

SEC. 7. Financial Coverage. - (a) Population-based health services shall be financed by the National Government through the DOH and provided free of charge at point of service for all Filipinos.

The National Government shall support LGUs in the financing of capital investments and provision of population-based interventions.

(b) Individual-based health services shall be financed primarily through prepayment mechanisms such as social health insurance, private health insurance, and HMO plans to ensure predictability of health expenditures.

CHAPTER III

NATIONAL HEALTH INSURANCE PROGRAM

SEC. 8. Program Membership. - Membership into the Program shall be simplified into two (2) types, direct contributors and indirect contributors, as defined in Section 4 of this Act.

SEC. 9. Entitlement to Benefits. - Every member shall be granted immediate eligibility for health benefit package under the Program: Provided, That PhilHealth Identification Card shall not be required in the availment of any health service; Provided, further, That no co-payment shall be charged for services rendered in basic or ward accommodation: Provided, furthermore, That co-payments and co-insurance for amenities in publci hospitals shall be regulated by the DOH and PhilHealth: Provided, finally, That the current PhilHealth package for members shall not be reduced.

PhilHealth shall provide additional Program benefits for direct contributors, where applicable: Provided, That failure to pay premiums shall not prevent the enjoyment of any Program benefits: Provided, further, That employers and self-employed direct contributors shall be required to pay all missed contributors with an interest, compounded monthly, of at least three percent (3%) for employers and not exceeding one and one-half percent (1.5%) for self-earning, professional practitioners, and migrant workers.

SEC. 10. Premium Contributions. - For direct contributors, premium rates shall be in accordance with the following schedule, and monthly income floor and ceiling:

Year	Premium Rate	Income Floor	Income Ceiling
2019	2.75%	P10,000.00	P50,000.00
2020	3.00%	P10,000.00	P60,000.00
2021	3.50%	P10,000.00	P70,000.00
2022	4.00%	P10,000.00	P80,000.00
2023	4.50%	P10,000.00	P90,000.00
2024	5.00%	P10,000.00	P100,000.00
2025	5.00%	P10,000.00	P100,000.00

Provided, That for indirect contributions, premium subsidy shall be gradually adjusted and included annually in the General Appropriations Act (GAA): Provided, further, That the funds shall be released to PhilHealth: Provided, furthermore; That the DOH, in coordination with PhilHealth, may request Congress to appropriate supplemental funding to meet targeted milestones of this Act: Provided, finally, That for every increase in the rate of contribution of direct contributors and premium subsidy of indirect contributors, PhilHealth shall provide for a corresponding increase in benefits.

SEC. 11. Program Reserve Funds. - PhilHealth shall set aside a portion of its accummulated revenues not needed to meet the cost of the current year's expenditures as reserve funds: Provided, That the total amount of reserves shall not exceed a ceiling equivalent to the amount actuarially estimated for two (2) years' projected Program expenditures: Provided, further, That whenever actual reserves exceed the required ceiling at the end of the fiscal year, the excess of the PhilHealth reserve fund shall be usd to increase the Program's benefits and to decrease the amount of members' contributions.

Any unused portion of the reserve fund that is not needed to meet the current expenditure obligations or support the above-mentioned programs shall be placed in investments to earn an average annual income at prevailing rates of interest and shall be referred to as the Investment Reserve Fund.  The Investment Reserve Fund shall be invested in any or all of the following:

(a) In interest-bearing bonds, securities or other evidences of indebtedness of the Government of the Philippines: Provided, That such investment shall be at least fifty percent (50%) of the reserve fund;

(b) In debt securities and corporate bonds of prime or solvent corporations created or existing under the laws of the Philippines: Provided, That the issuing or its predecessor entity shall not have defaulted in the payment of interest on any of its securities: Provided, further, That the securities are issued by companies with high growth opportunities and earnings potentials: Provided, finally, That such investment shall not exceed thirty percent (30%) of the reserve fund;

(c) In interest-bearing deposits and loans to or securities in any domestic bank doing business in the Philippines: Provided, That in the case of such deposits, this shall not exceed at any time the unimpared capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That the bank shall have been designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas;

(d) In preferred stocks of any solvent corporation or institution created or existing under the laws of the Philippines listed in the stock exchange with proven track record or profitability over the last three (3) years and payment of dividends for a period of at least three (3) years immediately preceding the date of investment in such preferred stocks;

(e) In common stocks of any solvent corporation or institution created or existing under the laws of the Philippines listed in the stock exchange with high growth opportunities and earnings potentials;

(f) In bonds, securities, promissory notes, or other evidences of indebtedness of accredited and financially sound medical institutions exclusively to finance the construction, improvement and maintenance of hospitals and other medical facilities: Provided, That such securities and instruments shall be guaranteed by the Republic of the Philippines or the issuing medical institution and the issued securities are both rated triple 'A' by authorized accredited domestic rating agencies: Provided, further, That said investments shall not exceed ten percent (10%) of the total reserve fund; and

(g) In debt instruments and other securities traded in the secondary markets with the same intrinsic quality as those enumerated in paragraphs (a) to (e) hereof, subject to the approval of the PhilHealth Board.

No portion of the reserve fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or -controlled corporations.

As part of its investments operations, PhilHealth may hire institutions with valid trust licenses as its external local fund managers to manage the reserve fund, as it may deem appropriate, through public bidding.  The fund manager shall submit an annual report on investment performance to PhilHealth.

The PhilHealth shall set up the following funds:

(1) A fund to secure benefit payouts to members prior to their becoming lifetime members;

(2) A fund to secure payouts to lifetime members; and

(3) A fund for optional supplemental benefits that are subject to additional contributions.

A portion of each of the above funds shall be identified as current and kept in liquid instruments.  In no case shall said portion be considered part of invested assets.

The PhilHealth shall allocate a portion of all contributions to the fund for lifetime members based on an allocation to be determined by the PhilHealth actuary based on a pre-determined percentage using the current average age of members and the current life expectancy and morbidity curve of Filipinos.

The PhilHealth shall manage the supplemental benefits and the lifetime members' fund in an actuarially sound manner.

The PhilHealth shall manage the supplemental benefits fund to the minimum required to ensure that the supplemental benefit payments are secure.

[1]                    Universal Health Care Act                     [3]

R.A. 11223 - Universal Health Care Act [5]

SEC. 32. Monitoring and Evaluation. - (a) The Philippine Statistics Authority (PSA) shall conduct the relevant modules of household surveys annually during the first ten (10) years of the implementation, and thereafter follow its regular schedule.

(b) The DOH shall publish annual provincial burden of disease estimates using internationally validated estimation methods and biennially using actual public and private sector data from electronic records and disease registries, to support LGUs in tracking progress of health outcomes.

SEC. 33. Health Impact Assessment (HIA). - HIA shall be required for policies, programs, and projects that are crucial in attaining better health outcomes or those that may have an impact on the health sector.

[4]                     Universal Health Care Act                     [6]

R.A. No. 11199 - Social Security Act of 2018 [3]

SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within the mandatory period of twenty (20) days after the submission of the evidence.  The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission.

(b) Appeal to Court. - Any decision of the Commission, in the absence of an appeal therefrom as herein provided, shall become final and executory fifteen (15) days after the date of notification, and judicial review thereof shall be permitted only after any party claiming to be aggrieved thereby has exchausted his remedies before the Commission.  The Commission shall be deemed to be a party to any judicial action involving any such decision, and may be represented by an attorney employed by the Commission, or when requested by the Commission, by the Solicitor General or any public prosecutor.

(c) Court Review. - The decision of the Commission upon any disputed matter may be reviewed both upon the law and the facts by the Court of Appeals.  For the purpose of such review, the procedure concerning appeals from the Regional Trial Court shall be followed as far as practicable and consistent with the purposes of this Act.  Appeal from a decision of the Commission must be taken within fifteen (15) days from notification of such decision.  If the decision of the Commission involves only question of law, the same shall be reviewed by the Supreme Court.  No appeal bond shall be required.  The case shall be hard in a summary manner, and shall take precedence over all cases, except that in the Supreme Court, criminal cases wherein life imprisonment or death has been imposed by the trial court shall take precedence.  No appeal shall act as supersedeas or a stay of the order of the Commission unless the Commission itself, or the Court of Appeals or the Supreme Court, shall so order.

(d) Execution of Decisions. - The Commission may, motu proprio or on motion of any interested party, issue a writ of execution to enforce any of its decisions or awards, after it has become final and executory, in the same manner as the decision of the Regional Trial Court by directing the city or provincial sheriff or the sheriff whom it may appoint to enforce such final decision or execute such writ: and any person who shall fail or refuse to comply with such decision, award or writ, after being required to do so shall, upon application by the Commission pursuant to Rule 71 of the Rules of Court, be punished for contempt.

[2]          Social Security Act of 2018          [4]