Does Your EOR Include HMO? Why It Matters More Than the Monthly Fee

Last updated: 24 July 2026

Is HMO legally required in the Philippines?

No. PhilHealth is the statutory health insurance in the Philippines, and every employer must contribute to it. Private HMO cover is a market benefit, not a legal obligation.

So an Employer of Record that doesn’t include HMO isn’t breaking any law. That’s worth saying plainly, because the more common framing — that HMO is part of “full statutory compliance” — isn’t accurate, and you should be sceptical of any provider who tells you otherwise.

The reason to care about HMO isn’t compliance. It’s that PhilHealth, on its own, doesn’t cover much.

What does PhilHealth actually cover?

Less than most Australian employers assume.

Research from the Philippine Institute for Development Studies found that in 2023, Philippine hospitals charged an average of ₱36,130 per admission while PhilHealth reimbursed around ₱11,000. Over the same period, PhilHealth reimbursements fell by roughly 40% while average hospital charges rose by more than 50%.

The national picture matches. Philippine Statistics Authority data shows out-of-pocket payments made up 42.7% of total health expenditure in 2024 — ₱615 billion, up 11.8% in a single year, and nearly level with the 44.7% covered by government schemes.

Medical inflation has been running between 15% and 19% a year for the past three years.

Put together: your team member has statutory health insurance that covers roughly a third of a hospital admission, and the uncovered portion is growing faster than their salary.

Why does this matter if it isn’t required?

Three reasons, in order of how quickly they’ll affect you.

HMO is the market standard for the roles you’re hiring. Experienced Filipino professionals — bookkeepers, executive assistants, developers, marketers — expect HMO. It’s a standard inclusion across the BPO and offshore sector. An offer without it isn’t competitive for that tier of candidate, regardless of the salary attached.

It’s what candidates compare. When a Filipino professional weighs two offers at similar pay, HMO is often the deciding line, particularly if it extends to dependents. Salary gets compared first. HMO decides it.

A health event without cover becomes a resignation. An employee facing a ₱25,000 gap on a hospital bill has three options: savings, debt, or a job that includes HMO. The third is the one that costs you a replacement, a re-hire, and the three to six months it takes a new person to reach the productivity of the one who left.

What it costs versus what it prevents

At Team Up Now, HMO is included in the AUD $300 per employee per month flat fee. There is no separate HMO line item. The incremental cost to you is zero — it’s priced in, not tacked on.

The replacement comparison is less comfortable. If a team member leaves for a role with better health cover, the direct cost of a replacement under Team Up Now’s lifetime guarantee is also zero — no placement fee, no expiry, no second charge regardless of when or why the person left. But free-to-replace is not free. A replacement typically takes three to six months to reach the productivity of the person who left. For a bookkeeper or EA who knows your business, your systems, and your preferred ways of working, that gap is real money in lost output and management time.

The arithmetic is not close. An employer excluding HMO to hold a lower headline rate is trading a small recurring cost for an occasional large one, and passing the risk in between to the employee.

How to check whether your EOR includes HMO

EOR pricing pages are not consistent about this. Some bundle HMO, some list it as an add-on, some don’t mention it at all — and “statutory benefits included” does not mean HMO, because HMO isn’t statutory.

Ask your provider, in writing:

1. Is HMO included in the quoted monthly fee, or billed separately?
2. If separate, what is the cost per employee per month?
3. What is the maximum benefit limit, and what’s the room and board allowance?
4. Is there a waiting period before cover starts?
5. Are pre-existing conditions covered, and after how long?
6. Can dependents be added, and at what cost?
7. Which HMO provider, and which hospital network?
8. Who holds the policy — the EOR, or a third party the EOR contracts with?

Question eight matters more than it looks. If your EOR provides employment through another company’s entity, ask which of them is actually responsible for the benefit and who your team member calls when a claim is declined. A benefit that routes through a third party for both employment and insurance is a longer chain of accountability than one where the employer and the policy are held in the same place.

The wider point about comparing EOR quotes

A monthly EOR fee is only comparable to another monthly EOR fee if you know what each one contains. Two providers quoting different rates are not quoting two prices for the same thing if one includes HMO, recruitment, and replacement cover and the other doesn’t.

Build the comparison on inclusions, not headline rate. Ask each provider for a written list of what the fee covers, then compare the lists rather than the numbers. The EOR provider comparisons on this site work through those lists for the major providers side by side — with published figures where available and “not published” where they aren’t.

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Team Up Now is an Australian Employer of Record placing Filipino professionals with Australian businesses. HMO is included in the standard monthly fee — no separate billing, no waiting period. If you want a straight answer about what’s covered, book a call with Julius or Anna.