A recent study found that health insurance coverage led to increased productivity among apparel workers and reduced absenteeism, raising the revenue of garments factories.
The apparel workers also benefitted from greater access to health care through health insurance, revealed the study conducted by Institute of Health Economics of Dhaka University.
The study was released on Saturday at a seminar at the institute.
The study, however, showed that the insurance companies could not make profit from the insurance and even the money claimed by the beneficiaries exceeded the yearly total premium within six months.
The study was carried out at five apparel factories hosting 10,000 workers under insurance coverage of Pragati Life Insurance and Alpha Islamic Life Insurance.
The insurance was introduced in October 2017 for the apparel workers under a pilot project of Netherlands-based development organisation SNV. The project would end in 2021.
Yearly premium of Tk 575 was being provided by the SNV and the apparel factory owners.
The yearly benefits included outpatient and inpatient services at selected hospitals of up to Tk 15,000.
The study showed that Pragati Life Insurance Ltd earned Tk 9,45,000 against 1809 workers of Vintage Denim Ltd and provided benefit of Tk 13,90,753.
On the other hand, Alpha Islamic Life Insurance Ltd earned Tk 18,84,000 against 3,769 workers of Millennium Textile, Fashion House and Pendora Sweater and provided benefits of Tk 22,88,085.
Alpha insurance, however, earned profits at one factory where the company earned premiums of Tk 22,50,000 against 4,500 workers and provided benefits worth Tk 78,1041.
The study also found that the owners of the factories wished to increase 50 per cent of the premium contribution while the beneficiaries showed willingness to contribute the premium up to 50 per cent.
Presenting the findings, Dhaka University’s Institute of Health Economics director Syed Abdul Hamid said that the study was aimed to look at the existing health insurance scheme at apparel factories to see if the insurance was viable.
The stakeholders could decide now about how to standardise the existing health insurance scheme, he said.
Hamid said that the factory owners and workers were broadly happy with the benefit of the insurance, but the insurance companies had some grievances.
The insurance companies believed that workers tended to seek the increased healthcare with the availability of the insurance.
They believed that all the workers would take the maximum benefit of Tk 15,000 against the premium of Tk 575.
‘The workers should be counselled about the insurance mechanism of risk pooling and fund pooling,’ Hamid said, adding that the existing model was not viable for the insurance companies.