How Can the ₱7,000 EO 64 Medical Allowance Be Used?

Why This Matters

EO 64 provides a ₱7,000 annual medical allowance for civilian government employees, strictly for HMO-type benefits. DBM Budget Circular 2024-6 explains the authorized ways to use this allowance — some involve procurement, some involve opt-in enrollment and remittance facilitation.

1. Agency Procurement – Section 7.1.1(i)

What happens: The agency procures an HMO plan for all covered employees.

How it works

• The agency conducts bidding or an allowed alternative mode under RA 9184.
• The agency signs the contract with the HMO provider.
• The ₱7,000 allowance is applied to cover the cost of the group HMO plan for each eligible employee.

2. Employees’ Association Procurement – Section 7.1.1(ii)

What happens: A registered employees’ union, cooperative, or association procures the HMO for its members, but the agency still handles the payment flow.

How it works

• The association signs the contract with the HMO provider.
• The association certifies the list of members who will use their ₱7,000 allowance for this plan.
• The agency remits each member’s ₱7,000 allowance directly to the HMO provider based on the association’s certified list.
• The association never holds the funds — it only manages the contract and enrollment certification.

3. Invididual Availment – Section 7.1.2

Yhr allowance will be given in cash form for those who will (i) avail their own or (ii) pay/renew their existing HMO-type benefit.

Common Uses

• Employees who already have an HMO plan use the allowance to renew it.
• Employees who are dependents under a spouse’s or child’s corporate HMO use the allowance to help pay for that coverage.
• Agencies may offer payroll deduction and remit the allowance directly to the HMO with employee authorization.

How it works

• The employee selects an HMO plan or shows proof of an existing plan.
• The allowance is given to the employee in cash
• The agency keeps a record of payments and authorizations following GAM (Government Accounting Manual) rules.

Group Opt-in

• Agencies may facilitate enrollment and payment of individual employees collectively to enable employees access to group HMO plans

How it works

• The employee selects a group HMO plan
• agency remits allowance to employee via payroll disbursement, and/or
• employee authorizes agency to deduct from payroll, enroll employee and remit payment to HMO provider
• agency facilitates employee enrollment and payment to group HMO plan.
• agency maintains records of authorizations and remittances in line with the Government Accounting Manual (GAM).

4. Reimbursement – Section 7.1.3

What happens: Employees may be reimbursed for health-related expenses or HMO payments, but only in specific situations.

Common Uses

• Employees in GIDA (Geographically Isolated and Disadvantaged Areas) where no HMO operates.
• Employees whose HMO application was denied due to age or health conditions.
• Employees in locations where no HMO services are available.

How it works

• The employee submits receipts or proof of qualified medical payments.
• The agency verifies and reimburses the expense from the ₱7,000 allowance allocation.
• All reimbursements are documented and reported per GAM rules.

Key Compliance Notes

• Follow the Government Accounting Manual (GAM) for all recording, remittance, and liquidation of funds.
• Always secure written employee authorization for any remittance to an HMO.
• COA should be notified in writing when an agency facilitates opt-in enrollments or payroll remittances.

Summary

• Agency Procurement – The agency conducts bidding (RA 9184) and buys an HMO plan for employees.
• Association Procurement – A union/co-op procures the HMO; the agency remits the allowance to the association, which pays the HMO.
• Opt-In Enrollment – Employees choose their HMO; the allowance is either given in cash or remitted directly to the provider with employee authorization.
• Reimbursement – Only for employees in GIDA areas, denied HMO applications, or when no HMO is available.

The opt-in enrollment method is the most practical and flexible approach — employees keep choice of HMO, agencies stay compliant, and payments can be remitted cleanly to providers with proper authorization.