PhilHealth Personnel as Public Health Workers: The UHC Act's Curative Effect on Benefits

The Supreme Court has settled a long-standing question about the status of Philippine Health Insurance Corporation (PhilHealth) personnel: they are public health workers entitled to the benefits under the Magna Carta of Public Health Workers. The ruling, issued on September 28, 2021, set aside Commission on Audit (COA) disallowances totaling P91,156,377.93 for hazard pay and subsistence and laundry allowances paid to PhilHealth officers and employees for calendar year 2012.

The case clarifies how the Universal Health Care Act (Republic Act No. 11223) retroactively resolved the classification of PhilHealth personnel, with significant implications for government employees and auditors alike.

The Dispute Over PhilHealth Benefits

In December 2011, PhilHealth's President and CEO issued an office order removing the corporation's Welfare Support Assistance and instead granting benefits under RA 7305, the Magna Carta of Public Health Workers, effective January 1, 2012. The PhilHealth Board confirmed this grant through Board Resolution No. 1584.

However, COA auditors issued two Notices of Disallowance against the payments. The COA reasoned that PhilHealth personnel who are not directly involved in rendering health or health-related services cannot be considered health workers. It noted that PhilHealth is a government corporation established to provide health insurance coverage, not to perform health service functions, and is even prohibited from providing health care directly.

The Issue Before the Court

The sole issue was whether PhilHealth's officers and employees are entitled to hazard pay and subsistence and laundry allowances under the Magna Carta of Public Health Workers.

The Supreme Court's Ruling

The Court ruled in favor of PhilHealth, finding the petition impressed with merit. The key basis was Section 15 of RA 11223, the Universal Health Care Act, which classifies all PhilHealth personnel as public health workers in accordance with RA 7305.

The Court cited its earlier 2019 decision in Philippine Health Insurance Corporation v. Commission on Audit (G.R. No. 222710), which described RA 11223 as a "curative statute" that remedied the shortcomings of RA 7305 regarding the classification of PhilHealth personnel. As a curative law, RA 11223 applies retrospectively to all present and pending cases where the classification of PhilHealth personnel is at issue.

The Court explained that RA 11223 neither violates the Constitution nor impairs vested rights. Instead, it promotes the objective of RA 7305: to improve the social and economic well-being of health workers, their living and working conditions, and terms of employment.

The Benefits Under RA 7305

With the classification settled, the Court confirmed that PhilHealth personnel are entitled to the following benefits under RA 7305:

Hazard Allowance (Section 21). Public health workers in difficult areas, strife-torn or embattled areas, distressed or isolated stations, prison camps, mental hospitals, radiation-exposed clinics, laboratories, or disease-infested areas—or areas under state of calamity or emergency—are entitled to hazard allowance of at least 25% of monthly basic salary for those receiving salary grade 19 and below, and 5% for those with salary grade 20 and above.

Subsistence Allowance (Section 22). Public health workers required to render service within the premises of hospitals, health infirmaries, rural health units, and other health-related establishments to make their services available at all times are entitled to full subsistence allowance of three meals.

Laundry Allowance (Section 24). Public health workers required to wear uniforms regularly are entitled to laundry allowance equivalent to P125.00 per month, subject to periodic review.

Since PhilHealth personnel are considered public health workers, the Court found it unnecessary to discuss the issue of good faith. The Notices of Disallowance were set aside.

Practical Takeaways

• PhilHealth personnel are now definitively classified as public health workers under Section 15 of RA 11223, entitling them to all benefits under RA 7305, including hazard, subsistence, and laundry allowances, as well as longevity pay.

• The Universal Health Care Act operates retroactively. As a curative statute, RA 11223 applies to pending cases involving the classification of PhilHealth personnel, settling the matter "once and for all."

• Government agencies should align their benefit programs with RA 7305. PhilHealth and similar entities can now grant these benefits without fear of COA disallowance on the ground that their personnel are not health workers.

• COA disallowances based on the old interpretation may be reversed. Entities that faced disallowances for granting RA 7305 benefits to PhilHealth personnel may have grounds to seek reconsideration or judicial review.

• The ruling does not extend to all government employees. The classification as public health workers is specific to PhilHealth personnel under RA 11223; other government corporations must check their own enabling laws.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.