The Inland Revenue (Amendment) (No. 4) Bill 2018 was passed by the Legislative Council today.

The new ordinance gives effect to a tax deduction under salaries tax and personal assessment to those who purchase health insurance for themselves or their relatives under the Voluntary Health Insurance Scheme.

Under the arrangement, a taxpayer can claim deductions for premiums paid up to $8,000 per insured person for insurance policies procured for the benefit of the taxpayer and all specified relatives.

These relatives include the taxpayer's spouse and children, and the taxpayer's or their spouse's grandparents, parents and siblings.

Secretary for Food & Health Prof Sophia Chan welcomed the passage of the bill, saying tax reduction is just one of the incentives to motivate people to buy the Voluntary Health Insurance Scheme products

Speaking to reporters after the bill’s passage, she said the scheme has other attractive points, such as the quality of the products that increases the people’s confidence to buy the products, the regulation of the products including the transparency of the costs, and related improvement measures.

Such attractions include a guaranteed renewal until the insured reaches the age of 100, and premium adjustment not being based on changes in the insured individual's health condition.

There is also no "lifetime benefit limit", and coverage is extended to unknown pre-existing conditions and ambulatory procedures including endoscopy.

The Food & Health Bureau encouraged the public to purchase certified plans under the scheme, so they may use private healthcare services when necessary to alleviate the pressure on the public healthcare system.

With the bill's passage, the Voluntary Health Insurance Scheme Office which was established earlier, will invite insurers to participate in the scheme and submit products for certification.

The first batch of certified plans is expected to be approved in early 2019 and taxpayers who pay the premium for them on or after April 1 that year will be eligible for a tax deduction.

Click here for the scheme’s details.