HMO coverage for nontraditional families

We’re very strict in limiting Health Maintenance Organization (HMO) benefits to employees and their legitimate families. That’s why I’m surprised to know of companies that extend the coverage even to unmarried workers with children born out of wedlock. Are we missing something? — Stone Maple.

​In the traditional corporate world, employee benefits were designed for the “ideal” household comprising married couples with children supported with neatly arranged family documents under the law. Anything falling outside that template was often ignored, if not rejected or quietly judged as immoral.

​Today, workplace culture has changed dramatically. According to the Philippine Statistics Authority, there was a decrease of 7.8% of married Filipinos in 2023 compared to those in 2022.

​Because of this trend, somehow some companies are expanding their HMO coverage to include the dependents of unmarried employees, their partners, and children born out of wedlock. It’s only a matter of time when we finally see the day open for those in the LGBTQ community.

​To people with old-school thinking, this may seem like misplaced generosity that supports immorality. But for organizations trying to attract, motivate, and retain talent in a competitive labor market, this is not charity — it’s a strategy to win the war for talent.

​Some people equate this as a choice between “immorality” and organizational survival. The solution? Expand benefits gradually without framing it in terms of morality. If an organization insists on covering people who are “legally married” and their legitimate children, it immediately discriminates against employees who have to pay out-of-pocket simply because their family structure isn’t covered by a marriage certificate. 

​The result? Lower morale, higher stress, and an unspoken perception of inequality. The truth is that management knows that justice and fairness are not just elements of a moral compass, but more of a productivity tool. Some managers justify this by saying they can’t judge but must support their workers as whole persons.

​When employees are loved and protected, they stay longer. This sends a message that no motivational poster or inspirational speaker can match.

REDUCING TURNOVER
Turnover is one of the most expensive experiences for any organization. Gallup found that when a worker resigns, the average cost of replacement typically ranges from 30%-50% of annual salary for entry-level employees, 50%-100% for mid-level professionals, and 100%-200% (or more) for managers and executives.

​While waiting for the right opportunity to move, imagine an employee whose partner or child faces a medical emergency but has no coverage. That employee will either take extended leave, become mentally preoccupied with financial worries, or resign to join a company that offers better family security.

​Companies extend HMO coverage to avoid this costly chain reaction. A few thousand pesos invested in dependent benefits prevents hundreds of thousands in turnover losses. From a financial perspective, it is one of the cheapest retention strategies available.

PERSONAL PROBLEM?
One thing every experienced manager knows is that there is no such thing as a personal problem if it adversely affects the worker’s performance. When a child is sick, a partner is hospitalized, or a family medical bill is pending, the employee’s focus at work immediately suffers. 

​Extending HMO benefits to non-traditional dependents is a preventive measure. It stabilizes the employee’s emotional and financial environment, which in turn stabilizes performance. Employees who have peace of mind about their medical expenses demonstrate higher engagement, make fewer errors, and reciprocate with loyalty.

​Healthy families support healthy productivity. It’s a simple equation, but one that companies used to ignore until recently.

MODERN INTERPRETATION
​In a society like the Philippines where family ties extend beyond legal definitions, companies have learned to design benefits that reflect reality rather than legal paperwork. Some organizations recognized early on that insisting on marriage certificates creates unnecessary barriers.

​Others realized that they were unintentionally penalizing single parents — the very individuals who often need support the most. Today, more companies embrace a more humane definition of family: the people who depend on the worker emotionally and financially, regardless of marital status.

​This shift is subtle but powerful. It signals respect for the diverse ways people build their lives as it removes the stigma surrounding unconventional family arrangements.

​Extending HMO benefits to non-traditional dependents is not a fad or a corporate indulgence. It’s a deliberate strategy built on fairness, competitiveness, inclusion, productivity, and financial sense.

​At the end of the day, when employees feel their families are protected, they will protect the company in return.

Consult Rey Elbo on your workplace issues for free. E-mail [email protected] or DM Facebook, LinkedIn, X or via https://reyelbo.com. Anonymity is guaranteed.