Understanding the Benefits of Contributory Health Service Schemes

Health insurance is an essential aspect of financial planning, providing individuals and families with financial protection against unexpected medical expenses. However, not everyone has access to health insurance through their employer or can afford to purchase it on their own. This is where contributory health service schemes come in. In this article, we will discuss the benefits of these schemes and why they are becoming increasingly popular.

What is a Contributory Health Service Scheme?

A contributory health service scheme is a type of health insurance plan where the cost of coverage is shared between the employer and the employee. This means that both parties contribute to the cost of the insurance, making it more affordable for the employee. These schemes are usually offered by employers as part of their employee benefits package.

Lower Cost for Employees

One of the main benefits of a contributory health service scheme is that it lowers the cost of health insurance for employees. By sharing the cost with their employer, employees can access health insurance at a more affordable rate. This is especially beneficial for those who may not be able to afford health insurance on their own or have pre-existing conditions that make it difficult to obtain coverage.

Comprehensive Coverage

Health insurance

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Contributory health service schemes often offer comprehensive coverage, including hospitalization, outpatient care, and prescription drugs. This means that employees can have peace of mind knowing that they are covered for a wide range of medical expenses. This is particularly important for those who have chronic health conditions or may require frequent medical care.

Tax Benefits

Employers who offer contributory health service schemes can also benefit from tax deductions. The contributions made towards the health insurance premiums are considered a business expense and can be deducted from the company’s taxes. This not only benefits the employer but also allows them to offer more affordable health insurance options to their employees.

Improved Employee Retention

In today’s competitive job market, employee benefits play a significant role in attracting and retaining top talent. By offering a contributory health service scheme, employers can improve employee satisfaction and retention. This is because employees feel valued and taken care of when their employer offers health insurance as part of their benefits package.

Better Health Outcomes

When employees have access to health insurance through a contributory health service scheme, they are more likely to seek medical care when needed. This can lead to better health outcomes as medical conditions can be detected and treated early on. It also promotes a healthier workforce, which can result in increased productivity and reduced absenteeism.


Contributory health service schemes offer numerous benefits for both employers and employees. They provide affordable health insurance options, comprehensive coverage, and tax benefits for employers. Additionally, they can improve employee retention and promote better health outcomes. If you are an employer looking to attract and retain top talent, consider offering a contributory health service scheme as part of your employee benefits package. And if you are an employee, be sure to take advantage of this valuable benefit offered by your employer.