DBM Budget Circular No. 2024-6
Rules and Regulations on the Grant of Medical Allowance to Civilian Government Personnel
This post explains, in simple terms, the key guidelines of DBM Budget Circular No. 2024-6 on the grant of the Medical Allowance to qualified civilian government personnel beginning FY 2025. The allowance is intended as a subsidy for HMO-type benefits, subject to conditions, coverage, exclusions, fund sourcing, and reporting requirements.
Source: DBM Budget Circular No. 2024-6, dated December 12, 2024. (Effective January 1, 2025.)
1. Background (Why this Medical Allowance is being granted)
Executive Order (EO) No. 64, s. 2024 authorizes the grant of a Medical Allowance beginning FY 2025, in an amount not exceeding Seven Thousand Pesos (P7,000) per year per qualified civilian government personnel. The allowance is meant to help employees avail HMO-type benefits, subject to rules issued by DBM (or the Governance Commission for GOCCs, when applicable).
2. Purpose of the Circular
The Circular provides the official guidelines, rules, and regulations for implementing the Medical Allowance for qualified civilian government personnel.
3. Coverage (Who is covered)
The Circular applies to civilian government personnel in National Government Agencies (NGAs), including State Universities and Colleges (SUCs), and GOCCs not covered by the CPCS rules under RA No. 10149 and EO No. 150, s. 2021. Coverage applies regardless of appointment status (regular, casual, or contractual), appointive or elective, and whether full-time or part-time. The Circular also covers employees in LGUs and Local Water Districts (LWDs).
4. Exclusions (Who is not covered)
The following are excluded from coverage:
- Officials and employees already receiving HMO-based health care services by virtue of special laws.
- Officials and employees in the legislative and judicial branches and other offices vested with fiscal autonomy.
- Military and uniformed personnel (AFP, PNP, and other specified uniformed services under the Circular).
- Officials and employees in GOCCs covered by RA No. 10149 and EO No. 150 (covered by the CPCS of the GCG).
- Individuals hired without employer-employee relationship and funded from non-Personnel Services (PS), such as consultants/experts, laborers paid by pakyaw or piecework, student laborers/apprentices, and those engaged through job orders/contract of service or similar arrangements.
5. Key definitions (Plain-language guide)
- GIDA: Geographically Isolated and Disadvantaged Areas (areas difficult to reach and with limitations in accessing health services).
- HMO provider: A legally organized entity that provides or arranges pre-agreed health services for a fixed pre-paid fee for a period of time.
- HMO-type product: An HMO-type benefit arrangement approved under Insurance Commission rules, offered by duly licensed HMO companies.
6. Rate of the Medical Allowance
- For FY 2025 (full-time service): The Medical Allowance shall not exceed P7,000 per year.
- For subsequent years: The allowance shall not exceed the amount authorized under the pertinent general provisions in the annual GAA.
- For part-time service: The allowance is proportionate to hours of service (and if employed part-time in two or more agencies, the total shall not exceed the authorized amount).
7. Forms of the Medical Allowance (How it may be granted)
A. HMO-type product coverage (group procurement)
- Through procurement by the agency; or
- Through procurement by employees’ organizations/groups.
Employees may opt out of group purchase and choose to individually avail of another HMO product.
B. Cash form (for employees who will avail or pay their own HMO)
- For employees who will avail their own HMO-type benefit; or
- For employees who will pay or renew an existing HMO-type benefit.
C. Cash form (for medical expenses due to difficulty acquiring HMO)
Cash may be granted if acquiring an HMO product is difficult due to any of the following:
- The locality/community is identified as GIDA (certified by the head of agency).
- The locality has no adequate HMO branch or office of a licensed HMO company (certified by the head of agency).
- The employee’s application for HMO coverage was denied by an HMO company.
In this case, the allowance may be used for medical expenses such as hospitalization, emergency care, diagnostic tests, and medicines.
8. Key conditions for eligibility (What employees must meet)
- The personnel must be occupying regular, contractual, or casual positions.
- The personnel must render at least an aggregate of six (6) months of service in the fiscal year (including leaves with pay and services under alternative work arrangements recognized by CSC).
- A newly hired employee may qualify after rendering six (6) months of service.
- Personnel formally charged with administrative/criminal cases pending resolution remain entitled until found guilty by final judgment. If found guilty, they are not entitled in the year the decision becomes final; if the penalty is reprimand only, they remain entitled.
- For employees on detail: paid by the mother agency; for secondment: paid by the recipient agency.
- Transferred employees: if not granted by the former agency, the new agency may grant upon submission of certification; if already granted by the previous agency, the new agency will no longer grant for the same year.
- Study leave or study/training/scholarship: entitled only if the employee renders at least six (6) months of service in the year; if on study/training/scholarship for the entire year, not entitled.
9. Important financial and tax notes
- If the HMO-type product availed costs less than P7,000, the employee is not required to refund the difference.
- The Medical Allowance authorized under EO No. 64, s. 2024 is treated as a de minimis benefit and is exempt from income tax and withholding tax, subject to the cited rules in the Circular.
10. Fund sources (Where the money should come from)
- NGAs and SUCs: Charge to available PS allotments. If deficient, charge against the Miscellaneous Personnel Benefits Fund and other available appropriations under the annual GAA, subject to rules.
- Covered GOCCs: Charge to approved Corporate Operating Budget (COB). If insufficient, a lower but uniform amount may be granted to all qualified employees.
11. Medical Allowance for LGUs (including barangays)
LGUs may grant the Medical Allowance at a uniform rate determined by their sanggunian, depending on financial capability, not exceeding P7,000 per year, subject to PS limitation rules and local budgeting processes. The grant must be authorized through an appropriation ordinance.
12. Medical Allowance for LWDs
LWDs may grant the Medical Allowance at a uniform rate determined by their Board of Directors, not exceeding P7,000 per year, chargeable to their Board-approved COB, subject to the conditions in the Circular.
13. Reportorial requirements (What must be submitted)
- Personnel who received the allowance must submit proof of enrollment with an HMO provider (examples include HMO agreement/ID, certification of membership, or official receipt).
- If cash was granted for medical expenses (due to difficulty acquiring HMO), supporting documents such as receipts must be submitted, subject to agency internal guidelines.
- Each NGA, SUC, GOCC, and LWD must submit an annual report to DBM (template in Annex A) not later than one (1) month after every fiscal year.
14. Agency responsibilities
- Agencies must issue internal implementing rules/procedures on release, use, and monitoring of the allowance, consistent with the Circular.
- Agencies may be held liable for grants not in accordance with the Circular, without prejudice to employee refund of any excess/undue payments.
15. Effectivity
This Circular takes effect on January 1, 2025.
Official Copy
Open Budget Circular No. 2024-6 (PDF)Reference: DBM Budget Circular No. 2024-6, dated December 12, 2024. :contentReference[oaicite:0]{index=0}
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