The basic medical insurance co-ordination fund, also known as the basic medical insurance fund, refers to the basic medical treatment provided by the state to ensure the insured employees. The medical insurance agency provides funds to insured units and insured persons in accordance with relevant national regulations. Employees raise special funds for employee basic medical insurance. This fund is paid jointly by the insured units and individual insured employees according to a certain payment ratio.

The basic medical insurance fund should be based on revenue and expenditure should be balanced. It is mainly composed of five parts: basic medical insurance premiums paid by the employer; basic medical insurance premiums paid by individual employees; interest on basic medical insurance premiums; late payment fees on basic medical insurance premiums; and other funds incorporated into the basic medical insurance fund according to law.

The basic medical insurance fund consists of a pooled fund and individual accounts. All basic medical insurance premiums paid by individual employees are credited to their personal accounts. The basic medical insurance premium paid by the employer is divided into two parts: one part is used to establish a unified fund, and the other part is transferred to the personal account. The proportion transferred to the personal account is generally about 30% of the employer's payment. The specific proportion is determined by the coordinating region based on factors such as the payment scope of the personal account and the age structure of the employees. The older the employee, the higher the proportion of credits transferred to personal accounts. Retirees use their own basic pension as the base, and the part paid by the unit is transferred at a rate not less than the highest ratio of employees. At the same time, the part paid by the unit is transferred to their personal account according to the employee's personal contribution ratio. The overall fund and individual accounts must delineate their respective payment scopes, account for them separately, manage and use them separately, and must not crowd out each other.