BEIJING, May 12  -- China issued detailed guidelines to pilot preferential personal income tax policies for commercial health insurance buyers on Tuesday.

The trial program offers pre-tax reductions for premium payments of less than 2,400 yuan (392 U.S. dollars) per year for qualified employees, according to a joint statement released by the Ministry of Finance, State Administration of Taxation and China Insurance Regulatory Commission.

The State Council, China's cabinet, decided to encourage the public to purchase private health insurance last Wednesday to improve welfare for employees.

Each province has to nominate a city to pilot the preferential policies while the program will be promoted throughout the four municipalities of Beijing, Shanghai, Tianjin and Chongqing, according to the statement.

Data from the China Insurance Regulatory Commission showed that direct health insurance premiums written and premiums received before taking into account reinsurance ceded amounted to 65.21 billion yuan in the first quarter of 2015, up 32.6 percent compared with the same period a year earlier.