Author: Ann Marie Olszewski | Marsh & McLennan Agency
One of the most important steps in a person’s career can be an international assignment. Even relatively small firms, involved in international business or trying to expand their global footprint, may have a need to send employees overseas for weeks, months or years at a time. Along with considerations like housing and compensation, health and welfare benefits are a critical part of the package for expatriates. Here are a few points to consider:
- Why not simply cover the expatriate under the local insurance plan? Countries providing some level of national health care to their citizens may extend that coverage to foreign workers. Thus, local health insurance could be available. However, this does not mean the quality of care and access to providers will meet the employee’s expectations and needs. In addition, expatriates frequently travel from one country to another, with occasional trips back to the United States, and a local health plan is unlikely to provide coverage outside of a limited geographical area.
An international expatriate health plan will be portable, meaning it provides coverage regardless of the employee’s location. It will also have its own referral network of providers and facilities, which removes the guesswork for the expatriate when determining where to seek care. This is especially valuable for two reasons. First, the expatriate may not speak the local language, making it difficult to assess quality providers and presenting challenges when seeking care. Next, most foreign providers will require payment up-front, but network providers in an expatriate plan may accept negotiated rates and bill the insurance company directly.
- What is the length of the expected assignment? Employees residing abroad for fewer than six months will not require an actual expatriate health plan. In these cases, short-term medical travel insurance makes more sense, in the event urgent or emergency treatment is required. For example, such plans will cover hospitalization for a heart attack, or an office visit for a bad cough, but not services related to routine wellness or behavioral health.
Short-term medical travel insurance is available from several carriers. These plans may include a variety of associated benefits, including emergency prescription replacement, assistance with lost travel documents, and phone translation services. Coverage could be for a single trip, or for multiple trips within a year.
An employee who will be residing outside the U.S. for six or more months may need an international expatriate health plan providing a broad array of benefits, which closely resembles the coverage he or she had in the home country.
- How many expatriates require health coverage? If only one employee is being sent on an overseas assignment, then an individual international expatriate policy is probably the only viable option. However, group coverage may be available from some insurers for as few as two expatriates. It makes more sense to have one group expatriate health plan, than to offer several expatriates different individual plans that are inconsistent with each other. It’s also more cost-efficient.
A group expatriate health plan allows the employer to offer the same comprehensive coverage to all expatriates, regardless of their location. In addition, medical underwriting may not be required, which is important if any of the expatriates or their dependents have a pre-existing health condition. (Individual policies will always require medical underwriting, which means coverage could be denied in some cases. The premium could also be increased and/or dollar maximums applied to the expatriate’s particular health condition.)
Finally, maternity coverage may be of interest to younger expatriates. Maternity services will generally be covered in a group plan, with no waiting period, but may be excluded entirely from an individual policy, or be covered only with a higher premium and after an extended waiting period.
- Are other benefits included in an international expatriate health plan? It will depend on the carrier, the plan elected, and whether coverage is individual or group. An employer may want to add ancillary benefits like dental, vision and life insurance. However, all expatriate health coverage, whether short- or long-term, individual or group, should include emergency medical evacuation. However, be sure to determine whether pre-existing conditions are included in the event of medical evacuation.
The challenges of an overseas assignment are potentially as great as the rewards. A well-crafted international expatriate health plan can go a long way to ensuring the employee’s success while working abroad.
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About Marsh & McLennan Agency – Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the United States. MMA operates autonomously from Marsh to offer employee benefits, executive benefits, retirement, commercial property & casualty, and personal lines to clients across the United States.