Group Medical Insurance to Replace the Home Country Medical Plan for Expatriates.
Expatriate group medical insurance has been used effectively for over 15 years to replace the U.S. domestic or home country medical plan for expatriates residing outside of their home country for six months or longer.
Why Expatriate Group Medical Insurance over Home Country Plans
Excellent programs exist in the market to serve expatriate group insurance needs for almost any nationality and any situation.
What we find today is that, amazingly, many corporations, universities, and even non-profit organizations leave their international assignees under a home country, or U.S. medical program that provides almost no international service and there can be major gaps and holes in coverage. There are 10 reasons for an expatriate group medical plan for every 1 against. (below)
What are the summary reasons for expatriate group health insurance:
Global organizations with just 2 or more expatriates are utilizing expatriate group medical schemes for the following reasons:
- Costs are about what you are budgeting for already under the U.S. medical program.
- There is a immediate increase in service using an expatriate group health insurance plan. For example, claims can be submitted in any language or currency. There a many examples of service improvements
- U.S. expatriates and third country national employees can be jointly insured under the same program.
- Employees can be living almost anywhere in the world with a few exceptions like Iran or North Korea for example.
- The expatriate can reside in a different country from the spouse and / or children.
The following discussion takes a “best practices” approach examining what the leading companies in their industry are offering their expatriates. Of course, there will be variations among industries and between organizations depending on the corporate culture, the assignment location, and the type of work being performed. What is outlined below is a very broad brush overview, but it certainly can be used to examine your own expatriate policy or help develop one if expatriates are new to your organization.
Standard Expatriate Group Insurance Offering
North American companies typically offer the following international group insurance to U.S. or Canadian expatriates. These lines are typically paid by the employer entirely or offered with a small amount of employee cost sharing:
- International Group Medical Insurance (a special program that works globally).
- International Workers compensation insurance (through the U.S. plan or via a foreign workers comp program). In some instances the international medical plan will pick up the work related risk but this should never be assumed because most policies are “non-occupational.”
- International Dental Insurance – Expatriate Dental Insurance
- International Evacuation & Assistance (ISOS or MEDEX for example)
- Expatriate Group Life Insurance and AD&D
- Expatriate Group Disability Insurance. Expatriate long term disability insurance.
- International Employee Assistance Programs
- Some form of pre-departure assistance and cross cultural training for expatriates.
- Fully insured moving expense up to $50,000 of value (this is an average we have seen much higher amounts)
- Housing allowance abroad o Additional allowances for travel or international schools for children
Optional, but often used expatriate schemes
- Vacant home insurance for expatriates overseas for under 1 year, leaving behind an unsold home that is vacant or unoccupied.
- International Vision Insurance – Expatriate Vision Insurance
- Expatriate Personal Liability Insurance.
- Expatriate Personal Property Insurance. This includes personal property taken on the assignment after the international move and goods in storage, either in the host country or another country.
- Voluntary International Life Insurance and AD&D.
- International expatriate “club” memberships so employees don’t return home because of social reasons, or more importantly, because the spouse cannot handle the assignment.
- A security assessment of the site in the host country, both the residence location and the work location
- Retention of a security company to devise an evacuation strategy in the event of crisis or emergency political evacuation (declaration of “persona non grata”)
The cost of an expatriate can be extremely high of course. Studies by the National Foreign Trade council consistently places the cost of an expatriate at well over $1,000,000 for a three year assignment if you include salary in the equation. With a weak dollar vs. foreign currencies such as the GBP, Euro, or Yen, the cost of an expatriate gets even higher as we move toward 2010. The key concept stressed in best practices associated with expatriates is not to go cheap on the list above. An unsuccessful expatriate that goes out on a 3 year assignment and returns after 9 months is going to cost your organization a lot more than any cost savings that can be generated by securing the coverages above with the cheapest carriers in the market. The key is to put in a very solid benefits structure that will help the employee succeed and make it to the end of the assignment, having accomplished the tasks you have laid out for them in the original assignment letter.