International Major Medical

Helping Employers Choose Global Benefits in a Changing World Economy
by Stephen Killian and David Marciano

Brokers who serve multi-national employers need to be able to help their clients choose health benefits for their globally mobile workforce just when employers are reducing expenses. Given that healthcare costs are typically one of the top expenses for any company, employers demand and deserve first class service to justify their investments. For example, they want concierge service for expatriate employees, proactive account management for human resources staff, competitive rates, overall lower costs through domestic and international network savings, and disease management for employees.These all facilitate a more productive workforce.

The dominant trend that we anticipate in 2010 is increased globalization. As more and more countries increase cross-border business activities, international benefits carriers see a corresponding expansion of expatriate employee assignments to and from a broader range of countries. They now see a surge in small to mid-sized companies launching overseas initiatives in locations such as the Pacific Rim countries and U.S. bound expatriate assignments to the United States. The ever-expanding list of home-host country expatriate deployment combinations leads to an array of cultural, benefits and business complexities.

The expatriate benefits segment is rapidly changing in response to global economic trends. During the past few years, there has been a marked shift in expatriate assignment destinations, skill of employees deployed, and lengths of assignment. International employers rely on their benefit carriers to provide products and services to keep pace with the sweeping changes and intensified competition. The locations from which expatriates are deployed are also shifting. We are no longer seeing an overwhelming majority of western expatriates in some locations. China, for example, is experiencing an influx of international assignees from countries such as Singapore and Australia. Large multi-national firms have been players in the international arena for many years.

With the influx of overseas contracts in countries such as Afghanistan and other locations in the Middle East, even the largest firms are struggling to fill key positions in certain locations. Destinations continually shift, but no matter where the new expatriate hot spots are, similar challenges tend to emerge: doctor and hospital quality and accessibility, language and cultural barriers, and remote support top the list of expatriate concerns.

When evaluating expatriate health coverage for your clients, make sure that their expatriate employees have the resources and guidance of an insurer with an international presence to get the most appropriate care locally available. Covering international assignees on an insurance plan that is designed for U.S. domestic employees is likely to be an inadequate strategy from a benefits delivery and legal compliance perspective. Many employers are not aware of specialty services that dedicated international carriers provide to handle the needs of international assignees. These employers are still trying to retrofit their domestic plan without giving enough consideration to whom their employees will need to see in the event of serious medical needs. In the United States, it is typical to direct someone needing medical care after hours to the nearest hospital emergency room, but that would not be good advice for expatriates in many other countries. Healthcare systems vary widely throughout the world.

Compliance with home and host -country benefits legislation is a complex responsibility. Expatriate employees are increasingly being subject to host country laws. It is important for your client to contract with an international insurance carrier that has worldwide partnerships that are compliant with host country rules and regulations, such as visa entry requirements in the Middle East. Depending on regulations of the host countries, penalties may be applied to the insurance plan; the insured organization and its offices and employees; companies purchasing administrative services only; consultants or agents participating in the purchase of insurance; and even covered individuals.

When you’re counseling companies on how to select a health insurance carrier for international employees remember that valid assumptions made when selecting domestic benefits simply do not apply in the international realm and can lead to costly errors. Language, currency, and culture complicate the administration of health care benefits for international employees, resulting in issues and challenges that domestic employees do not face. You can help benefits managers alleviate the complexity by selecting an insurance company with the experience, resources, and global presence to negotiate the intricate cultural norms that can inhibit appropriate delivery of care. An understanding of the health care system in the host country is necessary to manage delivery of care. For example, in the United States, it is safe to assume that publicly funded institutions are less expensive than those in the private sector.  In other countries, like Switzerland, expatriates can expect to pay more at a public hospital than a private hospital. Health systems vary widely throughout the world.

Seasoned expatriates are increasingly sophisticated and have elevated expectations of health benefits while on assignment.  A domestic plan or a so-called “international” plan that is built on a domestic-based operations platform has significant disadvantage in the international arena. Simplifying the benefit design is key to a successful international benefit plan. For example, co-payments and deductibles are the norm domestically, but overseas health care professionals aren’t accustomed to accepting a combination of cash from patients and payment guarantees from insurance companies.  Penalties for non-compliance vary and may include criminal imprisonment as well as corporate and personal fines. In 2004, the U.S. Sentencing Commission adopted more stringent guidelines for effective compliance and ethics programs. Misrepresentations carry severe civil and criminal penalties.

There is no substitute for an international presence. International benefit carriers need to operate around the world to accumulate and update their international knowledge. When evaluating health plan insurers, look for whether the professional staff has lived and worked abroad. This will be important in terms of the carrier’s ability to offer insight into the daily challenges of international employee assignments because they have experienced these challenges firsthand.
While you can never eliminate all risks associated with the purchase of international benefits, your client will appreciate that you have taken multiple steps to protect the company and its employees against exposure, which adds up to healthier expatriates employees whose assignments for their employers continue successfully and uninterrupted.
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Stephen Killian, based in San Francisco, and David Marciano, based in Glendale, are CIGNA International Expatriate Benefits Senior New Business Managers.

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