Expats: Saving Money on Global Benefits, Part 2

George Bashaw

 

Author:
George Bashaw – Atlas Global Benefits

I hear snippets everyday about the economy recovering. Try telling that to your HR friends.  They are still getting pressure to cut costs and create efficiencies.  Adopting a true expat plan for benefits can create numerous efficiencies.  This blog is Part 2 in a series to help companies save money on international benefits by creating a global health benefits package specifically for expats.

Hard Cost
I am surprised every time I run into a company that does not have a global benefits package for expats.  A typical response is, “we don’t want to spend the money.”  This is a common misconception.

Did you know:

  • Expat plans are typically less expensive and more compressive than a comparable domestic plan;
  • The plans typically they do not have copays and many of the exclusions common with domestic plans;  and
  • The hard cost does not take into consideration the cost of a critical event like a heart attack or a medical evacuation and repatriation without international coverage.

Do a comparison and see where your company falls.

Efficiencies for HR
A company has three options when insuring expats:  keep them on a domestic plan and run claims through their current carrier; put them on a local (country-specific ) plan; or a specialized expat plan.  By choosing the latter, you can greatly reduce the administrative burden.  Here’s how:

  • Compliance:  Administering employee benefit plans in multiple countries creates a significant amount of compliance with local laws.  Adopting a global benefits package for globally mobile employees shifts the burden of compliance from the HR department to the insurance carrier.
  • Claims and Service:  This becomes the responsibility of the expat carrier.  It is only a matter of time before you have an employee in an assignment country on the operating table demanding payment to begin surgery.
  • Consistency in Benefits:  It is common for companies to provide expats with a local health care solution rather than one that is fully transportable around the globe.  Since benefits vary from country to country, you could end up with a disgruntled expat when they discover that one country’s benefits are richer than the next assignment.

Benefits for the Expat

  • Freedom:  Expats are on foreign assignment and their needs are significantly different than someone who is a local employee.  By nature, the expat will travel (different countries and home) and they need coverage that will follow them.
  • Productivity:  A global benefits package keeps your expat focused on their assignment.  They no longer worry about having to travel for medical care or deal with claims and medical provider issues.

Foreign Nationals
Creating a global benefits plan for non-US citizens working abroad requires some due diligence and proper communication.  The challenge is to design a plan that is integrated with any social benefits so there is no duplication. Perception of the new plan is very important.  In order to be well received, it is necessary to properly communicate the benefits to the expatriates so they are comfortable with the new private coverage as compared to their prior social system.

Use a Broker for a Complete RFP
I know this sounds self serving, but use a broker who writes international coverage.  Out of ten companies I call on, nine have one of two expat carriers. But there are more than a half a dozen carriers who provide quality coverage and it would serve you well to get a full RFP.  Second, a broker has knowledge of the market, leverage with carriers, and can match your needs with the appropriate insurance provider.  Third, most brokers have enough business to merit carrier discounts that can help negate commissions or broker fees.  In sum, make sure you are specifically insuring your risk and use a professional to facilitate the process.

I hope this helps you navigate through the complexities of expat health care options.  Please let me know your thoughts by leaving a comment.

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2 responses to “Expats: Saving Money on Global Benefits, Part 2

  1. George~
    I agree with your great insight on Expat benefits; especially that a broker can provide insight, options and market leverage that an employer will generally not be able to obtain.
    On the front side it may seem like an unneccesary expense, or that it may require more administration, but the benefits clearly outweigh the costs.
    Clients that are new to international operations, or that have never witnessed the disaster of a bad Expat medical experience, are naturally harder to convince; however, as you note, it only takes one bad Expat experience to realize that staying on a domestic US Plan just doesn’t cut it.
    Also, when you consider the total investment that is made for Expatriate assignments, there is no reason not to protect that investment with affordable, comprehensive coverage for the Expat and their family. Acclimating to another culture is difficult enough, right?

    On another note, providing a global plan for the Business Travel population is another easy decision. Employees that travel internationally, for less than 6 months a year, should be covered for urgent and emergent care, with a direct pay arrangement, at any time they are abroad.
    From a stomach bug to a twisted ankle to a serious auto accident, a business travel medical plan is another international coverage that multinationals should be employing. It’s blanket coverage, easy to place and administer, affordable, and provides business travelers with peace of mind and assistance anywhere in the world.

    Thanks again for the great article.

    Nik

  2. Nik, great points as always. My original blog had a paragraph on Global Business Travel. However, I thought in needed more attention considering how important coverage is and how inexpensive it can be obtained.

    Thank you again for your support,
    George