Expatriate Health Care Issues
Medical benefits are an important and potentially expensive
part of the expatriate compensation package. When grappling with
the complexities of managing visa applications and tax
implications, healthcare is another issue that employers need to
address and which many find confusing. Frequently, the response
on the part of employers is to rely on a call to their normal
private medical insurer to provide healthcare cover through an
expatriate insurance policy. The problem with this approach is
that standards of healthcare provision vary widely from country
to country and, unless there is a clear understanding of the gap
between the host country's national health service and the
insurance policy purchased, the employer may be subject to
significant risk exposure or, conversely, be grossly
over-insured.
Although superficially most healthcare policies appear very
similar, the contractual "fine print" can often reveal
surprising discrepancies. Employers need to understand what it is
they are purchasing for these valued employees and to educate
them as to what to expect when they arrive in the host country.
Preferably this should be done well before any crisis arises so
that the employees receive the quality service they expect.
Expatriate wish-list
Research conducted recently suggests that the level of
dissatisfaction among expatriates in relation to their healthcare
coverage is very high. The key to this dissatisfaction is that
employees expect to have the same level of coverage they enjoyed
in their home country; depending on the policy, they may find
that services to which they once had free access now carry a
deductible or are not covered at all. Like all the other
components of the compensation package, adequate thought needs to
be given to what employees are likely to expect from their health
cover while abroad and extent to which further negotiation with
the individual is necessary.
What the employer may not realise when purchasing insurance
for its expatriates is that the insurance carrier is usually only
a claims administrator; the medical advice and evacuation
services are sub-contracted to an external supplier. The issue
then becomes one of the competencies of the medical evacuation
company and how well equipped it is to deal with both mundane and
emergency situations in those parts of the world where employees
are based. This becomes crucial in a situation where, for
example, an employee sustains a spinal injury and needs to be
moved to a specialised hospital in another country; speedy
evacuation can make the difference between full and partial
recovery. Thus before purchasing cover, an employer should check
to which medical evacuation company the insurer has
sub-contracted such services and be satisfied that the network of
resources is adequate.
The situation is more complicated when expatriate coverage is
purchased for a group of employees based in several different
locations. Companies need to ask themselves:
- Can the medical evacuation company provide a satisfactory
service for all the locations in which expatriates are
based for both ordinary and complex medical conditions?
- Should consideration be given to using different insurers
for different groups of employees? Or would this be too
cumbersome to manage?
In terms of managing the benefits provided, it is important
for the employer to be satisfied that claims are paid quickly and
efficiently, and to check whether the insurance provider can
settle charges directly with the hospital and other medical
facilities that employees are likely to use. Equally, employees
need to have easy access to professionals who provide the medical
advice in that country and, if possible, access to individuals
who speak their own language.
Other considerations
As an increasing number of multinationals send employees to
more remote locations around the globe, it is becoming more
important that they have a full understanding of the standard and
scope of healthcare provided locally, and the ability of their
expatriates to make use of these services. For example,
purchasing expensive private health insurance for an expatriate
relocating to Canada would not be good value as the national
system provides quality healthcare to residents at a reasonable
cost. Some items, such as outpatient prescription drugs, would
not be covered, but it could be cheaper to reimburse the employee
directly rather than purchase insurance. In some countries
adequate facilities may be available, but there may not be a
nationalised healthcare system to subsidise the cost. In this
circumstance the employer needs to consider the cost of
purchasing services. In the United States, for instance, the
healthcare system is highly developed, but extremely expensive,
and it would be reckless for an employer not to provide insurance
cover.
Conversely, if an expatriate is being sent to a less developed
country, the availability of health services may be restricted
and even where services are available their quality may be below
acceptable standards. In these circumstances, particularly in an
emergency situation, evacuation of the employee may be the only
sensible approach. Emergency evacuation companies base their
decisions on what is medically necessary in any particular
situation. The medical director is ultimately responsible for the
decision on whether a patient must be evacuated, but can draw
upon an international network of doctors to troubleshoot and to
provide medical information and advice.
Hopefully most situations will be routine and easily managed,
but employers must have the peace of mind of knowing that the
infrastructure is in place to take care of its expatriates in all
circumstances. What is certain is that the importance of
healthcare as part of the expatriate package should not be
underestimated if foreign assignments are to be a success for
both the employer and employee.
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