Tackling international private medical insurance

Consulting, implementing and managing an international health insurance scheme for your expatriate and local employees is examined by James Spencer, international development manager at Jelf International.

What methods can you employ to derive the greatest value from a healthcare scheme? What does international PMI include, and how can medical inflation be managed to ensure that the benefit is sustainable long term?

Growing into overseas territories represents a real opportunity to deliver rapid growth, in both established markets such as Dubai and Singapore as well as emerging markets such as the BRICS (Brazil, Russia, India and China) – or more recently the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), as coined by Goldman Sachs economist Jim O’Neill.

As more UK-based organisations look abroad to diversify income and become ‘future proof’, attracting, employing and retaining talent abroad becomes a key challenge.

What can international PMI include?

International PMI is both richer in coverage than UK PMI and provides a broader range of choice than traditional health insurance. Typical ‘core benefits’ include hospital charges and specialist fees, with comprehensive coverage for oncology and organ transplants. This cover will have a focus on inpatient and emergency treatment including medical evacuation.

Outpatient care such as consultations, diagnostics (MRI scans/X-rays), and drugs and dressings will be included in the vast majority of long term international PMI products. The individual monetary limits vary.

Enhanced benefits, which are becoming commonplace, include annual routine physical check-ups, compassionate emergency travel, fertility treatment, dental cover and vision care. Depending on your individual requirements, employees covered, budget and location, many of these benefits can be tailored to meet your individual needs.

Deriving value from international PMI

Today, HR  and reward managers are not looking for the cheapest price, instead focussing on what generates the greatest long-term value. This is how the agenda is changing to meet the objectives and considerations of business expanding into new territories.

One product does not fit all. This is not simply an insurance policy to be placed, but a business enablement tool, which can improve business continuity, reduce absenteeism and drive your project to success. But to get the greatest value, you need to understand your unique risks and find relevant insurance and wellbeing solutions to manage them. This includes:

  • Where are you operating and where will your employees be doing business – Lagos & Los Angeles have starkly different healthcare delivery systems, quality of provision and associated costs.
  • Who are your employees? What’s their nationality and their typical ages. Offering a comprehensive maternity package to a group of miners aged in their 40s represents less value that offering a traditional Chinese medicine benefit.
  • How long are they on assignment for? This may impact how you want to setup invoicing and the administrative burden of adding and removing employees every few weeks.

If you choose to use an employee benefits consultant, they will be able to utilise evidence from similar organisations in your sector, and locations to offer a counter balance and benchmark of what is appropriate and customary in the country. Offering a private medical insurance with vastly different benefits to your peers can have implications to employee and employer.

Global coordination of local policies

For established multinationals, and VC backed start-ups alike ‘full blown’ international PMI policies are becoming less relevant for their entire employee population.

Many are looking at local, or regional healthcare insurance for their talent who are from a particular region, and working in a neighbouring country. Singapore is a good example, where medical inflation is double digit, and many workers are from Indonesia, China, Philippines or South Korea. A regional healthcare policy that covers Asia Pacific only is much more appropriate and cost effective than a worldwide excluding USA cover.

In other territories, where legislation means that only local insurers are permitted (Such as Saudi Arabia, or Abu Dhabi) choosing an international insurer which partners for in-country cover is essential. Not only will this impact access to facilities but work visas and incorrect advice could lead to employee/employer fines.

Three other factors to consider are insurance premium tax implications, invoicing (central HQ or local office), and once your policy is in place how you will go about communicating the benefits to your employees on the ground.

Managing medical inflation

Medical inflation is reflected in your insurer’s renewal premium but there are steps that can be taken to combat it and actively manage your risk. Choosing an insurer with active nurse case management, a ‘catastrophic claims cap’ and well established medical provider network are factors to consider, as they will impact your renewal premiums.

Insurers have varying pricing approaches, buy today more than ever they are assessing individual company scheme performance to determine the increase at policy renewal, so a robust cost management approach will fundamentally impact the plans’ affordability.

Consider spreading the risk/responsibility:

  • Employee: Excess, co-payments or coinsurance (places financial responsibility on employee)
  • Enterprise: Contract structure including self insurance, profit share or cost plus contracts (depending on size of employee population, can help manage your risk differently)

In summary

International PMI is not only a safeguard for your employees, but also for the bottom line of your business. It is an essential ‘peace of mind’ benefit which manages your ‘duty of care’ to assignees, supports presenteeism, can be structured to attract and retain top talent, and helps facilitate the global expansion of your business.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for GrowthBusiness.co.uk from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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