While travel and trade arrangements have made it easier to work just about anywhere in the world, differing healthcare legislation and state provision can cause nightmares for any employer with staff working abroad.
Andrew Apps, global sales and business development director at Goodhealth Worldwide, says: “We all like to moan about the National Health Service (NHS) but we’re very lucky to have it. If you need medical treatment abroad it can cost a lot of money and, worse, in some places you won’t necessarily want the healthcare that you can access. An employer sending staff abroad wouldn’t want to leave them exposed to either of these possibilities.”
Because of this, international medical insurance policies are a must for anyone working overseas. These provide cover for healthcare needs ranging from diagnostic tests and consultations through to operations and drugs. Unlike UK-based policies, these often also include cover for more day-to-day areas of healthcare that would traditionally be picked up by the NHS. This means that some policies will cover items such as GP visits, maternity costs and treatment for chronic conditions such as diabetes and asthma. And, because people can be based in developing countries where healthcare may be basic, policies usually include evacuation and repatriation cover, to fly someone out of the country or back home for treatment.
Policies can also reflect local healthcare customs, for example by including Chinese medicine for those in the Far East. “In the UK, this branch of medicine isn’t regarded as part of mainstream healthcare but in the Far East it is central to their healthcare system so we include it,” says Apps.
But picking the right policy isn’t always straightforward. Adam Thomson, head of business development for European, international and expatriate benefits at Mercer, explains: “A one-size-fits-all policy is ideal, but increasing amounts of country specific legislation and regulation mean this is often just an aspiration.”
As the UK pumps more money into the NHS, other countries have taken different stances on how to fund healthcare, introducing new rules that restrict access, or which require users to have insurance or meet some of the costs.
Often the new rules target temporary residents in particular. For example, in parts of the Middle East, having valid medical insurance is now a condition of obtaining a working visa. “Abu Dhabi introduced this requirement in 2007 as, with its oil supply dwindling, healthcare costs were coming under pressure. Dubai will follow its example this year and I expect the other emirates to do the same too,” says Apps.
To make matters more tricky, the policy has to be from an approved provider, a status that Apps says isn’t easy for an insurer to achieve. Policies also have to provide particular types of cover, such as routine maternity and chronic conditions, that aren’t automatically included.
To get around this, some insurers, including Axa PPP Healthcare and Goodhealth Worldwide, piggyback on local insurers’ schemes so policyholders are compliant. However, according to Thomson, it’s still possible to inadvertently take the wrong cover. “I’ve heard of cases where employers are fined for having non-compliant policies and there are examples of staff being denied visas because they didn’t have the right cover,” he says.
The Middle East isn’t the only part of the world where this is happening either. Russia, India and China have also taken this approach, with insurers forced to adapt cover to obtain approved status. More countries are likely to adopt this practice going forward.
This has resulted in some significant premium increases as cover is extended. Thomson has seen premiums increase by as much as 100% in some cases. “When an insurer has to offer new elements of cover, it can be very difficult to predict the claims volumes,” he adds.
Insurance requirements have also evolved as countries shift to different healthcare models. For example, a growing trend in continental Europe is to provide an element of free healthcare with an option, and in some cases a requirement, to take out a top-up insurance plan to cover the shortfall.
This is the case in France and the Netherlands, so insurers need to reflect this in their cover. Karen Teasdale, marketing manager for overseas operations and expatriate acquisitions at Axa PPP Healthcare, explains: “Under Dutch law, it’s compulsory to have an insurance policy with broad cover that includes pre-existing and chronic conditions. This needs to be included in an international policy.”
Where appropriate, insurers will also have arrangements with a country’s state system to ensure any costs are reclaimed if possible. This is the case in Norway, says Tim Slee, global sales director at Bupa International. “If a company’s employees are members of the Norwegian health system (the FFU) we’d send details of any claims that they made to the FFU and it would pay back a portion of the claim,” he explains.
In some of these cases, dual insurance can often be the most sensible option. For example, if someone is based in France but likely to spend time in other countries it may be sensible to take a top-up policy for France. These cost between €200 and €300 a year.
Residency can also determine the type of insurance that is required. For example, in the US, if someone is considered a resident it is illegal for them to hold an international policy.
But establishing residency isn’t always straightforward, says Slee. “Residency rules can vary between states. In some, you could be classed as a resident if you are registered with a local doctor and have a local driving licence while, in others, paying tax is sufficient. In most cases though, the issue of residency won’t arise until someone has been in the country for two years. At that point [employers] might need to switch to a domestic policy,” he explains.
Insurers are working hard to make provision for all of these differences in healthcare requirements to ensure customers don’t get caught out. This includes adapting cover and acquiring approved status, either in their own right or through a local insurer.
As an increasing number of countries clamp down on healthcare costs, more legislation is likely to be introduced. “It is complex and likely to become more so, but a good insurer or benefits consultant will be able to decipher the rules for you and ensure your employees have the right cover wherever they’re working,” adds Slee.
Examples of differing healthcare legislation from countries around the globe demonstrate some of the many ways employers must adapt their cover.
- Abu Dhabi has introduced compulsory cover for expatriates with policies having to include full refund for maternity costs and cover for chronic conditions. Insurers must be approved by the government. Staff must be covered by such a scheme before they will be granted a visa.
- In Switzerland, the rules vary between the cantons (districts), with some requiring expatriates to purchase medical insurance from an organisation that is based and registered in there.
- Dutch law under the Health Insurance Act, which came into effect in May 2006, requires any person resident in the Netherlands to hold a health insurance policy that meets certain requirements. These include cover for pre-existing and chronic conditions.
- France operates a system where the state provides an element of free healthcare with individuals either paying for the shortfall or taking out insurance to cover it. However, the new president Nicolas Sarkozy is expected to tighten up rules on foreign nationals using the health system.
Healthcare provision differs around the world so the benefits offered on international medical insurance policies are adapted to reflect this.
International plans commonly cover:
- In-patient treatment, such as operations, accommodation and nursing.
- Out-patient care, for example, consultations, diagnostic tests, drugs and dressings.
- Treatment for chronic conditions, for instance diabetes, asthma, hypertension.
- Routine pregnancy and childbirth.
- GP visits.
- Dental treatment, often for emergency work only but check-ups and routine work can also be included.
- Evacuation and repatriation if someone needs to return home for treatment or to another country if healthcare provision is poor.
Prices depend on where an individual is based, with high-cost areas, such as the US and Hong Kong, bumping up the premium. Insurers, therefore, typically price cover for a region, for example Europe, worldwide excluding US, and worldwide including the US. Some are also increasingly pricing schemes on an individual country basis.