International medical insurance – key factors explained
10 September 2010
There are five key factors you should be aware of when setting up international medical insurance policies for employees.
Most multinational companies set out with the objective that any group international medical insurance should ensure that employees working abroad are properly cared for, wherever they are working. The complexities of the market however sometimes means that schemes in place compromise on the international health care offered and actually cost more than they need to.
Here the five major considerations you should think about before evaluating any of the products from the 25 or so available international medical insurance providers.
- The scope of international medical insurance required
Are you providing for emergencies only or planning to ensure that your employees and their dependents have quality medical care for all eventualities? Do you want to offer a different level of cover depending on the quality of local services available at various locations? Should employees benefit from different levels of cover depending on their seniority? Do you want to include expatriate and nationals in the same scheme? All of this needs carefully defining for your existing situation and any likely future changes.
- Local legislation in territories you work in
Many countries in the Middle-east (see our recent article about Abu Dhabi health insurance for example) and elsewhere have introduced legislation not only making medical insurance compulsory for expat workers but also limiting providers to locally licensed companies.
Only a few providers are able to boast authorisation across most jurisdictions and local regulations make it virtually impossible for international health insurers to obtain licenses in their own right. If you’re operating in these territories it may significantly limit your options, or it may mean that a separate international health care scheme might be necessary for certain territories.
- Geographic territories
Not all insurers are willing to underwrite expatriates in risky territories like Iraq or Afghanistan and others will severely load premiums for expensive regions like the US. Making sure you exclude territories you don’t need and have rock solid cover in high-risk areas is essential.
- Underwriting procedures
Options vary depending on underwriting procedures and the number of employees to be covered. If you have less than 10 employees you can usually choose between two options. Full underwriting requires each employee to provide details of their personal medical history. The Moratorium approach, will exclude pre-existing conditions for a moratorium period. For larger groups ‘Medical History Disregarded’ enables the group to be insured without any details of personal medical history and all pre-existing conditions will be covered.
- Pricing models with significant advantages
With up 80 employees, your international medical insurance will generally be offered on a ‘community rated’ basis, which calculates a rate based on similar companies in the insurance risk ‘pool’. If you have more than 80 employees, you may enjoy much more competitive premiums with an ‘experienced rating’ based on your group claims history. In providing international medical insurance for multinational companies we find that this approach tends to produce a lower premium per head than ‘community rating’ and gives the insured company more control.
Whether you are purchasing or renewing group international medical insurance, independent advice can help to ensure that you make the right choices in what could ultimately be a life-critical decision for your employees abroad. Bellwood Prestbury’s international health care audit can help you to get the best level of cover for your employees at the most competitive price.