Offshore Finance Canada Article
As Published in Offshore Finance Canada Magazine – September/October 1998 Vol. 3, No. 5
International Expatriate Benefit Plans (For Individuals)
By David G. Tompkins
While working or living offshore, expatriates are exposed to the same or greater health risks that occur in North America. However, they do not have the benefit of their Canadian Government health care system or U.S. private health care plan. Falling ill in some far off land is distressing enough without the worry of who is going to pay your health bills. Such medical bills can run into the hundreds of thousands of dollars. Some medical facilities are often reluctant to provide treatment without receiving cash or an ironclad promise to be paid. Finally, if while traveling from your offshore country you happen to fall ill or injure yourself, you will require medical travel insurance or even evacuation if the facilities are inadequate. Some expatriates are able to become part of the local government health plan if they satisfy certain residency and immigration requirements. However, as many Canadians know, such government plans, especially in second and third world countries, are often inadequate, rife with long waiting lists and cover only basic medical needs. Of course, many counties which expatriates travel to have no government health plans or in some cases not much of a government. Self-insuring is impossible as even a small illness or injury can bankrupt a person. All of the above points to the requirement for expatriates to purchase adequate health and emergency medical evacuation coverage that suits their needs and budget.
Several multinational and specialty insurance companies have met the offshore health insurance needs of expatriates with international medical coverage plans. Companies such as BUPA, ASN, SOS, Medex, Aetna, GAIN and Lloyds have developed varying plans from basic to deluxe.
Hospital plans and coverage
Most plans will provide in-patient care, which is a technical term for in-hospital treatment. Such expenses include hospital accommodation, surgeons, anesthetists’ & physicians’ charges. Consultations in radiology, pathology, oncology and radiotherapy can also be included. The more enhanced plans include some outpatient charges such as specialist fees including therapies such as acupuncture, osteopathy, physiotherapy, homeopathy. Some plans also offer coverage for primary consultations and primary care including a certain amount of prescribed drugs. Local road ambulance is included in most basic plans. Nursing at home and emergency dentistry are also options. These plans are generally called hospital plans because they usually cover in-hospital treatment only. More comprehensive plans are available to cover, in addition to the above, a wide array of outpatient care. Such expenses include: psychiatry, organ transplants, rehabilitation, home nursing, childbirth, home delivery, general practitioners consultations, eye & ear specialists, other specialist services such as dietetic guidance, vaccinations, lab tests and analysis, x-rays, scans, EKGs, hearing aids, physiotherapy, chiropractor, osteopath and a certain amount of prescribed drugs. Such plans are usually just over double the cost of a hospital plan. Those who are accustomed to using a government-sponsored plan as exists in Canada, may want to purchase such a comprehensive plan.
Wide array of options
In terms of coverage, most plans cover expenses at 100%. Others have the option to have the insured pay 20% of the costs. Most plans have the option to include a $500 or $1,000 US deductible, which also helps to lower the premium costs. All plans have a maximum coverage ranging from US$500,000 to US$1 million per year. The expatriate plans generally have the option to add emergency travel medical and evacuation coverage for an extra fee. This coverage is highly recommended and the cost is quite reasonable. In one case, a Canadian client was traveling in Mexico and suffered a heart attack. He was rushed to the local medical facility to be stabilized and was then evacuated in a specially designed medical jet to the United States for treatment. After a few weeks and a successful treatment, the total cost was almost $300,000 Canadian. The insurance company paid everything except a very small portion which was paid by the province in full.Almost all evacuation options include a global service network in association with a specialist evacuation partner, such as SOS or Medex. The plans provide for immediate transportation from any location in the world to the nearest centre of medical excellence for in-patient treatment of emergency conditions. The emergency evacuation plans usually cover the cost of reasonable return fares to your own country of residence after recovery. If the expatriate dies, their physical remains can be transported home at no charge.
Restrictions and exclusions
All expatriate health plans have some restrictions and exclusions. Some common exclusions are for pre-existing conditions which were know before being insured. If you have an expatriate plan already and you have suffered a condition that may reoccur, such as a back injury or cancer, you should avoid changing your coverage. Other exclusions such as cosmetic treatment, naturally occurring conditions like menopause, sexually transmitted diseases, abuse of alcohol, intentional self-inflicted injuries and the standard war and riot events are not covered. Most plans do not cover maternity or childbirth. However, there are a few health plans which will cover a normal or complicated delivery with a waiting period of 12 months after the policy is put in force. Others will cover maternity if the insured becomes pregnant after becoming insured. An elective caesarean is covered up to a certain maximum. Of course, if you are not planning to have any children in the future, then this exclusion is of no consequence and you can enjoy the premium savings as a result. One should note that a complicated pregnancy can be very expensive and unwise to self-insure.
Premiums and fees
The obvious determinate of an expatriate’s premium is his/her age, rather than the sex of the applicant. Most plans have premium bands of 5 years with coverage available up to age 100. Premiums for people over 65 are often priced on the basis of the application. Another factor in the price can be whether the expatriate wants worldwide coverage excluding or including USA and Canada. Because of the high price of healthcare in the United States or while not insured under a government plan in Canada, the price for expatriate coverage including these two countries can be as much as three times the cost. Such a plan is recommended for offshore residents who travel back to the USA or Canada for extended periods that would not be covered in the optional medical evacuation plan. The offshore applicant can easily add their dependents under his/her plan for an additional charge. Some plans even cover children under age nine for free with newborns covered from birth. The applications always have medical questions to be answered. Administration and service after the expatriate has taken out a plan are crucial elements. The plans can be paid for using a credit card, cheque, wire or bank debit. Most plan’s premiums are payable in either UK Pounds Sterling or US Dollars either yearly or monthly. A savings of up to 5% can be attained if you pay annually. A four-month waiting period may apply if you were not covered under another plan, except in the case of an accident or an emergency. In the event of a hospital claim, the insurance company should be promptly notified using their 1-800 number. This helps prevent any misunderstandings with regard to the coverage of the insurance. With other expenses, original bills can be submitted directly to the insurance company. The plans will cover almost any recognized medical facility and you can choose any doctor you wish. Claims can be settled in any currency wherever you are in the world.
Expatriate plans are fully portable, except when you return to your originating country of citizenship for a permanent relocation, such as the United States or Canada. There are very few plans that will cover you if you return to the US or Canada because of the regulatory statutes and cost. Nowadays, we all try to live a relatively healthy lifestyle while avoiding unnecessary risks. Offshore residents, however, know that purchasing health coverage is a vital part of their financial security. Neglecting such a vital safety net can result in financial ruin.
David G. Tompkins, B.A., of the Tompkins Financial Group is a Chartered Life Underwriter (CLU). He has worked in the insurance and financial services business since 1991 and is one of the few international insurance brokers in Canada. David is a member of the Canadian Association of Insurance & Financial Advisors and the CLU Association of Vancouver. He may be reached by telephone at (604) 913-1150.
Note: The policies we offer are not available via TFG Global Insurance Solutions Ltd. or its related web sites to citizens currently residing in the USA.
As published by Offshore Finance Canada – reproduced & posted on web with permission.