Nowadays, most people are living longer at an ever-increasing rate. Due to the improvements in medical technology and other factors, there is a trend for people to stay in employment while well past traditional retirement ages. A question you may be asking yourself is how does an ageing population impact expat benefit plans? Let’s take a look at the graying of the workforce, and the likely impact may bring for mobile employee benefit plans.
A global ageing population
According to scientific reports, life expectancy increases over the past ten years outstripped the improvements in the preceding 20 years. Some reports showed that the Australians, Japanese and Swiss appear to be living the longest. Meanwhile, a survey from Zurich showed that the graying of senior executives at companies across Europe is well observed.
Employers should be prepared to employ an ageing workforce and seek ways to adapt working patterns to suit older workers. We have found that mining companies usually have an older expat workforce because the expertise required often means that only older employees can bring to the table the necessary experience and knowledge that is required for the overseas assignment.
Measuring the impact
Facing the challenges of the increasingly ageing workforce, the employers need to adjust the expat benefits packages offered to accommodate them. Out of all the benefits, international health insurance and group life insurance are at the top of the list affected. The inflation trend that we often see with expat health plans is between 9 and 13% per year. If you add an ageing expat workforce to the mix, expat employers can often see significant increases in premiums.
Employers are required to continue providing life and healthcare benefits for expat employees who are passing traditional retirement age. The cost of providing coverage for this older group may be high. On the other hand, because of pre-existing medical conditions and chronic illness, providing appropriate international healthcare coverage can be also a challenge for most of the insurance companies. As you would expect, an older expat workforce will have more medical issues and challenges, so obtaining an international health plan that disregards medical history is vital if you are setting up a group medical plan for your overseas employees.
The possible future trend of expat benefit plans
Expatriate employees will tend to be more affected by the changes of a global ageing workforce. While living and working overseas on assignments, expat employees are likely to be more dependent upon employer-sponsored benefits plans. Therefore, providing quality private healthcare and expat benefit plans for this group is increasingly critical.
A possible future solution for employers is to design benefits that can adapt to working patterns to meet the need of ageing, skilled employees, while at the same time finding ways to maintain cost. Employers may want to look at ways to manage the rising cost of expat benefit plans by changing benefit design. Such changes might include adding a deductible or increasing the coinsurance for related medical expenses, such as prescription drugs.
Unless your expat plan has more than 150 employees covered, your expat insurer will not release the detailed claims history as the number of employees is not large enough for your claims to be credible. For most expat plans, the claims experience will be fully pooled.
Get help from Expat Benefit Specialist
An expat benefit specialist can give you invaluable insight and support regarding your globally mobile employees’ benefit plans. Expat Financial offers several different international health insurance plans for expatriates across much of the world. We also provide excellent service before and after you purchase your international group insurance plan.
As a division of TFG Global Insurance Solutions Ltd, we are very experienced in sourcing group plans for multinational firms with expats in most area of the world. If you have questions about our international medical insurance plans for your expat employees or if you want to discuss your needs and produce a customized quote, please contact us or complete the quote form.