Our firm has worked with many companies and organizations with hundreds and even thousands of employees that have only one or two expatriate employees posted abroad. These firms are not able to adequately cover their expat employee and his or her dependents under their domestic plan and should not try for a variety of reasons. The human resource manager is often faced with a dilemma of where to find adequate insurance for the lone expat employee and may have limited experience or understanding of expat insurance, not to mention no expat insurance contacts. So what is a company or non-profit with only one or two expat employees to do? Let’s learn more.
What to do when you have only one or two expat employees?
Attracting and retaining expat talent for your firm’s global operations is not easy. Finding the right person to help grow your sales or run operations abroad is both challenging and rewarding. If you want to attract the best person for your expat position, it is vital that you offer him or her the best global insurance coverage possible. It may not be easy to match your existing domestic benefit plan coverage for an expat position, but it is possible to gather coverage that will meet your duty of care obligations and adequately cover.
That employee and any dependents who will also live abroad. There are many insurance coverage requirements if you are hiring an expat employee, but we will deal with the three most important ones: Life, Disability & Global Medical Insurance. Note that all individual policies are medically underwritten, unlike most international group insurance plans, so keep this in mind if you are sending an individual expat abroad. Also, there are significant pitfalls in covering your expat employees on domestic plans in the new country location that we have described in a separate article.
Global Life Insurance for Individual Expat Employees
Your company’s existing domestic benefit plan will most likely offer a multiple of annual income in the local currency, but most expatriates will be paid in USD or Euro and will expect to be covered for 1 or 2 times annual income if he/she should die from an accident or illness. There are not a lot of global life insurance options for individual expats, but our firm does have access to some excellent life insurance plans that can cover most expats around the world. The premiums will, of course, depend on the age, occupation, and location of the employee.
An employee being posted to a high-risk country such as Afghanistan will most likely have to obtain Accidental Death & Dismemberment (AD&D) coverage, which may also be an adjunct to the life insurance for some expats in more “safe” countries. The typical plans will exclude war and terrorism, but it may be possible to quote AD&D cover including war risk depending on the location of the policy and employer. Final premiums will depend on the health, age, location, occupation of the employee. Unlike a group plan that we can offer, it is possible that the employee won’t qualify for coverage.
Finally, in regards to that “consultant” that you are hiring or who is only working for you, it may be tempting to have him or her secure insurance coverage on their own, but many companies who employ consultants abroad are taking a risk. That consultant may be viewed as an employee should they only work for your firm and should they become sick, injured, or deseased while being posted abroad, your company may be held responsible regardless.
Expat Disability Insurance for Individual Expat Employees
One of the most important parts of your expat employee responsibilities is securing adequate disability coverage should he or she become sick or have an accident that will make it impossible for him or her to work. However, global disability coverage is often not secured by expat employers, and domestic workers compensation plans will generally not extend beyond the national borders. Unfortunately, the risk of a disability is extremely high for most persons under age 65, and this represents a huge liability and risk for both the employer and employee.
Part of your duty of care is to help the employee secure global disability coverage. Expat Financial offers an excellent individual expat disability insurance plan that can provide income protection after 3 or 6 months waiting period. The longer the waiting period, the lower the premium. We can secure individual short-term disability, but this can easily be self-insured by most employers. A long-term disability can not.
Individual International Health Insurance Options for Expat Employers
Many expat employers will have their domestic employees covered by private or public health insurance schemes or a combination of the two. However, most human resource professionals and their advisors will have limited, or no experience in the unique challenges associated with covering expat employees posted abroad with or without their family members. Some will keep the employee on the domestic health plan which almost certainly will not adequately cover the employee overseas to save costs or merely a lack of understanding of the domestic policy and requirements for healthcare while living abroad.
That is why it is vital for HR professionals to provide comprehensive international health insurance coverage that will meet your duty of care and other employment responsibilities. We have seen too many expat employers ask the employee to obtain his or her health coverage on his or her own, but you as the employer will be responsible should that coverage not be adequate. This can lead to a failed expat assignment, large unfunded medical claim or your prospective expat employee seeks a job with another employer. If the expat employer has more than 2 or 3 employees, Expat Financial can probably source a group plan, but under three most expat employers will want to secure an individual plan for that expat employee.
Most global medical insurance plans will cover hospital, out-patient care, wellness, and evacuation & repatriation. Some expat employers will also want to secure dental and vision coverage. If the employee has a spouse who may become pregnant, it is vital that you include full maternity coverage – however individual plans will have a 9 or 12 month waiting period.
While it may be tempting to obtain the least expensive plan, you do get what you pay for, and we recommend that expat employers secure the best possible coverage with or without a deductible to help lower the premiums. As noted above, the employee or their dependent’s health may impact the approval or coverage that is secured. Rates will depend on the ages, citizenships, health statuses, plan options, deductibles and country location of the expat employee and any dependents.
Most American expats will want a plan that adequately covers treatment in the USA, but this will mean a higher premium. If you have an expat employee posted in the USA or a nearby region, you will want to make sure it covers treatment in the United States. We have an excellent global health plan from Cigna where you or your employee can get a quote and even apply or expat health insurance.
Obtaining Individual Expat Insurance for that Lone Expat Employee
While you may want to turn to your domestic consulting firm or broker for the above coverage, it is very likely his or her firm will have insufficient experience in global life, disability, and health insurance – this is even the case with the large insurance consulting houses. Like most things in life, it pays to talk to an expat specialist firm, and that is where Expat Financial and its parent company TFG Global can be of assistance in understanding your organization’s international insurance requirements.
Additionally, we do not charge a consulting fee as we are compensated by the insurer with the same rates regardless. We also have long established insurance provider relationships and excellent service and support. We may be able to assist on other insurance matters related to your expat employees, such as kidnap & ransom and even business travel insurance for domestic employees who travel abroad. To learn more, contact us today if you are sending one, two or a hundred expat employees overseas to expand your global fortunes. We look forward to being part of your international relocation efforts.