Benefits and compensation are the top concerns of employees contemplating assignments in foreign countries, according to a recent worldwide survey.
As explained by Virginia Hollis, vice president of CIGNA International Expatriate Benefits, Wilmington, Del., employees need to believe that their health needs will be satisfied and that they will be able to live the same lifestyle abroad.
CEIB, a unit of CIGNA Corp., offers health, life, disability and business travel benefits to employers with expatriated workers. It also co-sponsored the survey, released in March, that assessed employer/employee perspectives on expatriate assignment issues.
Hollis indicated that, in terms of benefits, companies transferring employees abroad have three options: continue coverage under the “home country” plan, provide coverage under the “host country” planwhich may have to be supplemented with private individual coverageor offer a separate global plan designed specifically for expatriates.
She said that a home health plan is beneficial if an expatriate is leaving a spouse or other dependent behind in the home country or if the expatriate will be returning to the home country. In those instances, coverage would continue under the plan that the employer already has in place, she stated.
Hollis noted that the home country plan can be the least expensive option if the employer has a large “domestic population” into which the expatriate can be rolled for coverage purposes.
But as an example of the downside, she pointed out that U.S.-based CIGNA could not insure its local workers in Brazil and instead would have to cover them through a Brazilian insurer.
Under a host country plan, an expatriate is covered under the national health scheme of the country of relocation. Thus, a U.S. employee sent to Britain on a worker’s visa would be covered under the British national health plan, Hollis stated.
She added that a host country plan can be a low-cost option for an employer because national health schemes are funded by taxes.
Unfortunately, however, national health schemes generally have long waiting lists for services, including elective surgery and vision and dental care, Hollis said. She explained that up to 25 percent of the local U.K. population purchases a supplemental plan that allows them to “jump the queue” and not have to wait for service.
Under the global plan, expatriates are considered a unique group with unique needs because they are on the move, Hollis indicated.
In fact, the CIEB-sponsored survey found many of the responding employees to be on their second foreign assignment.
Hollis explained that the global plan provides a range of services, including a multilingual staff and accessibility 24 hours a day, every day. Expatriates who call CIEB speak to a live person trained to answer questions about coverage, filing claims and payments, she said.
“We also pay hospitals and facilities all around the world,” Hollis revealed. For an expatriate with out-of-pocket expenses, there is a simple one-page claims form, she stated.
She added that employers can buy benefits as a package or as stand-alone coverages.
ACE USA’s division known as U.S. International, based in Philadelphia, offers employers several property and casualty products useful to expatriates, stated Larry Boyk, senior vice president of underwriting for USI.
USI’s basic offering is voluntary workers comp, he said. The coverage is available when a U.S. worker traveling outside the country is injured on the job and stateside workers comp benefits do not apply, Boyk explained.
Although an organization can purchase voluntary workers comp as part of a package, the coverage is generally purchased on a stand-alone basis along with the other coverages, he stated.
General liability insurance is another USI offering. The coverage applies to an individual employee’s liability arising out of employment when traveling abroad, Boyk said.
He added that USI has carved out a niche by offering kidnap and extortion coverage geared toward smaller companies. He defined “smaller companies” as “the emerging multinational” or organizations contemplating expanding abroad that have not yet set up overseas offices.
Boyk further explained that K&E coverage generally applies to small exporters and “sales travel” exposures.
USI also offers travel assistance. Boyk said this includes advising expatriates on vaccinations needed for certain countries and on the political climate that can be expected. He added that security assistance also may involve evacuating expatriates from a country in political turmoil.
Hollis said that CIEB has seen the expatriate benefits business grow steadily as an existing book of business over the last 10 years.
But she and Boyk reported that the business has slowed due to the economy. The slowdown, Boyk said, is “not too drastic, but it’s noticeable.”
Hollis noted that a few companies are actually recalling employees from abroad. However, employers are more likely to cut home country worker staff before letting go of expatriates, she said.
“Generally, if people have a beachhead in another country and they’re trying to get a business started there, [an expatriate is] one of the last things they’re going to cut,” Hollis explained. This is because it takes three to five years in a foreign country “to make a difference,” she said.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 8, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.