Expatriate Insurance China, What are the most important considerations?

Looking for group or individual expatriate insurance in China? What are the most important things to consider before you make a decision regarding insurance and employee benefits for expatriates in China?

First, working with the proper medical evacuation and assistance company in China is extremely important as not all international medical evacuation companies have the same capabilities to fly you out of China in a medical emergency, or get you to the nearest appropriate facility if you have a medical crisis. All of these companies will tell you about their great capabilities for expatriate insurance in China, but very few can arrange for quick and immediate life flights in most regions. You can't just "takeoff" or fly into China unless you want to be shot down!

When considering expatriate medical insurance in China, make sure you have a plan that allows access to the best possible care in China, as well as offers elective care back in the home country without special permission. There are several clinics in China that actually cater to expatriates, and expatriate healthcare in China is a whole lot easier if one can avoid the public Chinese hospitals and can stay in the expat clinics. To a U.S. citizen, the public Chinese hospitals are shocking to say the least.

Security for expatriates in China is becoming much more important. People have this image of China having almost no crime, and most areas are much safer than the U.S., however there are security issues in China that one cannot ignore if he/she wants to properly protect themselves and their family. Security in China may not always involve a kidnap and ransom insurance in China, but there definitely should be a security plan in place at all times. Look at this post, does this sound like China to you? It is.

Thousands of angry ethnic Han Chinese wielding clubs and machetes roamed this capital city of Xinjiang territory and engaged in sporadic revenge attacks against Uighurs after deadly riots Sunday.

This information is provided ourtesy of McKinley International Risk Management, an international insurance broker that specializes in expat insurance in China for individuals and groups

International Workers Compensation Insurance for Expatriates

McKinley International has put together four important items that need to be considered when purchasing international workers compensation insurance for U.S. expatriates or Third Country National Employees (TCNs).

When considering when to implement international workers compensation insurance:

1. What is the makeup of your group (U.S. expatriates vs. local nationals vs. TCNs)
2. Find out exactly what the existing U.S. program would cover, with U.S. workers comp insurance typically limited to U.S. expats, and local nationals and TCNs needing a new international workers compensation insurance plan.
3. If the U.S. plan can cover U.S. expats for foreign workers comp. find out all of it's limitations. There may be a period of time a U.S. citizen can spend overseas before the coverage would end. It would be unlikely a PA workers comp insurer will extend coverage to a U.S. citizen working in Japan for 7 years for example!
4. A solution for international workers comp will most likely cover U.S. expatriates and TCNs but not be appropriate for foreign nationals. Workers compensation insurance for local nationals would need to be purchased locally, or if they have a strong national health insurance plan, it may not be needed at all.

When looking at international workers compensation quotes, find out what other features may be contained or embedded in the quote. Some plans come with the ability to add all of the following:

• kidnap and ransom coverage / expatriate security
• medical emergency air evacuation
• political evacuation
• international liability
• international property and personal effects
• limited "traditional" medical coverage for travel not expat assignments.

International Risk Management Best Practices for Expats

In this post we would like to list the five most important items that make up international risk management best practices for expatriates. Unless all five are done, no organization can claim they are following international best practices.

1. Insurance programs for expatriates should actually be created for international exposures, and should not be home country or U.S. plans meant to work internationally. A square peg fitting into a round hole.
2. Expatriates should receive an expatriate policy and procedures manual also called and expatriate employee handbook. In fact, they should be asked to sign off on the fact that they received such a document.
3. Organizations with expatriates should have an easy way to communicate with new expats, and some sort of communication portal.
4. U.S. expatriates should not be treated the same as non-U.S. expats also called third country nationals, in the following ways: TCNs do not need a HIPAA plan. TCNs do not need access to elective care in the U.S. U.S. benefit law provisions do not need to be extended to TCNs like COBRA continuation for expatriates.
5. Expatriates should be given a list of voluntary products for essential insurance programs they will need during the assignment that the employer is not providing. For example, vacant homeowners insurance for expatriates. It's almost as important to point out what the employer is NOT providing vs. just what the employer is providing.

International Insurance Broker Consumer Guide

What to look for when choosing an international insurance broker or an international brokerage. First, remember why international brokers are necessary, because 99% of U.S. insurance brokers and consultants do not understand international benefits.

True, there may be some U.S. brokers that understand expatriate medical plans, but that is just one small part of being a total and full service international insurance broker for clients that may have 20 different international needs over a 10 year period.

When choosing an international insurance broker you should consider all of the following:

1. Do they understand both international disciplines; global employees benefits and global property and casualty?
2. Can they place insurance for all four classes of international employees; expatriates, third country nationals, foreign nationals, and global travelers? Placing admitted coverage for foreign nationals takes a particular expertise and may require local licenses.
3. What is their experience in international benefits. Any international insurance brokerage that has not been doing this job, or not been in the business for over 5 years will not be very experienced.
4. Ask about their licensing. Are they an international insurance broker licensed in multiple U.S. states and can they place admitted insurance for local nationals abroad?
5. Beyond international insurance, what is their experience on international service programs such as international EAP, international medical air evacuation, and security?

Working with the right international insurance broker can be the difference between everything flowing smoothly and a $100,000 uncovered claim showing up on your desk one day.

Expatraite Health Insurance Concerns

We have used this post to outline the most common problems with expatriate health insurance including both expatriate group health insurance and expatriate individual insurance. This is from the perspective of a U.S. benefit or risk manager.

First and most importantly, is the expatriate health insurance scheme offered by an insurance company that is admitted in the home office State of the employer. This means the expat insurance will be HIPAA compliant, and be in lock step with ERISA etc and other U.S. Federal and State laws regarding international insurance. This is critical if the expatriate population is composed of U.S. citizens vs. TCNs.

If the expatriate group is mostly TCNs, they will not need HIPAA compliant expatriate benefits of course, but the U.S. citizens in the group will. Two plans may be necessary

Although this is going away with most carriers, medical underwriting can be a problem for group sizes under 10, and more commonly today, under 5 expats. This means that the entire group of expatriates could be denied insurance if there is just one individual expatriate, or a dependent that has a serious health condition.

Finally, pre-existing condition limitations are a problem with some expatriate health insurance programs. Make sure you understand if the plan covers all pre-existing conditions on day 1, or there is a very restrictive clause, like a 5 year pre-ex lookback!

International travel medical insurance

When should employers provide international travel medical insurance to their employees that leave the country? In this post we will take a closer look at this issue.

The first thing employers should understand is U.S. medical plans are of little value when employees are outside the U.S. In fact, almost all "home country medical plans" are practically useless when employees travel internationally on business.

Because of the low cost of international travel medical plans, we believe that international blanket medical plans should be provided to any employer that has more than 10 employees traveling internationally, or any number of employees that spend more than 20 weeks in total abroad per year. Minimum premium won't be more than $2,000 annually.

International travel medical insurance is used to supplement the U.S. or home country plan while the employee is abroad. A typical plan design of an international group travel insurance plan may look something like this:

1. Major Medical Travel Insurance (global coverage): $100,000 benefit.
2. Medical Evacuation Benefit ($100,000 benefit) for international airlift
3. AD&D $50,000 over and above whatever the home country AD&D plan, or BTA provides.
4. Pre-existing conditions covered: No
5. Deductible: $100 then 100% thereafter
6. Coverage for U.S. outbound and foreign nationals inbound into the U.S. under the same program. If foreign nationals coming into the U.S. need additional insurance, these groups are sometimes split in two.
7. War-risk coverage. Perhaps, varies.

If employers have employees travelling to "safe countries" like Western Europe for example, employees can perhaps get by under the U.S. plan. However, for employees traveling to any country labeled the "third world," an international travel medical insurance plan is an essential. These plans are also absolutely essential for any foreign national leaving behind a national health insurance scheme.

Expatriate Group Insurance Should Begin Immediately

One of the biggest problems multinational employers make is waiting too long to establish expatriate group insurance plans like expatraite health insurance. Most of the good carriers that specialize in expatriate insurance begin benefit programs for expatriates at just two employee lives, even if there are no dependents.

Most global organizations don't think 2,3, or even 5 expats are a big deal, and they normally continue under the U.S. health program and other U.S. fringe benefit programs. Once the group starts to grow, other priorities at the company may push the expat project to the bottom of the list. Soon a company may have over 10 people living or travelling overseas under home country plans and this can become a ticking time bomb.

First, U.S. life and disability plans (or any home country plan if talking about TCN employees) may not pay claims if they discover the employee is permanently residing abroad. Many problems can come out of using the U.S. health plan including claims abroad seen as "out of network" and prescription drug claims denied by "not being on the U.S. FDA list" of eligible drugs.

A good rule of thumb is, for each expat an employer adds without establishing a formal expatriate group insurance plan, the chances of a major problem increase by 10 fold.