About International Workers Compensation Insurance for Expatriates (Foreign Workers Compensation Insurance and DBA Insurance)
We are asked a lot of questions about how well U.S. based workers compensation plans cover foreign risks for expatriates. The answer is, if international workers compensation insurance is required depends on the issues discussed below. In most cases international workers compensation insurance is necessary. Hundreds of companies are exposed every year by accident.
If you don't have time to read all of the following on international workers compensation insurance please simply contact us using the tab above. We would be pleased to speak with you and will not withhold information in return for consulting fees. We almost NEVER work on a consulting fee basis for international workers compensation insurance.
An international workers compensation insurance plan is always recommended for the following reasons.
We don't often lead a discussion with price, but international workers compensation insurance is just too inexpensive not to have for ALL expatriates and for international business travelers. This line of insurance with carriers is more formally called foreign voluntary workers compensation insurance.
For U.S. expatriates and travelers, a foreign voluntary workers compensation plan will take a secondary position behind State mandated workers compensation benefits for the State in which employees came from or were hired from before taking an international assignment.
Do expatriates still have coverage under the residence State workers compensation plan? The answer is it depends and in some cases the answer is yes. However, even professionals at insurance companies that underwrite international workers compensation insurance often cannot give you a good answer. Global employers may have to buy this insurance "just in case" for U.S. expatriates but international workers compensation insurance is a necessity 100% of the time for Third Country Nationals, even those enrolled under an expatriate group health insurance plan because almost all of these international employee benefit programs are non-occupational.
A Blanket International Workers Compensation Insurance Scheme (foreign workers comp insurance) is useful for travelers AND expatriates.
Employees may reside in multiple U.S. States, or have come from various States before traveling or working overseas. It can be very hard to predict exactly where the U.S. workers compensation program will cease to provide coverage however, we do have some general rules where it's reasonable for one to assume there is no longer coverage under the U.S. State workers compensation program and international workers compensation insurance is needed.
Defense Based Act Insurance for U.S. Government Contractors with international projects
Those sending employees to work internationally for a U.S. Government contract (ie. a State Department or DOD contact) will need to secure Defense Base Act workers compensation insurance also called DBA work comp. insurance. Basically defense based act insurance is regular international workers compensation insurance "enhanced." It's a higher level of benefits and protections for employees working overseas as part of a U.S. Government contract. Here is the biggest question often asked about DBA insurance.
Is Defense Base Act insurance only for U.S. citizens working abroad?
No, DBA has to be extended to third country nationals and even local nationals working on a U.S. government contract.
When is an international workers compensation program almost always needed.
In this case it's easier to start from the other side and say who probably has no coverage under the U.S. workers compensation insurance program.
- Local nationals working inside their home country (the exception is DBA or defense base act insurance (see the gray box on the right).
- Third country national employees also called non-U.S. expatriates. A French national working in Sudan will not quality for the U.S. workers comp policy.
- U.S. expatriates where the master U.S. workers comp policy comes from certain carriers, or from certain States. Some carriers just won't take the risk. In some states, there is no free market place for workers comp. insurance provided by the private marketplace.
- In some cases, U.S. expatriates that have been working overseas for over a certain period of time. A expatriate who has been working in Poland for 5 years may not be able to file a claim under Pennsylvania State benefits, and State insurers.
- Expatriates in the process of being localized in their assignment country or who have been localized will not qualify for coverage in most instances.
Please note, international workers compensation insurance plans are written on an annual basis. If your organization is just sending a few employees overseas for a short period of time, there are international insurance policies that will cover trip travel and NOT have an occupational exclusion. "A poor mans" international work comp insurance program if you will. These policies provide medical and medical evacuation only and will not mimic the statutory requirements of home State work comp law which may be required for full time expatriates leaving the U.S.
McKinley International Risk Management is expert in helping clients protect their foreign on-the-job injury and illness exposures with good international workers compensation insurance.
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