Employers should check corporate practices and healthcare policies to ensure that staff working overseas are covered in the event of a serious illness, and that they are not left exposed, says Kate Donovan
While staff based in the UK can sometimes be somewhat spoilt for long-term healthcare provision, bosses must be aware that there can be gaps in the types and levels of cover available for employees who are working abroad.
This is because either there are difficulties, due to distance, in assessing claims or because the employee is subject to the corporate practices of the country in which they are working and cover is not so comprehensive.
Just as in the UK, staff who are based overseas may be covered by income protection and critical illness insurance. The latter comes into play if staff develop an illness of condition from a list of ailments traditionally known as “dread diseases”.
However, when it comes to providing such perks to staff who are based abroad, the need to monitor an employee’s condition should they have to make use of the products is just one of the difficulties employers face in what is a lesser-developed market than the one which exists for home-based staff.
Paul White, head of risk benefits consulting at Aon Consulting, explains: “For insurance companies covering an individual overseas for critical illness, [the claim] is largely going to be about the validity of the medical evidence, whereas for income protection it’s not only the validity of the medical evidence it’s also [their] ability to continue to monitor that condition.”
In some cases, an overseas HR department may take on responsibility for employees who move to work in their location. This responsibility can extend to providing expats with a locally-negotiated benefits package. If this occurs, however, benefits teams back at home should ensure employees are still covered in the case of serious illness.
Peter Eyre, leader of international health and benefits Europe at Mercer Human Resource Consulting, says that problems can arise where local benefits provision may not be as good as that which employees are used to at home. Employers can be left exposed if they do not check with their insurer that employees have been given the cover promised to them.
Paul Andrews, business development manager at international medical insurer William Russell, adds: “In the UK we have a very developed market. We have critical illness and [income protection] but there isn’t much of that in the international sphere.”
Income protection and critical illness cover, for example, are not recognised in all countries or may take on different forms. “For instance, the US version of income protection is completely different to the UK version and therefore you get a whole host of geographical constraints. So while a UK employer might offer long-term disability to [their] UK employees, the European equivalent of the firm wouldn’t necessarily have an equivalent benefit and that’s where it gets interesting,” adds White.
Having identified potential gaps, employers should either use an international provider or work with their home supplier to ensure employees on secondment have sufficient cover in place.
Insuring employees working in certain countries can prove more problematic than in others.
“I think carriers are suspicious of taking long-term risks for employees who they may not always have access to, or be able to get to for medical reasons, or there may be doubts over the medical certification, so there aren’t so many carriers doing this,” explains White.
Where an expatriate employee is diagnosed with a long-term illness the potential for employers to bring that employee back to the UK depends on how the employer manages the international benefits policy.
“It’s not always very well defined what [the employer’s] policy is and so deals tend to get brokered on an individual basis [for] the employee. That means you’ll get differences with each and every employee that goes out, maybe on a slightly different package,” says Eyre.
He adds that where staff remain covered by their home country’s plan, it is more than likely that they will return home. But this becomes more complicated for those who have either been placed on localised terms or are more internationally mobile. Whether or not an employer brings an employee back to the UK will ultimately depend what type of contract the expat is on.
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- Long-term healthcare cover for staff working overseas can therefore be a minefield, so it pays to check policy details.
- Employers can cover expats with income protection or critical illness insurance in case they develop a long-term or serious condition while working overseas.
- Employers must ensure the medical cover they promise overseas employees for long-term illness can be delivered, and that the same benefits exist in the country where the employee is working.
- Whether employers choose to bring staff that develop a long-term illness back to the UK will often depend on the terms of contract and insurance cover.