Buyer’s guide to private medical insurance (PMI) for expatriates

Private medical insurance for employees working abroad is likely to cost more and should be tailored to the requirements of each particular country, says Sally Hamilton

Private medical insurance (PMI) for expatriate employees typically provides cover for repatriation, evacuation and pregnancy care, as well as chronic and pre-existing health conditions and even organ transplants.

Inevitably, these extras mean premiums are in a different league from UK PMI. Whereas the average UK plan costs £600 to £700 a year, employers will typically need to fork out at least £1,000 for a starting-level expatriate scheme.

However, the cost of premiums depends on the country or region, the numbers of staff covered, the age of the employee and the level of cover required. Steve Desborough, a senior consultant at Towers Watson, says: “There are off-the-shelf plans for smaller numbers of employees. For bigger numbers [of staff] there is scope [for employers] to design their own policy with a provider. Premiums are likely to be based on the cost of treatment in the area.”

Employers should expect high premiums if they are sending employees to the US, Hong Kong or South Africa.

Mobile workforce
Rachel Floyd, operations director of specialist broker the PMI Health Group, says that an increasingly mobile workforce, particularly to the Gulf states, has sparked a sharp growth in demand for international cover. “Many of these countries have moved towards requiring compulsory cover for expatriates,” she says.

With potentially 192 countries to cater for, the expatriate PMI market is inevitably more specialised, so some employers will seek the advice of a broker or insurer with experience in the field. To help organisations choose appropriate plans and manage costs, providers now offer different levels of cover or menu-based schemes.

Floyd says: “There is no need to over-insure if a country has a good free health service. For someone moving to a EU country, [employers] would look at a plan topping up what is already available.” Tim Slee, sales director of Bupa International, says international PMI policies can be tailored for specific countries. “In Italy, an employee would not need evacuation cover, while for Kazakhstan, they would.”

Top-of-the-range plans cover most healthcare needs, including outpatient care and prescription drugs and possibly even dental care up to a certain level, as well as chronic conditions that would not be included in a domestic plan.

Cash limits
But employers do not need to offer the full-blown version if budgets are tight. Cash limits can be applied, specific drugs can be excluded, and treatments such as psychiatric or outpatient care can be removed from the plan. Employees can also be asked to part-fund treatments or pay an excess.

It is important for employers to ensure a plan provides at least the minimum levels of cover required by the host country. “Regulation is increasingly prevalent,” says Slee. “Employers need a compliant product. In Abu Dhabi, for example, you cannot be insured by a non-local business. We have an insurance partner there. Australia recently announced rules for minimum cover for those wanting work visas.”

If an employee’s contract remains UK-based, then the health policy premium must be taxed as a benefit-in-kind. Where an employee’s contract is in the host country, the rules differ, so employers should seek specialist tax advice.

Slee says UK-based top executives are increasingly requesting international plans because of the additional benefits they give, such as cover for chronic conditions.

Key facts
What is expatriate private medical insurance (PMI)?
This type of private medical insurance covers employees on overseas assignments. It often includes cover for repatriation, evacuation and pregnancy care, as well as chronic and pre-existing health conditions.

Where can employers get more information?
The Association of International Medical Insurance Providers.

Who are the main providers?
Aetna Global Benefits, Aviva, Axa PPP Healthcare, Bupa International, Cigna International, DKV Globality, Expacare, Interglobal, Medicare International, Vanbreda and William Russell.