Striking a balance with international healthcare

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• Expatriate healthcare policies typically differ from local policies in the level of cover they provide and the inclusion of repatriation services.

• A third category, the locally hired foreigner coverage, is now emerging in China.

• To manage the differences between categories, employers should ensure communicate clearly with staff.†

• Global employers should balance the needs of their workforce with ensuring they are fair in the benefits they offer to different groups of employees.

International healthcare provision in Asia can be a balancing act between expatriate and local staff, says Jennifer Paterson

Setting up and managing international healthcare provision for both expatriate staff and local nationals can pose a challenge for benefits managers, especially in Asia, where levels of cover can differ radically depending on the location. Alison Massey, marketing director at Now Health International, says: “In Hong Kong, it is much less of an issue because the provision of local healthcare is fantastic. But if I had employees based in a remote area of China or in Vietnam or Cambodia, it is likely they would want to seek treatment for some conditions overseas.”

Expatriate private medical insurance schemes typically include access to quality-assessed hospitals, full refunds on outpatient treatments, vaccinations, help with finding an English-speaking doctor, evacuation for medical emergencies, and repatriation services. The level of cover is usually higher for expatriates than for local nationals.

Kevin Melton, sales and marketing director at Axa PPP Healthcare, says: “A Western expat expectation from a health service tends to be of a higher level than a local in Asia-Pacific.”

Local nationals also have access to state healthcare provision but this varies widely. For instance, Taiwan, Japan and Korea provide comprehensive state plans employers supplement with medical cover. But in Malaysia, Thailand and Indonesia, employers typically provide a higher level of benefits due to insufficient state provision.

Supplementary healthcare provision for local nationals typically covers hospital treatment, outpatient services, and maternity and cancer care, so if an organisation employs both expats and locals, the plans will generally look the same. Chris Beardshall, global account executive at PMI Health Group, says: “A local policy does what it sounds like it covers staff locally, up to a local standard.”

Managing differences

To manage any differences, or perception of differences, among these employee groups, an employer should communicate clearly why these exist. Massey says: “It is two totally different target audiences. The key is making sure the HR manager considers how to communicate with staff and be consistent.”

Managing the local population comes down to an employer’s location, industry and management structure. Andrew Seale, regional general manager at Allianz Worldwide Care, says: “It comes down a great deal to the culture of the company and its global remit on how it handles local hires.”

Another challenge for global employers in Asia is how to balance the needs of the workforce against the fairness of what they offer to staff who are effectively in the same role. Melton says: “We are seeing local nationals in more senior positions offered similar healthcare packages to expat. Employers are trying to almost have a hybrid policy that matches those expectations, but in the same way a UK domestic product will have different levels of cover based on staff grades.”

In mainland China, healthcare plans for expats and for local nationals look quite different. A third category is also emerging: locally hired foreigners. These are people who moved to the country before seeking employment locally.

Greta Mikelonis, principal in Mercer’s Shanghai office, says: “Expat plans are written internationally and typically have full global benefits. Local cover integrates with China’s social medical system, and locally hired foreigner cover is a local policy with narrower geographic coverage but comprehensive benefits. Leading employers offer local executives a plan similar to a locally hired foreigner plan.”

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