As a general rule, expatriate foreign service allowances (FSA) should never be included in the base salary. One reason is that they may receive differing tax treatment. But most importantly, when they are removed from base at a later time, salary reduction perceptions may arise.

The general rule is to retain the expatriate employee on home country employee benefit plans. This approach (a) supports the home country employment relationship, (b) recognizes that the home country is where most benefit eligible events will take place (e. g. retirement) and (c) provides continuity of benefits for the employee.

However, home country medical and dental plans are difficult to use in foreign locations since they often will pay only on a reimbursement basis. The expatriate employee has out of pocket cost which may be substantial, and enrollment in host country medical plans is often very ineffective, since (a) they assume basic coverage by National Insurance Plans, for which the expatriate is not eligible, (b) they may provide a level of medical benefit significantly different from the accustomed level, and/or (c) again, they are single country defined and may not provide direct payment of major medical expenses incurred in returns to the home country.

For that reason, it is usually advised to enroll expatriates and their dependents in an expatriate health plan which generally will provide direct hospital and doctor payment, security alerts and guidance, as well as medical evacuation, on-line physician referral, and similar services.