Supporting the Globalization Initiative

Crafting a Global Health Insurance System
for the
New Offshore Paradigm

By Tamara Stephenson
Insured Benefits Practice Leader


Notes From Our Client Files:

A NEW BUNDLE OF JOY

For one of our systems clients Martha was a key contributor to their new Argentina operation. Technically excellent and a top client manager, Martha was the spark plug of a major new business initiative; the Argentina partner wanted no one else on the case. And Martha was looking forward to returning to the United States in a couple of months for the birth of her first child.

On a rainy night in May, Martha rushed from her hotel to the Buenos Aires hospital suggested by the doorman. Clearly the baby was on the way. At the hospital the staff was concerned and solicitous and gave her a comfortable seat in the lobby until she could demonstrate to them some form of guaranteed payment. Waving her US medical card provoked puzzled looks, and her VISA balance just wasn’t up to the task.

When Martha woke her Executive VP in the US, and she woke the head of HR from a deep sleep, the fun potential of the situation had evaporated.


JUST A LITTLE TWINGE

Gunther had noticed a little stomach discomfort on his flight from Frankfurt to Hanoi. Nothing to be concerned about, what with a major hardware sale in the offing … until his appendix made its presence known at the conference table. His strategic partners made the decision and he was rushed to a local doctor who sent him to the local hospital. Gunther called his employer from the gurney where he was being prepped for surgery … but no one in Hanoi medical practice had as yet spoken to him in a language he could understand. Great faith is a blessing, but Gunther had a need to know what they were planning to cut out of him….

Oh, and it was several weeks before it was discovered that Gunther’s German Opt-Out health coverage had no foreign treatment coverage provision.


The Emerging Global Dynamic

The successful organization today is more global than ever in orientation.

  • Foreign market products sales and marketing are critical to business development more than ever.
  • Offshore outsourcing of a wide variety of company functions … from call center and customer service to research and development … has become a competitive necessity.
  • With frozen hiring budgets and “make do with what you have” a consistent theme, companies are more and more sending trained executives and staff on short or long term assignments to foreign locations as a cost effective alternative to adding new staff
The reality of this new environment is that
  • Dynamic companies need to utilize US and foreign employees (Third Country Nationals/TCN’s) in foreign country locations on an immediate basis. Often these employees are in a foreign location (perhaps with accompanying spouses or dependents) long before Human Resources and Employee Benefits staffs become aware of the fact.
  • Employees are sent “as they are”, without extensive regard to medical service needs or pre-existing medical conditions.
  • More and more experienced staff is being assigned for longer periods for such purposes as startup of outsourcing operations, training of local country national employees, and developing new markets.

The Global Coverage Challenge

The multinational employer is confronted with two important and related global medical plan needs.

  • Substantial emergency medical coverage for business travel and short term assignments.
  • A comprehensive home country level health coverage plan for employees and dependents who are on long term assignment in foreign countries.

The US or home country health plan usually falls short in a number key areas in meeting these needs.

  • Generally these plans, if they cover foreign treatment at all, do so on a reimbursement basis. This leaves the employee or the employer to pay the bill up front.
  • These plans provide little or no assistance in selecting a medical provider in a foreign location. “Heart specialist by Yellow Pages” can be an exciting experience.
  • As less developed countries become more attractive locations to companies, medical evacuation becomes more of an issue. Home country plans generally do not provide this service.
  • The little things can kill you. A traveling executive who is spending most of the visit finding the local equivalent of a needed US prescription drug can slow down the deal. Home country plans are usually no help with this.

Crafting the Global Solution

The comprehensive solution involves two distinct, but allied programs

  • A short term Business Travel accident program for the short term traveler and assignee, and
  • A long term comprehensive program meeting the complete needs of expatriates and TCN’s.

Both programs must have the important features of

  • Direct health provider service payment in foreign locations, as well as reimbursement if required.
  • Complete on line and “800” number 24/7 health provider referral and evaluation.
  • 24/7 coverage for all types of situations
  • Medical evacuation coverage through a reputable vendor.
  • Employee and dependent coverage
  • Up to the minute security briefing and assistance in these troubled times.

The short term Business Travel Accident program must have the features of

  • Blanket Coverage – Enrollment by name just isn’t an option. No one is going to remember to tell the Benefits Group that Joe will be in Iceland for a week or two.
  • Ease of Use – The system must be seamless and supportive of the traveler. Maybe the home country plan can bury the employee in forms, but the traveler needs to make one call and get results.
  • Flexibility and Reasonable Duration – Just because we thought Rashid would be in the US for two weeks doesn’t mean he won’t be needed there for four months. Short duration plans can defeat the whole purpose.
  • Spouse and Dependent Coverage – Company policy not withstanding, spouses to do get to go along more than we believe. “She isn’t supposed to be there.” isn’t the productive response needed to a foreign emergency situation.
  • Sojourn Coverage – When your employee is on a business trip to Switzerland, telling her that her skiing accident is not covered as “diversion and frolic” means you have the wrong plan.
  • Immediate Security Updates – For the employee booking a flight home through Pakistan or Turkey, or London for that matter, authoritative and immediate security updates are more than a reassuring extra.


The long term Expatriate/TCN program must have the features of

  • Coverage Comparability - Precise replication of home country coverage levels. Foreign assigned employees and dependents do not respond well to coverage differences from home levels.
  • Active Case Management – For the US employer, foreign country treatment is often less costly than US treatment, and plans are priced accordingly. But that does not mean that case management and cost containment is any less important.
  • Effective Home Country Coverage – Just because they are assigned to Bangalore for two years doesn’t mean they are not going to need services at home. “Also-ran” home country coverage and networks can be a nightmare for the plan administrator.
  • Meaningful COBRA Coverage – One thing that is true of most plans is that they just don’t want the COBRA ex-employee. The plan selected must be a viable COBRA vehicle if required.


But equally important, both plans must be

  • Cost effective in both premium and coverage
  • Administratively efficient and effective for the employee and the employer
  • Neatly integrated with home country coverages and global benefits strategy

The emerging global strategies of many companies present unique challenges for the employee benefits professional. Not the least of these challenges is to develop a proactive, effective global program for meeting medical and related needs in a dynamic organization … that is, before Martha calls in the night.

 
    Tamara Stephenson
Worldwide Consulting Group LLC
tstephenson@worldwideconsulting.com
(01) (505) 737-5504
     
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