Post on 14-May-2018
transcript
Risk. Reinsurance. Human Resources.
Expatriate Benefits
Issues, Trends and Experience
Simon Ball & Linda Beavis
Aon Global Benefits
Proprietary & Confidential 1
Expatriate Benefits – Issues, Trends and Experience
Why are we discussing expatriate benefits?
Expatriates are by nature influential to the business success
Often accompanied by families
High expectation of duty of care from employer
Treatment costs can be very high dependent upon condition but difficult to predict
High emotive/sensitive issue
Wide range of expectations often centered on home country provision
Moral liabilities
Comply with local legislation
Staff retention tool
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Expatriate Benefits – Issues, Trends and Experience
Why are providing benefits to expatriates different?
Effective treatment procurement required to reduce future costs
Multi-lingual capabilities essential
24/7/365 availability required
Understanding of home country cover essential to manage expectations
Possibility of subrogation from certain EU based social systems, depending upon employing entity
Highly service led, very little
margin or volatility of risk
Highly emotive claim process
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Expatriate Benefits – Issues, Trends and Experience
Rising Costs Put Pressure On Company Budgets
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2013 2014 2015
Global Medical trend rate in
recent years
Drivers to medical inflation
– Soaring drugs R&D costs
– New treatment paths
– Litigation and insurance
High cost health issues
– Obesity
– Diabetes
– Life extending
Growing costs of private medical insurance
– European long-term healthcare black hole
– Utilization (and cost) hard to predict
– Single-year cost optimization or long-term control mechanism
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Expatriate Benefits – Issues, Trends and Experience
Treatment Procurement: The Details
What is treatment procurement?
Do insurers deliver it?
How will it look in the future?
Domestic versus international
Long-term cost control versus short-term savings?
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Expatriate Benefits – Issues, Trends and Experience
Market Trends
Trend Regional
plans
Multi benefit
schedules
Employee cost
participationUS exclusions
Pre-deployment
screening
Description
Global
expatriate plan
being split into
several
regional plans
Setting up more
than one benefit
scale within
single policy
Introducing co-
payments and cost
sharing with
employees
Remove US
coverage from
policy
Health checks ahead of
assignment
Rationale
Recognizing
expatriates in
different
regions have
different needs
Allowing for
various
categories of
expatriates and
overall growth in
covered
populations
Cost savings
Cost savings
Change employee
behaviour
Including
coverage within
the US increases
costs substantially
Additional cost
and regulatory
burden of
PPACCA
Ensure no hidden costs
ahead of assignment
costs
Understand total costs
of the assignment and
educate employee
Impact/action
Ensure global
plan fits needs
of Asia
population.
Ensure Asian
‘voice’ is heard
when design is
reviewed
Review existing
policy to ensure it
meets needs
Look to add
schedules if
appropriate
Carry out feasibility
analysis to see if
this is possible and
worthwhile
Analyze claim
patterns
Review policy to
see if US is
included or
excluded
Look into
feasibility of
removing this
Look to implement pre-
deployment screening
ahead of assignments
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Expatriate Benefits – Issues, Trends and Experience
Alternatives to formal expatriate benefit policies
Travel insurance International PMI
Suited to short term travel Suited to long term travel/secondments
Pre-existing conditions excluded Pre-existing can be included, depending on type of plan
Often based on employee cover but can be extended
to spouse/dependants
Open to employee and spouse/dependents
No preventative cover Health screens, vaccinations, preventative tests can be
covered
Pre-planned, i.e. maternity not covered Maternity can be included
Routine monitoring of chronic conditions not covered Chronic can be covered
No direct settlement for outpatient or small claims Direct settlement in many countries for in an out patient
claims
Lower cost Higher cost
Policy schedule and card with assistance numbers Full membership pack and literature with online claims
submission, card, assistance numbers and additional
member information
With the rising costs of international PMI, some are looking at
alternatives such as Travel Insurance, we have detailed below the
pros and cons of each approach based on expatriates needs
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Expatriate Benefits – Issues, Trends and Experience
Client Example: Large French Based Multi-National
Background
Results
Had not taken their scheme to market for a number of years
Concern raised over rising costs
Treatment procurement led tender
Compliance a major issue, OFAC and local compliance
Moved provider 1 January 2015
Auditable justification of move based on reduced compliance cost and treatment discounts
Savings circa 12% achieved over long-term
Administration costs reduced
Higher utilization of technology
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Pan European plans allow you to have one single policy to apply
across borders
They a provided by the insurer under the European Union Freedom of
Services act
These plans apply to all Risk policies – Life, Disability, Accident Death and
Disability, Critical Illness
They can cover all EU countries and some EEA countries.
They can be set up with as little as 2 countries and 5 employees
They enable you to obtain cover for very small populations in multiple countries.
By combining multiple country populations you can enjoy the benefits of a larger
scheme for your smaller headcounts
Expatriate Benefits – Issues, Trends and Experience
What Is A Pan European Plan?
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Advantages Considerations
Purchasing scale of regional population Cross-subsidies of underwriting experience across the region
Reduced policy administration and management - Simple
Accounting with breakdown of cost per jurisdiction
Single policy for the region and so different from pooling (in
particular no dividends)
Greater governance and control over all aspects of plan
management
If local policies have been set up this could mean loss of control
for local management over policy providers (design can still be
owned locally though)
Consistency of benefit policy for mobile employees Limited to EU Countries (and some EEA) for now
Allows for group terms where not possible on a country by
country basis
Limited to risk benefits for the foreseeable future
Competitive approach to ‘Free Cover Limits’ Claims are paid to the Policyholder for them to distribute locally.
Allows differences in plan design by country, allowing the
employer to provide market standard benefits
Policyholder responsibility to ensure correct taxation of local
benefits
Expatriate Benefits – Issues, Trends and Experience
Things to consider about Pan-Euro plans
Risk. Reinsurance. Human Resources.
Appendices
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Fruit bats, a delicacy for some West
Africans, are thought to be the natural
host, but various types of monkey can
carry the virus too
There is currently no proven vaccine or
cure but drug trials are being fast
tracked. As long as it proves to be safe
and effective, we hope a vaccine will
be available in 2015
Ebola is not new – the virus was discovered nearly 40 years ago
Expatriate Benefits – Issues, Trends and Experience
Current Issues: Ebola Virus
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The virus can be present in urine and semen too
Infection may also occur through direct contact with contaminated bedding, clothing and
surfaces - but only through broken skin
It is still unclear how long the virus exists on surfaces, however, it is thought that the
virus only survives for a short time outside of the body; particularly when it is dried onto
hard surfaces such as metal or glass. Bleach and detergent can kill Ebola
The disease is not transmitted through the air, like flu. Very close direct contact with an
infected person is required for the virus to be passed to another person
It can take between two and 21 days for humans with the virus to show symptoms
People are not infectious until the symptoms develop
People are infected when they have direct contact through broken
skin, mouth, nose with the blood, vomit, faeces or bodily fluids of
someone with symptoms
Expatriate Benefits – Issues, Trends and Experience
Ebola: Infection
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There is a current outbreak in West Africa
The chances of acquiring Ebola are very low
There is no specific treatment
Precautions to avoid infection can be taken
Carefully assess the need to travel to affected countries and
ensure adequate arrangements for onward travel are in place
Ebola is a rare, very serious viral illness
Expatriate Benefits – Issues, Trends and Experience]
Ebola: Key Points
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Costs of evacuation are extremely high
Medical evacuation air ambulances taking Ebola patients
few and far between
Contamination of non-infected countries a potential
corporate risk, isolation of returning assignees essential
Life and disability policy wording needs checking for Ebola
cover
No private facilities taking Ebola patients
Most developed countries exclude entry for
infected non-local nationals
Life and disability policies may not cover the risk
Travel insurances are of little value in the region
Evacuating every potentially contaminated person is financially
restrictive
Expatriate Benefits – Issues, Trends and Experience
Ebola: Key Points For Clients