Expat benefits: do you have the right coverage?

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Organizations that have employees stationed overseas face unique challenges in implementing a benefits plan that both adequately addresses the needs of the individual and the laws, culture and standards of the country.

Who to cover with an international plan:

Karen Principato, Marketing Consultant with MSH International, a third party administrator specializing in international insurance, said the decision to implement an international benefits plan is largely dependent on the length of assignment.

“If you have a Canadian that you’re sending out of the country on assignment, and it’s short term you generally don’t need to have any special provisions, your Canadian plan will provide for that person.”

She added that once an employee is given longer assignments, beyond around three months, that’s normally when an international plan is required.

The type of benefit plan provided also depends on the type of employee. For example, employing a local national, an employee working for the organization in their own country of origin - say a US national working for a Canadian organization in the US - generally can’t be covered by an international plan.  

Principato added that organizations should only consider providing for a local national through an international provider if they are in the minority.

“Say you have a number of people on assignment in the US including one US national,  that one US national can be accommodated in an international plan, but if local nationals are in the  majority you should really get a local plan,” she said.

Third country nationals, employees working for a Canadian plan sponsor outside of both Canada and their country of origin, should also be covered under a local plan.

Organizations are often tempted to offer comparable benefits plans to what is provided within Canada but it’s important to ensure the benefits provided are reflective of the local culture, laws and market. Some benefits offered within Canada may be unavailable, not as flexible, or simply not as valued overseas.

Principato said the plans may also need to be rich in benefits to entice employees to take overseas assignments.

“The employees being sent on assignment overseas are generally very important people within the company,” she said.“They generally have a lot of experience and a lot of knowhow and organizations want to reward these employees with plans that are very rich in benefits.”

Know what to include:

International plans typically include core benefits:

  • Medical and dental
  • Life insurance
  • Accidental death and dismemberment
  • Long term disability
  • Retirement benefits

It’s also important to consider an EAP tailored to the regions local social, economic and cultural factors.  Principato said an EAP is often more needed and more utilized by employees overseas.

“Employees working overseas tend to need EAP more. They are entering a different culture, sometimes with their family and there are certain stresses, culture shock for example, that come with that. It’s important to adjust and an EAP can really help.”

Coverage of medical evacuation may also be a necessary benefit not typically included in a Canadian plan.

Go with a provider well versed in the region:

A benefits administrator with expertise in the region is vital. Your administrator should be able to help you navigate local laws, areas of jurisdiction, statutory benefits, have a network of local, preapproved practitioners and be able to reimburse claims in a number of difference currencies.
Principato added that an international provider should also be aware of reasonable cost of services in the region.

“The costs for services vary quite widely around the world,” she said. “A heart bypass  in one country could be as low as $9,000 and as high as $50,000 somewhere else. Having an international provider who knows what is reasonable and customary is key.”

Non-core International benefits to consider:

  • EAP
  • Emergency evacuation
  • Relocation benefits
  • Language training
  • Expat family/spousal benefits

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