As a carrier representative of international health plans, I often ask myself what brokers want. How can I help them? And what my products can do for them. Over the last five years in this business I have determined brokers want differentiation from their competition, to attract more prospects, to obtain more new clients, and ultimately position themselves for more income producing opportunities. It is my belief international health plans can help brokers meet all of these objectives by placing them in a marketplace with little competition, that pays higher commissions than domestic plans, and can provide them with a back door approach to new group opportunities.
What are International Benefits?
The international benefits market consists of both individual and group products for a host of needs. Individual policies include travel medical policies, major medical policies, accidental death and dismemberment, and term life plans. International group benefit plans are comprised of employer sponsored health plans for U.S.-based organizations with employees overseas, including expatriates, third country nationals, or local nationals.
Individual policies can be broken out into two categories: Short- and long-term needs. Short-term plans are typically sold to people traveling internationally.
While traveling abroad there are two things an insurance policy can protect. You can purchase a plan to protect your financial investment through travel insurance commonly referred to as trip cancellation insurance, and you can purchase a travel medical insurance policy that provide protection should you need medical attention or become ill while traveling outside of your home country. Because most travelers purchase trip cancellation products from a travel agency or as an add-on to their flight, we'll focus on travel medical insurance protection.
International group medical plans are typically sold to cover a short-term need or for more permanent situations. Short-term needs consist of travel medical group plans and blanket travel medical plans. Long-term and more permanent situations require an employer sponsored health plan that acts much like a U.S.-style group health plan. These plans typically cover pre-existing conditions, maternity, wellness, and most plans qualify as creditable coverage once an employee returns to the United States. Premiums are collected from the employer and can be paid monthly, quarterly, semi-annually or annually.
Who Buys It?
International plans can be sold in a host of situations. Individual plans are commonly sold to families traveling abroad on vacation, a church group on a mission trip, a foreign exchange student in the United States, or to a business executive who travels abroad. International group plans are simply sold to U.S.-based companies with employees abroad.
A common misconception is that in order to sell international plans you have to find large global corporations with thousands of employees. In fact, this is not the case. Many of the international benefit plans I work with are small to medium sized U.S. companies. These companies include mission-sending organizations, non-governmental organizations, consulting firms, schools and universities, and aviation companies.
Long-term individual plans are sold to U.S. citizens residing outside of the country, non-U.S. citizens living in the United States who are not eligible for domestic insurance, and on occasion to local nationals living within a socialized medicine scheme wishing to opt out of that particular system. Because these plans provide worldwide coverage, many Americans who live in the States part time and have a house outside of the country purchase international major medical plans that provide them coverage while they are living in the States, as well as enjoying their home on the beach in Mexico, for example.
Many of your clients mighy not know they have a need for travel medical insurance. I often hear consumers and even brokers declare domestic health coverage should take care of them if they happen to have an event while traveling overseas. There are however, a few things to keep in mind. Most U.S. health insurance plans do not provide any coverage overseas and those that do provide coverage overseas are not equipped to deal with serious events such as emergency medical evacuations, language barriers that may exist during an event, or the fact that many providers overseas demand payment up front. Additionally, it is important to note Medicare does not provide coverage for medical costs or hospitalization outside of the United States.
Part of my job is calling on brokers and agents across the country and introducing them to International Benefits. Frequently I speak with group health brokers that tell me they have no need for international health plans because all of their clients are in the United States. What those brokers haven't considered is U.S.-based employers regularly send employees overseas on short term trips. Whether they are doing due diligence on an overseas company or sending sales executives abroad to close a deal, the fact is every day U.S. employers are sending employees overseas without adequate medical coverage.
Obtain More Business
Earlier I mentioned a back-door approach to more group opportunities. What I mean by a back door approach is there are thousands of employers in the United States that are sending employees abroad without proper medical protection. Clearly, the companies that have offices abroad permanently employing foreign nationals or local nationals have and international medical scheme to provide coverage in those situations.
However, an overlooked market is employers that send employees overseas on periodic short-term trips. When an employer chooses a broker of record they have the reasonable expectation that their broker is going to ensure they have provided all necessary coverage for their employees and there are no gaps or exposures. Often times, because many brokers do not realize typical domestic insurance plans do not adequately cover a U.S. citizen abroad, they have failed the employer on the basic premise of eliminating exposure. As a broker armed with international health products, you can identify those employers and show them a way to satisfactorily cover their employees while traveling abroad. Once you have adequately mitigated that exposure, you should begin a new relationship with that company. Not only will you sell a few international medical policies, but more importantly you are in the door and may have an opportunity to quote their entire benefit plan at time of renewal.
How are the plans supported?
Now let's look at the nuts and bolts of international health insurance plans. Although a growing market, there are a limited number of companies that provide international health plans. A simple Google search of international medical insurance will yield you a host of online brokers and carriers provide benefits. The plan designs are very simple and tend to be similar from company to company. After some research and time spent studying the options you will begin to see slight differences in policies. However, to the consumer the plans are extremely similar.
Many of the international benefit carriers are relatively young, with many of them popping up in the 1990s; they have grown up alongside the Internet. These companies have become very adept at selling insurance online and have some of the most user friendly quoting and purchasing tools in the insurance industry. Most all of the carriers will provide brokers with online quoting and purchasing tools that can be hosted on a Web site or emailed to clients. These quoting links are embedded with a refer ID that notifies them that a particular broker has sold said policy and commissions are paid accordingly.
In the individual market as many as 85 percent of the plans by brokers are sold online using a quoting link. This certainly does not mean you have to have a Web site or know how to do Web site optimization in order to sell international benefit plans; particularly in the group market. Although there is a "Go Green" motif amongst many online retailers, all of the international carriers are prepared to provide brokers with traditional sales materials such as brochures and marketing fliers.
In addition to providing quoting tools and brochures many international carriers are eager to provide co-op marketing dollars to brokers wishing to grow their international business. Good marketing opportunities exist in trade-specific publications geared to international employers and HR managers, newspapers targeting expatriates, college and university journals, and trade shows. Typically, carriers are happy to provide a 50 percent cost sharing venture in order to get their products in front of new clients.
Because the international carriers know most brokers' main focus will be on domestic coverage, they do not expect the broker to be an expert on these plans. Each international carrier has a sales team standing ready to assist you though the sales cycle. They are willing to listen to your needs on a specific client and direct you to the correct product, walk you though the purchase process, and, giving the opportunity to land a medium-to-large sized group, they will travel alongside brokers to present their products and services to the client. You may find many of the shelf products the carriers offer don't fit the exact needs of your clients. However, most carriers are willing to tailor-make a product that will fit your clients' needs and keep it within an expected budget.
Trends
One of the trends with international carriers is the development of international PPOs. A common objection an employer has is that many of the international plans are reimbursement plans. This means members are expected to pay the provider up front and submit itemized bills for reimbursement. As you might imagine, at times this creates various issues depending on the severity of the event and potential costs. In an order to mitigate those objections there is a current trend among providers to create world-wide networks and direct pay agreements globally. Some carriers have a solidified network, some are building their network, and some carriers have yet to begin building. It is fair to say these global PPOs are in an infancy stage. To further limit member exposure, carriers are willing to offer guarantees of payment depending on the event and are always wiling to verify benefits and accept direct bill from providers. It is recommended that you understand the carrier's policy and educate the client and its members accordingly.
In addition to building PPOs, carriers are now offering enhanced coverage options to draw in new members that include coverage for terrorism, natural disasters, political evacuation, hazardous sports coverage, wellness programs, dental and vision programs, as well as plans with no deductible and no co-insurance.
As a testament to the sustainability of the international marketplace, most carriers have reduced premiums over the past five years and continue to enhance plans to draw in more customers. Of most importance to drawing in more consumers is acquiring more brokers to market and sell the products. The appointment process is very simple and most often does not require any fee. Typical appointment paperwork consists of one page to complete and submit with a copy of producer license. Most of the carriers will turn the paperwork around in one business day and will generate an e-mail to the producer, providing a quoting link and access to any marketing materials. Standard commissions on individual plans range from 15 percent to 25 percent and group commission from 8 percent to 15 percent.
Evaluate your existing book
Now that you have a basic understanding of international health plans, its time to put this into practice. The first place to start is your existing book of business. Many of you have already considered the usual suspects, the large multinational corporations.
I also would encourage you to dig deeper. Identify the small company with four employees in Mexico that doesn't know they can have a worldwide health plan, identify employers that could send a few employees abroad for short-term trips, and identify the CEO that vacations in Punta Mita and thinks his or her domestic plan provides adequate coverage.
Bard is the regional vice president of sales for MultiNational Underwriters, a full service organization offering insurance products designed specifically to address the insurance needs of consumers worldwide. He can be reached at Abard@mnui.com.
