International business travel is so commonplace that it’s easy to overlook potential medical risks. However, high-profile news coverage of natural disasters, terror attacks and diseases such as Ebola, although extremely rare, have many companies taking a second look at international medical insurance.
“These types of events definitely make travelers think about things other than the usual accident and sickness coverage typically found in travel insurance plans,” says Lynne Peters, insurance product manager for InsureMyTrip in Warwick, Rhode Island. “It has raised awareness, which is a good thing for the traveler. They should be aware of the different issues that could affect their travel plans.”
InsureMyTrip partners with 28 U.S. and two Canadian providers to offer nearly 400 travel-related products.
The U.S. Travel Insurance Association (UStiA) in Rockville, Maryland, reports increased awareness and sales.
“Recent news stories do appear to have raised awareness of the need for medical insurance for international travel,” says Carol Walsh, executive director of the association. “In 2014, more than 152 million Americans were covered by travel protection through a variety of travel-related protection and emergency service products. The number of people covered has increased 17.6 percent from 2012, while the number of plans sold increased by 15.2 percent.
“Programs that include trip cancellation/interruption benefits account for more than 85 percent of the travel protection products purchased in 2014. Travel and medical evacuation products account for 7 percent of the programs sold.”
Although demand for international medical insurance remains relatively low, it appears to be growing.
“Travel insurance used to be a pretty limited product,” says Andrew Bard, vice president of sales for HCC Medical Insurance Services in Indianapolis. “But in the last decade, the industry has evolved and diversified, out of circumstance and economic necessity, stretching to include everything from basic medical coverage to medical and political evacuations and natural disaster-related complications.”
International medical insurance falls under the much larger umbrella of travel insurance, which includes such coverage as trip cancellation, rental car collision, hazardous activities, and accidental death and dismemberment.
“International group medical plans typically cover either a short-term need or more permanent situations,” Bard explains. “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 and wellness; most plans qualify as creditable coverage once an employee returns to the United States. Premiums come from the employer and can be paid monthly, quarterly, semi-annually or annually.”
Walsh lists the conditions covered in a typical travel medical plan:
Medical costs in case of accident or illness.
Emergency dental may be included.
Emergency transportation (medical evacuation and ambulance) is covered.
Repatriation coverage will ensure the body is properly transported home or to a funeral home nearby if an individual dies on a trip.
It may include some term life benefits or accidental death and dismemberment coverage.
It also may include some trip insurance benefits, such as coverage for lost or delayed baggage.
International travel insurance is still a relatively new product, but the number of providers is growing. Although most policies are sold online, many companies also work through brokers. Most products resemble domestic coverage, but several new wrinkles, such as international preferred provider organizations (PPOs), are being introduced.
“A common objection an employer has is that many of the international plans are reimbursement plans,” Bard says. “This means members are expected to pay the provider up front and submit itemized bills for reimbursement. There is a current trend among providers to create worldwide 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.”
In addition, he says, carriers now offer enhanced coverage options to draw in new members that include coverage for terrorism, natural disasters, political evacuation, hazardous sports, wellness programs, dental and vision programs, as well as plans with no deductible and no co-insurance.
Weighing risks vs. rewards
Employees of large, especially multinational, businesses may regularly travel internationally. In small businesses, it may be a rare occurrence, with an executive attending a trade meeting or working with a new overseas client. Regardless of the situation, the role of the human resources department is to evaluate the need for international medical insurance, and then find the right policy at the best price.
“Each company and HR professional needs to assess the specific risks for their company and determine the plan and policy that is right for their needs,” Walsh says. “Compare companies, policy coverage, benefits and prices to find out what is included and what isn’t when deciding what coverage is right for your company.”
This starts with contacting the company’s broker to see what the existing policy does and does not cover.
“Most U.S. health insurance plans don’t provide any coverage overseas,” Bard says. “Those that do aren’t equipped to deal with serious events, such as emergency medical evacuations, language barriers or the fact that many providers overseas demand payment up front.”
Next, evaluate who from the company will be travelling.
“Know your traveler,” Bard says. “Are there pre-existing medical conditions? How long will the traveler be away from the United States? Does the existing U.S. medical plan cover issues that happen outside of the country? Depending on the visa needed for travel to a foreign country, what are the requirements? The most common mistake is thinking that the company’s benefits package is good enough while traveling outside the United States.”
Then it’s time to ask the broker for recommendations or start shopping online. The Centers for Disease Control and Prevention suggests asking about a host of key topics, including exclusions for treating exacerbations of pre-existing medical conditions and the company’s policy for out-of-network services.
As with any insurance plan, it comes down to an evaluation of risk versus reward.
“Travel insurance is designed for the traveler who wants protection when they travel outside their home medical insurance coverage network,” Walsh says. “This is important, because expenses associated with a medical emergency can easily approach $100,000 for a serious medical problem.
“Our best advice is to consider the individual or company’s specific risks, and determine the specific coverage that is desired and then determine the plan and policy that is right for their needs.”
After determining the need and finding a reliable carrier, the final step is determining the amount of coverage needed and how much it will cost.
“It really does depend on the destination and potential risk,” Peters says. “For people traveling to a low-risk area, having a minimum coverage of $50,000 to $100,000 for emergency medical coverage, and $250,000 in $500,000 in emergency medical evacuation might make the traveler comfortable.
“But when traveling to a high-risk area, you really should have a high level of emergency medical and emergency medical evacuation coverage, possibly as much as $500,000 in emergency accident and sickness coverage and from $1 million up to an unlimited amount of emergency medical evacuation. But really, it all depends on the comfort level of the traveler.”
The price of the policy is based on the length of the trip, the destination and the age of the policyholder, according to the UStiA. Expect to pay between 4 percent and 8 percent of the overall cost of the trip.
HR professionals will be familiar with many of the big-name carriers that offer international medical insurance. Membership in the UStiA also is a good sign.
“Purchasing from a UStiA member company is your assurance that a company has met high industry standards, including participation in the association’s Code of Ethical Conduct,” Walsh says.
If a staff member is travelling for pleasure, think twice before purchasing insurance offered by a tour operator or cruise line. The coverage may be worthless if the company goes bankrupt, according to the American Society of Travel Agents. The association also recommends against buying from a travel agent, who may promote the policy that pays the highest commission.
Unless a business has assurance that its domestic policy will be in full effect overseas, the best advice may be the tagline from the old American Express commercial: “Don’t leave home without it.”
“A common mistake is having a question and not asking it,” Walsh says. “If you’re not sure if something is covered or not, or have questions about exclusions or limitations, ask the company.
“Like any purchase, it’s important to do your homework — compare companies, policy coverage, benefits and prices to find out what is included and what isn’t, when deciding what coverage is right for your company.”