Posts on Sep 2016

Group Cover v’s Individual Cover – Is one more beneficial than the other?

 

Many healthcare systems around the globe do not provide publicly-funded care and as such, medical treatment whilst residing abroad can cost thousands of dollars. An international medical insurance policy is designed to protect expatriates against significant, and sometimes financially crippling expenses. Having a suitable international medical insurance policy has become increasingly important as advances in medical technology result in increased costs of care globally.

Medical insurance plans not only provide financial security through covering the cost of medical care, but eliminate the risk of having to settle for low quality, substandard healthcare in an unfamiliar country.  Such plans ensure affordable access to care anywhere in the world in the event an illness or injury occurs. Some policies even include provisions for expatriates to be returned home at the cost of the insurer so that they can receive non-emergency treatment in their home country.  This is an attractive benefit if based somewhere remote and healthcare facilities are of a lower standard than those at home.

Cover can be provided either to stand-alone individuals or through a group policy.  So, in the battle between group and individual medical cover, is one better than the other?

Group Cover

About two thirds of expatriates globally are offered insurance by their employers or receive cover as part of a small group within an organisation. A group can consist of as few as 2 members through to hundreds of employees. In a group scheme, the insurer is basically spreading their risk across a number of individuals within the group, with some being younger, healthier and therefore low cost, while at the other end of the spectrum, the individuals might be older, already experiencing negative health effects and are high-cost.

Incentives are included in the majority of policies for larger groups, for example ‘MHD terms’ or ‘medical history disregarded’ is offered for groups of 10 or more staff which also in some cases, includes family members.  This means expatriates are able to join a medical insurance plan without a health assessment or having to divulge any medical history to the insurer.  Any medical conditions one might already have are automatically covered by the policy despite potentially exposing the insurer to greater risk.

This last point is particularly important for those who might already have experienced an adverse health event or developed a condition. Expatriates who already have a medical condition can face extremely high premiums on individual policies, so it will often make sense to join a group policy in order to avoid those higher costs.

From an employer’s prospective, arranging cover for staff safeguards the present and future health of employees, increasing wellness and decreasing downtime due to staff illness and injury.  It also positions the company as a good employer, aiding in creating a caring company culture. Group cover is often highlighted as an additional benefit within an employee’s remuneration package, with premiums usually paid by the employer.

Individual Cover

A major advantage of individual cover is the element of control that exists. Compared to company plans, which are tailored by the employer to meet its own needs and budget, an individual plan allows the expatriate to choose the insurer, the level of cover, the type of benefits they want and the amount of excess to be paid.

Likewise, individual cover provides flexibility and portability.  The policy can be taken anywhere in the world, for work or travel, and cover continues where there is a temporary return home.

Such policies are also guaranteed renewable, so the plan cannot be cancelled by anyone other than the individual, and ensures continuity of cover even when shifting from one employer to another, guaranteeing continued treatment and maintenance of any injury or illness. 

One of the most important benefits surrounds the development of medical conditions.  Where, for example a serious illness or injury occurs whilst on an individual policy, the cost of care and any complications that arise is fully covered whilst the policy exists, which is effectively until the expatriate chooses to cancel it. The policy cannot be cancelled by the insurer unless the premium goes unpaid.  The clear advantage is that individual cover does not end abruptly as it naturally would at the end of an employment relationship through a group policy, so where an expatriates changes employers, the cover goes with them.

Is One Better Than The Other?

There are trade-offs with both, so will largely depend on the expatriate’s situation. 

It’s important to remember, if an injury has occurred or the expatriate has developed an illness whilst on a group policy and decides to leave that employment, it can be difficult to get another insurer to cover those conditions.  This means any further costs associated with maintenance of the condition will likely have to be paid from one’s own pocket.  As a result, future employment opportunities might be restricted to those companies which provide medical insurance in their employment contracts.

It largely depends on the employer, but group policies can sometimes be watered-down to suit company budgets, resulting in a decreased level of cover compared to an individual policy. Group plans however ensure pre-existing medical conditions are automatically covered, whereas an individual policy requires medical history to be divulged to the insurer, which might result in additional underwriting or policy limits being applied. 

It is prudent to consider future goals and why you headed overseas in the first place.  Are you likely to stay with just the one employer? Either way, a group plan will only cover you as long as you stay with that employer.

Group plans are definitely a viable choice if the intention is to remain with a company long term. Unfortunately it is all too common that expatriates are forced to look for insurers to cover pre-existing conditions because their previous employer provided medical cover and the expatriate developed a condition whilst on the plan. Luckily there are some insurers that still consider covering a small number of conditions.

What’s The Solution?

Prior to accepting a contract with a new employer, check whether the level of cover the company health plan offers aligns with your own long term needs and goals.  A decision can then be made whether to join the plan or not.

At the very least, make certain that a medical evacuation benefit is included in a group policy and check the limitations and co-pay/excess amounts for medical treatment under the plan.

As an alternative to joining a company plan, request that the premium paid by the company on your behalf, be paid into your salary so that an individual plan can be arranged. This will allow you to take the insurance cover with you wherever you work or reside. It will also ensure you have continued maintenance of any illnesses or injuries when you move from one employer to another. 

Remember to keep long term goals in mind and consider the type of situations you might need cover for.  There are generally more limitations on group plans than there are on individual policies.

Buy a policy when you are healthy, as you’ll have many more options available to you. 

How We Help!

Navigating all the policy options offered by a large number of insurers can be hard, and finding cover that delivers exactly what you need on your own can be even harder.  It isn’t until an adverse medical event occurs that expatriates find a crucial element of their cover is missing.  Having an independent third-party like Global Albatross can mitigate those risks because we know the areas of cover, the depth of policies, the inclusions and exclusions, and we know the questions to ask.  We help ease the burden of relocating, living and working overseas.  And our service is free.

Global Albatross is a specialist advisory focusing on international medical insurance for expatriates.  If you have a query regarding your current policy, we can answer it.  If you are considering options, we can provide them.  If you want to change an individual or group policy, we provide the manpower to help achieve it.

Our expertise will assist you in finding cover that best suits your situation, needs and budget. We highlight the differences between insurer’s plans and also point out the differences in the insurers servicing abilities, responsiveness and claims pay-out timeframes.  Our mantra is, if we wouldn’t buy it for ourselves, we won’t recommend it.