The increasing mobility of the workforce and hiring of expatriate talent has profound implications on the extent of health coverage companies provide.
Asia has seen rapid growth, both in terms of gross domestic product (GDP) and population. And it has, for a long time, been the nerve-center of the global economy, contributing substantially to international trade and economic growth.
It is not without reason that large conglomerates are increasingly looking east and investing huge sums in Asia. This surge in economic activity also necessitates the mobility of human capital in the region, which is needed to setup and expand any business – encompassing both local and foreign talent. Now, more than ever, employers will need to ensure that their employees’ health is fully covered across borders, as navigating through local healthcare systems is sometimes akin to jumping through hoops. Even basic medical benefits are a rare find in some countries in Asia due to the lack of proper healthcare infrastructure.
Mercer Marsh Benefit’s recent 2019 Singapore Health and Benefits International Medical Study surveyed 56 employers in Singapore (covering a total of 4,600 employees) on the state of international medical benefits in Singapore. The insights shared in this study is not limited to Singapore — it can be used as a guide to map out benefit plans for the rest of Asia.
Multinational companies (MNCs) have offices across different parts of the world. Not surprisingly, expatriates comprise a sizable share of their workforce. These employees want to know what their out-of-pocket expenses or coverage limitations will be when they are offered a role outside of their home countries. In almost all cases, we have noticed they seek a maximum coverage limit with features to extend similar benefits to their families.
Most female expatriates surveyed desire a strong maternity benefit scheme in their health plans. Currently, in Asia, these types of benefits are most prevalent in the materials and industrial sector (86 per cent), followed by the financial sector (79 per cent), and in professional and other services (71 per cent). This benefit is least prevalent in the consumer services sector, at just 36 per cent. That aside, complications in pregnancy are covered under inpatient benefits by some insurers even without maternity coverage being selected.
Moreover, in most cases, maximum annual coverage is limited and there are sub-limits on some critical ailments. Most local insurance suppliers also do not have the bandwidth or vendor network to manage critical situations involving high-cost treatments and/or medical evacuations. Coupled with the high cost of living in some parts of Asia, this can deter qualified professionals from contemplating relocation.
With dental treatment being particularly expensive, dental benefits are an essential component in a holistic health insurance package to attract expatriate employee. While this is also the case for benefits relating to vision, with eye examinations and treatments increasingly important in a digitized world, costs related to eye health are not covered by most local medical benefit plans.
Many MNCs lack the right type of health insurance plans for employees, with the majority characterized by low annual coverage limits, and/or no special features to increase the coverage limit for critical treatments such as cancer and kidney dialysis. In some cases, we have seen employers incurring additional medical costs for critical treatments of employees not being borne by the insurer.
Maternity benefits and coverage for newborns are also insufficient. In many cases, the coverage limit provided for maternity benefits is significantly lower than the actual cost incurred. Additionally, newborn benefits are usually limited to the first 30–90 days of a child’s life, and their provision also varies significantly across industry sectors (in the case of Singapore).
The coverage of these medical expenses is critical, particularly to young expatriate employees who may be looking to start families soon.
Separately, dental benefits are also not covered by most local medical plans and around 16 per cent of the plans require a co-insurance. And in 75 per cent of cases, major restorative dental treatments are only covered up to $3,000, which is the overall maximum limit.
A company with a large mobile workforce is better off if it implements international medical plans for their employees as they are both flexible and include coverage of major treatments and other benefits demanded by today’s workforce.
Eighty-six per cent of international medical plans are seen to cover the whole world, excluding the US, whereas 3 per cent of plans provide coverage in the US as well. This provides peace of mind to an increasingly mobile workforce.
Currently, more than 97 per cent of international plans in the market provide dependent coverage, with equal benefit limits, and approximately 6 per cent of dependent benefits are covered voluntarily or as a standalone option. One of the key features of international plans is that they provide a high annual limit — coverage can go as high as $4 million. Additionally, most insurers either decrease or increase premium rates by only a marginal amount of annual benefits equal to $1 million and above. These substantial coverage limits sufficiently cover high-cost medical expenses.
International medical insurance plans also cover rare conditions such as congenital abnormalities and help overcome issues such as low coverage limits for dental treatments and vision-related treatments that are associated with local medical plans.
Additionally, international medical plans not only cover a wide hospital network with top medical facilities, they also provide flexibility in that they remain in place even when employees are transferred from international to local contracts.
As businesses expand into unchartered markets, they will face the need to move the best of their global talent. It is imperative that these employees have up-to-date international health plans that cover all possible pain points for them to make the move happily.
Perhaps most importantly, employees will also need the reassurance that their families will be taken care of in the event of medical emergencies, particularly as surging medical costs are a concern in many economies. For companies, the decision should not be a hard one, for it is in the health of their people that the health of their business lies. Healthy people = healthy business.
These factors can dictate employee relocation plans, and eventually impact an organization’s talent pool both within and outside Asia.
Neil Narale is a partner and health leader at Mercer Marsh Benefits, an award-winning global health and wellness consultancy. Neil's client responsibilities centre on helping multinational and local organisations manage their employee health and benefit offerings from a regional and local perspective. Neil received his Bachelor's of Science degree in Mathematics and Statistics from the University of Western Ontario. He is a Fellow of the Society of Actuaries (US) and a Fellow of the Canadian Institute of Actuaries.
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