Insurance Protection For Employees Abroad

Insurance protectionfor employees abroad

Insurance protection foremployees abroadThe recent political upheaval in the Middle East and the unprecedented catastrophein Japan highlight the issues companies face when their employees work abroadin harm’s way. As situations deteriorated, companies struggled with decisions as towhether to withdraw all their foreign employees and faced the logistical challengesof evacuating employees and family members under sometimes difficult anddangerous conditions. In some cases, medical care needed to be procured forinjured employees.Organizations that require employees to travel or reside abroad need acomprehensive framework for managing the risks. Not only is this a moralresponsibility, it is a legal obligation in many countries. According to legal experts,the employment relationship includes an obligation of Duty of Care of employersfor the health, safety and security of their employees. The Duty of Care obligationextends to employees and their dependents who are abroad on company business.a comprehensivesafety net can bean important factorfor employees whendeciding whetherto take overseasassignments.Beyond the legal obligations of the Duty of Care, a comprehensive safety net canbe an important factor for employees when deciding whether to take overseasassignments. Even for employees traveling and working in more tranquil regions ofthe world, security is a critical issue. U.S. employees need assurance that if they areinjured, they will be eligible for at least the same level of benefits they would havereceived back home. Additionally, they want to know that they will have help dealingwith an unfamiliar foreign health care system, that they have insurance coveragethat is accepted by local hospitals, and that resources are available to help get themback home or to a better equipped medical facility.The need for these services has existed as long as there have been foreignbusiness travelers and expatriates. In the modern global economy, demand forthem has never been greater. Thousands of U.S. citizens have taken assignmentsabroad. Rapidly growing emerging markets are especially attractive destinations.PricewaterhouseCoopers’ 2011 Global CEO Survey found that with much of Europeand North America still dealing with the lingering effects of the downturn, manycompanies looking for sustainable growth are aiming their sights on markets awayfrom home. It revealed that U.S. CEOs are expecting to grow their operationsinternationally, particularly in Asia and Latin America.1 Brookfield Relocation Services,in their annual employee mobility survey, found that China, India, Singapore andthe United Arab Emirates were the top emerging new locations for internationalassignments.2A long-standing type of insurance for employees traveling or living abroad isForeign Voluntary Workers’ Compensation (FVWC) coverage, often added asan endorsement to a domestic statutory workers’ compensation policy. The1Growth reimagined: Prospects inemerging markets drive CEO confidence,PriceWaterhouseCoopers, 20112International Employee Mobility in theNew Decade, Brookfield Global RelocationServices, 20111endorsement offers on a voluntary basis insurance protection equivalent to domesticworkers’ compensation insurance. FVWC, however, does not cover the full rangeof health and safety concerns of business travelers and expatriates. Some globalinsurers now offer a coordinated package of international insurance coveragesInsurance protection for employees abroad

and services to provide comprehensive protection. Companies can further assurethe safety of their employees through their travel and relocation policies, and byproviding employees traveling overseas with safety training.Foreign voluntary workers’ compensationThe U.S. workers’ compensation system is now 100 years old. While perhaps notperfect, it has generally been successful at addressing the needs of injured workers.It is such a pervasive element of employment that most workers simply assume theywill be taken care of if they are hurt on the job. The U.S. workers’ compensationsystem, however, is state-based, meaning that some employees of Americancompanies are not automatically covered. Each state sets its own rules for eligibilityand benefits, but all limit out-of-state claims. Employees working abroad risk nothaving this vital protection if they are injured. In addition, while U.S. statutorylaws do extend the U.S. state benefits extraterritorially to U.S. employees who aretemporarily overseas, many states are unclear on what is considered “temporary,”leaving companies exposed.The solution to the workers’ compensation dilemma for foreign-based workersis FVWC. While not statutory coverage, FVWC coverage mirrors that of a state inwhich the employee was hired and, in some cases, expands coverage. Domesticworkers’ compensation insurance policies can usually be modified to providecoverage for overseas workers on temporary assignments by attaching a FVWCendorsement. For organizations with significant foreign exposure, however, separateFVWC coverage is usually the preferred solution.In addition to paying medical and indemnity in accordance with the workers’compensation law in the designated U.S. state, FVWC also may provide valuableextra benefits not usually available under a domestic policy. These additionalcoverages are tailored to the unique needs of individuals living in a foreign land.They typically include: Medical expenses for endemic disease. Statutory workers’ compensationcoverage provides coverage for “occupational disease,” but not for “endemicdisease,” i.e., disease that is endemic to a specific region but may not be directlyrelated to the employee’s occupation. If, for example, an employee contractedmalaria while on assignment in Africa, the illness probably would be covered eventhough malaria is not an occupational disease since malaria is endemic to certainregions of Africa. 24-hour coverage. Many FVWC policies provide broad accident insuranceprotection to employees on a 24-hour basis while overseas on a short-termbasis. The coverage often also extends to personal trips taken in conjunctionwith business travel. This coverage feature can provide medical coverage foremployees abroad because workers’ compensation has no employee deductibles,co-payments or policy limits. Repatriation expenses. Repatriation expenses are the additional costs incurredwhen moving a patient from a foreign location back home or to a medical facilitythat is better suited to the patient’s needs.2Insurance protection for employees abroad

FVWC coverage also can apply to foreign nationals traveling or working in the U.S.temporarily.For the benefit of employers, FVWC policies also include employers’ liabilitycoverage. Employers’ liability insurance responds to lawsuits brought by injuredemployees, typically alleging that the injury was the result of negligence on thepart of the employer. Employers’ liability insurance covers defense costs as well asindemnity payments.A comprehensive solutionThe typical FVWC policy provides broad coverage for employees traveling orstationed abroad, but it is not designed to meet all the challenges faced byemployees in foreign lands. As a result, some global insurance carriers provide FVWCas part of a package of insurance coverages and services to make living and travelingabroad as safe and comfortable as possible. The additional coverages and servicescan include travel accident insurance, travel assistance programs and reimbursementfor security evacuation expenses.Travel assistance programsPerhaps the most pressing concern of business travelers is falling ill or being injuredfar from home. Foreign travelers may be uneasy about unfamiliar medical systems,potentially substandard care and language barriers. For employees on long-termassignments who relocate their families, these concerns are magnified by the risksfaced by loved ones.A comprehensive worldwide travel assistance program provides assistance withmedical emergencies, including emergency medical referrals, medical evacuation iflocal facilities are not able to provide care comparable to western medical standards,and medical repatriation once the traveler is well enough to return home. Foremployees who die away from home, assistance is available for the return of remains.Non-medical services provided by a travel assistance program can include legal.specialized insuranceis necessary toguarantee thatcoverage is availableanywhere inthe world an employeemay need medicalassistance.services for travelers needing the emergency assistance of a lawyer, travel servicessuch as emergency advance of funds and translation and interpretation help, andinformation services such as passport and visa information as well as inoculation andimmunization information. Travel advisories, alerting employees to unexpected andemerging travel risks, are an important information service provided by a full-servicetravel assistance program.Travel accident insurance and other insurance coveragesA travel assistance program can assure that a sick or injured employee is put incontact with the best available medical care, but typically the employee’s domestichealth insurance will not be accepted by a foreign provider. Consequently,specialized insurance is necessary to guarantee that coverage is available anywherein the world an employee may need medical assistance.Often, as a matter of law, insurance policies must be written by a local insurancecompany. Assuring seamless coverage that is compliant with local regulationstypically requires a global insurer that has both subsidiaries licensed in countriesthroughout the world and strong business relationships with top-tier local companies3Insurance protection for employees abroad