Lawrence Watts, Commercial Director at Collinson, talks about the fast-changing world of international medical insurance provision and the challenges companies face in providing cover for policyholders around the world
Healthcare has become one of the defining political and social issues of the 21st Century. Governments across the world are increasingly focusing on how to deliver affordable healthcare, whilst also reviewing the role that private health insurance cover can – and should – play in the funding mix. Barack Obama’s ‘Obamacare’ programme was one of his primary legislative initiatives (albeit a controversial one) which has been under high-profile review since Donald Trump became President. In the UK, how to fund the National Health Service continues to dominate the news agenda.
The challenge for corporations is that each country is very different in terms of its healthcare infrastructure, whilst a proliferation of new healthcare and insurance legislation across the globe is further complicating the picture. Organisations that send staff abroad on long-term international assignments increasingly need to keep up-to-date on this fast-changing landscape as localised requirements and legislation have become more widespread in recent years.
In Saudi Arabia, all expatriates and their dependents must already have compulsory insurance purchased from a locally authorised insurer as a condition of the granting of visas and work permits. In Dubai there is a mandatory scheme, which forms part of the Dubai Health Insurance Law and aims to ensure everyone in Dubai has a minimum standard of health insurance. Many other countries (especially in the Middle East) such as Qatar, Bahrain, and Kuwait are, for instance, currently looking to implement mandatory health insurance.
A review of other countries underscores the profound variety of legislation. For example:
• The China Insurance Regulatory Commission has sought to stop people based in mainland China buying Hong Kong insurance products
• Since January 2009, all residents in Germany have been required to purchase some level of health insurance
• In Russia mandatory health insurance is dependent on role, position and salary
• In Indonesia all policy documents are required to be in the local language
• In Dubai all servicing must take place locally
• In Switzerland health insurance regulation varies from region to region
A fragmented compliance environment creates additional concerns in managing a global workforce, and keeping up-to-date with local requirements for expatriates can be extremely challenging for HR teams.
It also makes it harder for organisations and their HR functions to provide a one-stop solution to cover all their employees as products need to be adapted to different markets.
Impact on private medical insurers
Meeting local regulatory requirements can add real complexity and additional costs to operating models, which are inevitably reflected in premiums. In the same manner, the challenges for multinational employers in terms of their duty of care towards their staff are significant.
Providers of iPMI (international Private Medical Insurance) need to ensure that they have the appropriate resources and processes in place to identify the relevant regulatory changes across all the markets they operate in. To truly fulfil client aspirations to protect their employees wherever they are in the world, iPMI providers need an intricate network of partners and this requires effective management and governance.
Rules that have been designed for domestic health insurance regarding underwriting conditions, for example the acceptance of pre-existing conditions, can have a significant impact on iPMI pricing models. The ever-changing complexity makes it hard to provide a product for an employer that is both compliant and portable – all in an environment where enforcement and fines are becoming more punitive, along with the risks for reputational damage.
However, successful providers of iPMI are embracing these requirements and using it to deliver a truly first-class, value-added service for their clients.
Focusing on product innovation is key in responding to changing needs. One way to do this is by designing tailored international ‘top up’ policies to sit alongside any mandatory domestic cover. We see ‘Local Plus’ domestic plans – which include emergency evacuations – proving very popular with our clients. This, coupled with the strategic partnerships we have with local insurers in the market, enable us to provide locally compliant solutions whilst at the same time streamlining and redesigning the operating model to be closer to the customer.