Worldwide outsourcing and investment consultancy Mercer has released its 2011/2012 Benefits Survey for Expatriates and Internationally Mobile Employees, an overview of the expatriate policies adopted by large multinational companies. The provision of such benefits remains a priority for these companies, although increasing numbers of ‘global nomads’ – employees who frequently move between different countries on multiple assignments – have posed a challenge for employers. Between this survey and the last (2008/09), the number of ‘global nomads’ among the expatriate population of those surveyed has risen from six per cent to 10 per cent, while long-term expatriates on assignment for five or more years has increased from 21 per cent to 40 per cent. Phil Stanley, Mercer’s Asia Pacific global mobility COE leader for information product solutions, commented: “We are seeing that multinationals are expecting their talent pool to have varied geographical experience as a prerequisite to climbing the top rungs of the career ladder.” But as a result, employers are finding it difficult providing ‘global nomad’ expatriates with consistently equitable healthcare benefits as standards of healthcare vary significantly between different countries. Nearly all respondents to the survey said they currently provide private medical insurance for their globally mobile workforce (98 per cent) compared to only 57 per cent in 2005. As previously mentioned, medical benefits and the quality and standards of medical healthcare vary significantly from country to country, so the main challenge for companies is to provide expatriates with a broadly equitable system of healthcare whilst managing costs. Other factors that may be driving uptake of international medical plans, said the survey, include an increase in local health insurance compliance and also the increasing demand by employees for medical benefits to be in place prior to the commencement of the assignment.
Mark Price, principal in Mercer’s International Consulting Group, commented: “An international medical plan provides equality among expatriates and reduces administration effort and time resource constraints. But challenges remain, particularly around costs. Fifty-three per cent of respondents have experienced increases of six per cent or more in their international medical plan premiums at their last renewal. Twenty per cent of companies have seen their premiums increase by between 11 and 15 per cent.” He added: “Complexity in administering multi-country plans can increase the cost of providing medical benefits. Furthermore, the ‘hot destinations’ for expatriates happen to be countries with some of the highest medical inflation in the world, such as the Middle East, India, China and Latin America. So it is not surprising that the global trend towards high premium increases is particularly prevalent in international medical plans.” According to the survey, traditional cost containment options remain popular, with a large proportion of respondents adopting the use of cost-sharing approaches such as employee deductibles (up eight per cent from 2008/2009), co-insurance and annual benefits limits.