Expat health packages
Expatriates face a host of challenges when moving into a new work environment in a foreign land. These include changes in their residential, employment and lifestyle conditions. Ensuring their healthcare needs are well-taken care of will result in peace of mind and better work performance.
“In today’s competitive recruitment market, good financial remuneration is no longer the only factor considered by prospective employees; it is the total package that they are actually looking at. Providing quality expat health coverage will also reflect well on the employers in terms of professionalism, respect and empathy,” says Richard Kwok, Senior Manager, Corporate and Business Development, NTUC Unity Healthcare Co-operative (Unity Denticare).
Nearly all respondents who participated in Mercer’s 2011/2012 Benefits Survey for Expatriates and Internationally Mobile Employees said they currently provide private medical insurance for their globally mobile workforce (98%). That’s a strong jump from the 57% who did so in 2005. However, keeping a lid on costs seems to be a challenge for employers today(see boxout).
Some of the common healthcare concerns expressed by expatriate employees include infection risks, differences in the brands and quality of medications, as well communication issues when consulting local healthcare professionals, says Dr Wong Kae Thong, medical director, of AsiaMedic’s Wellness Assessment Centre.
According to Dr Wong, preventive health screenings are an effective way of promoting good health and reducing healthcare costs for employers. Healthcare service providers such as AsiaMedic offer a variety of health screening options that can be customised to include blood tests and diagnostic tests to meet individual needs.
Ensuring an employee’s total well-being should also extends to dentistry, says Kwok. “Prevention is better and cheaper than cure, and this applies to oral health too. For example, more needs to be done on a dental patient who visits a dentist only when pain or infection sets in, as compared to one who visits regularly. Early detection of oral health conditions also leads to better treatable outcomes,” he says.
Types of coverage
As expatriates are exempt from contributions to the Central Provident Fund (CPF) in Singapore, they do not qualify for most of the medical subsidies afforded to local employees. This makes it critical for expatriate employees to have a comprehensive international health insurance plan.
A standard plan normally covers areas such as in-patient services, critical illnesses, medical evacuation, and reconstructive surgery after an accident. In this case, the cost of visiting an outpatient doctor for, say, a common cold, is borne by the employee. A higher premium plan will cover both inpatient and outpatient services.
“The caps for coverage may vary as expats are not entitled to subsidised rates at local restructured hospitals and medical centres. Ideally, the health insurance should cover both out-patient services and selected hospitalisation and surgical benefits,” Kwok says.
Basic dental benefits offered by employers include dental scaling and polishing, extraction, and filling. “There is an increasing trend in companies providing more comprehensive dental coverage than their peers, including dental implants, orthodontics, wisdom tooth extraction, and crown and bridges,” observes Kwok. While these come at a higher coverage cost, they serve as an additional form of motivation and incentivise staff to boost their efficiency and productivity in their work, he adds.
According to Kwok, companies generally advocate for co-payments and annual maximum caps, as these schemes are deemed sustainable and transparent, and promote accountability in staff’s personal health maintenance. “In addition, employees have the responsibility to reciprocate the corporate coverage with discipline, honesty and responsibility, and maintain good health by leading healthy lifestyles,” he adds.
What to look out for
With so many healthcare service providers in the market, how can HR decide on one that best suits its needs?
HR should gather sufficient information on the track record of the provider, their accessibility, service delivery standard, and their ability to support corporate healthcare requirements over the long run, says Kwok.
Features such as a 24/7 toll-free hotline are useful in the case of an emergency. HR should also check to see if the plan covers pre-existing medical conditions. The provider should be flexible and be able to customise coverage according to the organisation’s changing manpower needs.
Cost of healthcare benefits increase
The provision of healthcare benefits is getting more expensive for employers. The cost of providing health-related benefits for companies in Europe, the Middle East, and Africa (EMEA) rose by an average of 3.6% in 2012, according to a survey by Mercer Marsh Benefits. Costs rose by 3.4% over the previous year.
According to the survey, the biggest drivers of cost in 2012 were the increasing utilisation of health services, the growing complexity and expense of medical procedures, and the impact of large claims, such as those for cancer treatment.
Cost pressures varied across the surveyed countries. Increasing utilisation of health services was the most commonly cited reason for cost increases by respondents in the United Arab Emirates, Spain and Portugal. The majority of UK companies attributed the cost increase to the impact of large claims.
Health benefit costs as a percentage of payroll averaged 3.9% in 2011, the latest complete financial year at the time of the survey.
The survey also found that employers are offering a range of health-related benefits. About three quarters of respondents (76%) provide private medical insurance to all of their employees and their dependents. While coverage for employees is almost always subsidised, 26% of respondents require employees to pay the full cost of dependent coverage.
When surveyed about managing the costs of health benefits, relatively few employers reported that they were likely to restrict benefit eligibility (12%). Instead more suggested that they would cut back on the scope of benefits offered (17%) or shift more cost to employees (16%). Employers also appeared more inclined to address workforce health issues driving cost than to cut back on health benefits: two-fifths (40%) said they were likely to invest further in employee wellness programmes to reduce health risks.
Some 500 companies across 16 countries in EMEA participated in the survey in October last year. The report provides insights into healthcare and benefits trends across the region.
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