What Are the Options for Health Insurance When a Contractor Has a Foreign Assignment?
One of the easy to overlook items for contractors with foreign assignments is medical coverage while in another country. Foreign locations may have hazards or sanitary conditions that are different from your home country, so medical care could become necessary.
No matter what option a contractor chooses, it is important to have some plan for paying medical expenses while on assignment. The type and scope of health insurance will depend on the country or region, duration of stay, and any home country insurance already in place. There are several choices available as you review your need for medical care while working abroad.
Option 1: Travel Insurance
For short assignments of 60 days or less, travel insurance may be the most cost-effective option. Travel insurance policies are inexpensive and offer a fairly decent range of coverage for the cost. They also often have policy terms that cover trip cancellation, lost baggage, and evacuation back to the home country. There are also stand-alone evacuation policies if that is your preference.
These policies are really designed for tourism or personal short trips abroad and usually require some proof that the trip is of short duration (such as a return ticket home.) You usually have to get travel insurance while still at home, so it’s not an option if you are already in a foreign country.
There may also be exclusions for injuries or illness during work-related travel, so that may be an issue for some contractors, and travel insurance is not a replacement for full coverage in your home country.
Option 2: Regional or Global Policies
There are companies that do offer either regional or global ex-pat policies, and if your assignment is longer-term or you work frequently in one region this may be a worthwhile investment.
Bupa International is one well-known company that offers both travel insurance and short-term international insurance(link is external) for stays of 3 to 11 months. But, you should note that companies like Bupa only offer their insurance products based on your country of residency. For example, Bupa’s short-term policies are not available to US residents.
If you are accepting an assignment for many months, there may be an opportunity to negotiate the cost of insurance as part of your contract with the client if they cannot offer you an alternative.
Option 3: Host Country Insurance
Contractors on long-term assignments may want to look into insurance policies in the host country. It may be possible to include this in your contract with the client if they have local group coverage that they could extend to cover you.
There are individual policies available in some countries as well, which may not be costly to obtain on your own and give access to local healthcare providers at a discount. Sometimes these policies are only available to residents, but if you have a work permit and visa you might qualify.
Option 4: Home Country Insurance Coverage
If you have insurance in your home country then it is worth checking to see if it offers any type of travel or international coverage. Some policies do have some travel provisions, or those may be added. The catch is that you would have to pay medical expenses out of pocket and then submit a claim for reimbursement, and you might not have the full amount paid back.
Even if you get a short-term expat policy, it is a good idea to keep any home country policy in place in the event you have to return for a major medical problem, and also for your eventual repatriation.
Option 5: Self-Insuring
The simplest option is to self-insure and commit to paying medical expenses out of pocket in the host country. Many contractors will take this risk for short trips, and not worry about getting additional coverage.
If you are in a country with low-cost medical care this can work out fine as long as you have enough cash or credit to cover it. Even if you have an expat policy, many hospitals want a method of payment prior to treatment. Major medical incidents might require a return to the home country to avail oneself of established health coverage and quality of care.
A frequent traveling contractor may want to have some combination of these five options to ensure coverage at home and on assignment. Some of the important elements for medical coverage will include:
- Limitations on healthcare providers
- Cost limits and caps
- Evacuation coverage
- Exclusions for certain hazardous locations or activities
- Direct payment or reimbursement by the insurer
- Dual coverage exclusions (if you have more than one policy)
- Coverage for dependents
- Coverage in multiple countries
When evaluating policy options it is important to weigh the exact coverage that you need and the relative costs, to make sure you don’t pay for more than is necessary. Health insurance is one of those this that no one wants to pay for, but when you need it the cost seems worth it.