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International Health Benefits: What Employers and Employees Need to Know

By April 18, 2018October 2nd, 2019No Comments
International Health Benefits

Employee health benefits not only provide medical, vision, dental, and other services and support, but also peace of mind that allows employees to work and travel without fear that their medical or personal needs won’t be met. This is especially true for the growing number and evolving demographics of expats who rely on international health benefits. And with business travel expenditures expected to eclipse $1.6 trillion by 2020, employers may expect that international health benefits spending will also rise to accommodate the growing number of global employees — employees they wish to retain.

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Attracting and Retaining Top-tier Talent

Many employees understandably see international health benefits as an alluring element of their employment contract — and employers should, too. Benefits packages are a powerful tool for attracting, hiring, and retaining exceptional talent. And with more and more people traversing borders — an expected 1.8 billion global travelers by 2030 — many employees are venturing to farther-flung destinations to escape the omnipresence of technology, and these employees want their health benefits in tow.

While international health benefits packages meet the needs of most global employees, there is still room for improvement; between one-third and two-fifths of employees wish for a more flexible benefits plan. This flexibility encompasses choice in health care plans, pension offerings, and defined contributions. Concerning the latter, defined contributions are facing an uphill battle when it comes to offering adequate retirement options.

Limited economic growth, low interest rates, and meager savings have both employers and employees questioning just how effective direct contributions are when it comes to retirement savings. By addressing employees’ desires for more flexible benefits no matter where their business or leisure takes them, employers may expect to see happier, healthier, and more satisfied global employees — employees that wish to remain with their respective employers.

The Ever-Changing Global Healthcare Environment

With more and more employees traveling for both business and pleasure, there’s never been a more pressing time for employers to revisit international health benefits and employee coverage. This is especially true for employees who travel frequently, to areas of the globe that are prone to natural disasters, or are experiencing political, social, or ideological unrest. If an employee lacks adequate international health benefits and is caught in a natural disaster, terrorist attack, or injured in some other manner, they may be stuck with financially crippling medical and/or evacuation bills. The latter can leave employees paying anywhere between $20,000 and $170,000USD for emergency medical evacuation.

Healthcare costs continue to rise across the globe. And that leaves many employees footing the bill both at home and abroad. This is especially problematic for employees traveling or working in other countries, particularly countries that may not offer the most optimal standard of care. Even if an employee has access to quality hospitals and clinics in the country in which they fall ill or are injured, the same procedure may come with a wildly varying price tag than in other more developed countries or countries with more robust government-funded healthcare services.

Mandatory Health Insurance

There are a number of reasons that governments across the globe are considering or already have policies in place that require travelers to have mandatory health insurance, including medical costs, poor lifestyle choices, and aging demographics. Recently, the Schengen area has enacted a policy that requires those traveling on a Schengen visa to prove that they have medical coverage when traveling through any of its 26 member nations. In the United States, travelers who possess either a J1 or J2 visa must have medical coverage up to par with US regulatory standards for the duration of their stay.

Considerations for Benefits in Kind

While employees seek comprehensive healthcare and fringe benefits, employers have much to consider in order to meet compliance standards in their respective countries. In France, parity laws prohibit employers from only providing certain benefits to certain people. Employers must consider these laws when drawing up supplemental benefits packages or mutuelles, which cover the cost of healthcare not paid for by the French government.

In the UK, health insurance is considered a benefit in kind and is taxed similar to salary. Employers should make employees aware of this, so as to maintain compliance. Additionally, some employers may cover the taxes through an employee allowance. Some of these benefits in kind, however, are tax-free, including:

  • Bicycle allowance
  • Reduced or free loans
  • Gym and recreational facility access
  • Childcare
  • Counseling services

Whether following compliance laws or meeting millennials’ demands of convenience and connectedness, employers can expect that the coming years will present challenges and opportunities for reshaping (and rethinking) how international health benefits play a role in sourcing, hiring, and retaining employees who travel more than any generation before them. If you’re sourcing global talent and have questions about benefits that will meet your compliance needs and also appeal to top talent, reach out to Velocity Global today to learn how we can help with your global benefits and talent acquisition needs.