Traditional group health insurance – What you should know
The benefits and drawbacks of traditional group health insurance
Traditional international group health insurance has a number of positive benefits not least of which is that you can tailor the plan and know that everyone on staff has the same protections and benefits and that you have one plan, one administrator, one contact when you have a question or claim.
The insurance carrier then takes all the risk and handles most of the administration, payment of claims, and fiduciary/legal responsibility. Also all new members/employees (and their families) are automatically enrolled in your coverage protecting your most vulnerable members.
Furthermore, not only are these plans available for groups with as few as two full-time staff overseas, but we can help groups get approved even if they have an older aged staff, have had recent childbirths, are newer (without recent claims history), or have a negative claims history.
The following article was written specifically for international aid agencies, relief and development, non-profit organizations, NGOs, CSOs, B-corporations, faith-based charities, mission agencies, sending organizations, and other social good/social entrepreneurs with staff living and working overseas as expatriates.
Key advantages and benefits of traditional fully-insured international health plans:
Most international carriers have specialists in overseas medical treatment, doctors, and recommendations on hospitals with best practices and even translators that can clarify and make recommendations to local care facilities. This is one big advantage of fully-insured health plans – Access to international resources and expertise that you otherwise would not know or have access to.
Fully-insured plans also allow your and your staff to focus on your mission and goals rather than spending inordinate amounts of time on healthcare administration and dealing with claims, third-party administrators and cost-analysis/cost-control. The salary for time spent by one full-time person in a home office may be well over the amount saved by being on a self-funded plan.
One of the greatest advantages of fully-insured plans is that you pay one amount and the carrier assumes all the risk. As long as you continue to pay your premium you have set cost-controls in place and do not need to worry about reserves running out or dealing with multiple chronic claims in a year.
Along with the carrier assuming the full risk for your group, since you also “pay as you go,” there is no need for you to raise or maintain a large reserve account.
Lastly, a key advantage to any health plan is that as you grow, new employees and their families are automatically accepted. This can help with recruitment especially if you have had employees on individual plans in the past.
To see more advantages of international group insurance (fully-funded plans) please go to http://www.gninsurance.com/group/advantages.asp
The drawbacks of a fully-insured international health plan:
The key drawback is that you have less control over funds, and may be subject to “rate-ups” at renewal time which historically average 12-14%. Want to understand “trend?” Check out http://www.youtube.com/watch?v=5olKWMR-vy4 and our youtube.com playlist here. Even if your group has had only minimal claims, you can have your annual premium go up. And if you do not educate/help your staff understand how claims affect their rates, they may overuse your insurance causing even higher annual premium increases.
Other companies/groups within the insurance carriers’ same block of business can also cause you to pay more since the future risk of this larger bundled business is also considered as a block.
Of course, carriers dealing with blocks of business can be a plus, as well as a drawback. When your group isn’t doing so well and you are in a good block, you are cushioned and consequently received a lower renewal. Some of our carriers work well in this regard for our smaller groups.
One way companies try to save on annual rate increases is by cutting employee benefits which results in a leaner benefit plan which diminishes employee health and can eventually put employees at risk. This cutting cannot continue indefinitely and is usually a method to save on one year’s renewal for a particular purpose (such as unanticipated large number of claims that should drop back to “normal” the following year).
Lack of assets. Tied to the above, since you are not paying your own claims, if you do not use your insurance, the insurance carrier still keeps the premium as the cost of doing business.
Underwriting. Self-funded health plans do not have underwriting since the business is paying their own claims for their own employee’s medical needs. While they still have to buy a reinsurance or “stop-loss” policy, this usually is not as significant as general underwriting for a group to be fully-insured.
Some may well consider the inability to control health costs (either through good behavior and wise usage), and/or regular premium increases, rather than banking the money (as in a self-funded plan) until it’s needed to pay a claim as being poor stewardship of donor’s money.
International groups or organizations with staff living and working overseas can benefit through a whole series of cost-saving methods that we regularly employ on behalf of our clients. We created an email series or downloadable .pdf to explain ways groups can save on their fully-insured international group insurance here: http://www.gninsurance.com/group/special-report.asp
Depending on the size of your group and the age of your staff, you may want to fill out a group census at: http://www.gninsurance.com/group/Request_A_Group_Insurance_Quote.asp so that we can expertly advise you on the best options for your group. We have helped hundreds of international non-profits and for-profit Bcorp businesses save over the last 16+ years and are well-known by both our 10+ carriers and by those working around the world. When you consider the relationships we have with numerous carriers, our overseas expertise and ability to help you tailor a customized plan to fit your staff and save by cutting items you do not need, we believe we are uniquely qualified to help you. Especially if you’ve been overseas before, you know how having a good neighbor always helps!