The Hidden Cost Of Employer Provided Medical Insurance
05 June 2021
Being offered a new employment position with a new company can be a wonderful opportunity for career progression, particularly if the salary and benefits are commensurate with the new role.
However many expatriates overlook the very real importance of the company medical insurance benefits and simply assume that what is included will suffice - sadly this is very often not the case!!.
This article focuses on the extremely important issues of "insurability" and what is known as "pre-existing conditions" - let me explain.
Many find that at the time of securing their new role they are generally physically fit and healthy (but not always) and have no particular concerns regarding the medical insurance that is provided by the new company after all it is a benefit provided by the company. At this juncture all appears to be well and likely to remain so - until that is it's time to make medical insurance claims and / or the onset of physical ailments takes a hold, for example suffering a heart attack, a stroke, being diagnosed with a cancer or simply succumbing to diabetes or high blood pressure that require medications to control the conditions.
In all likelihood such claims will be met if the Employer has established robust medical insurance cover for their employees (if not that is a further issue that we will investigate in a future article).
The real issue for you, the employee, starts when you either voluntarily leave the company or you lose your job.
What happens when you leave an employer in poor health?
Having left your former employer you will suddenly find yourself not only out of work but looking for new employment but this time around with impaired health.!! - not so good.
Unless you are extremely fortunate and find a replacement position with a large firm (a large firm meaning an employer with in excess of 250 employees) that just so happens to have a Group Medical Insurance plan that provides what is known as "Medical History Disregard" you may well find the position you seek may not be offered to YOU.
Medical History Disregard
Let me define "Medical History Disregard" - these are favourable underwriting terms offered to large companies who are effecting large (250+ members) group medical insurance schemes. In return for elevated premiums the insurance company providing the medical insurance benefits will effectively ignore the past medical histories of employees and provide full cover. This is a very expensive option for employers and typically only the larger companies can afford to offer these type of benefits. Great if you happen to be employed by such a company - not so great if you are not.
When Medical History Disregard Cover Is Not Available
Given the above it follows that smaller companies are simply unable to obtain full medical insurance coverage for the new employee either due to the small size of the group medical insurance plan or simply the cost of providing those benefits. As a consequence, the cover which can be obtained, will invariably, at best, have a significant premium loading or more likely have exclusions of cover placed on the employee.
This situation is becoming more prevalent across the globe as fewer and fewer large enterprises emerge compared to the smaller more streamlined and cost conscious corporate entities.
It is often the case where there are competing candidates for a position that premium loadings and / or cover exclusions do influence an employers' choice on candidate. Rightly or wrongly employers more often than not will consider more closely a candidate that is 'healthier and less costly' thereby excluding YOU - a job opportunity lost!!
It Is Crucial To Consider The Medical Insurance Options You Have Prior To Joining A New Employer
Alternate Employee Options To Group Medical Insurance Plans
It is not widely known but some employer schemes, upon cessation of employment, will offer leaving employees an opportunity to retain their cover on an "individual basis" at the employees expense.
This option, if available, will generally allow cover to continue and for any illness that was previously claimed against. The former employee can therefore continue to enjoy a plan that has no exclusions - this option however has to be applied for prior to leaving the company.
We have previously helped clients who, having been diagnosed with cancer at or close to the time of leaving employment, would have otherwise been left to carry the extremely high cost burden of their cancer treatments - fortunately by exercising their contractual right to continue with their plan on an individual basis their insurance cover remained in place.
Neither the former employer nor the insurance companies volunteered this advice!!
Maintaining Personal Medical Insurance Contracts
A further option to consider is that of maintaining personal medical insurance contracts for the duration of a working career. This approach can benefit not only an employee but also an employer.
Most employers recognise that providing medical insurance cover for an employee is going to cost one way or another.
If an employee presents his own medical insurance at interview stage the vast majority of employers will, these days, be happy to fund the employees personal plan saving themselves on the process of onboarding into an existing company scheme.
This can be particularly advantageous to an employer If the employee has a plan that has a 'no-claims discount' built up. In these circumstances the employer can find themselves in a position whereby the costs of funding the employee plan can be far less than the existing company plan - a win win situation for both employee and employer!!
From the employee perspective, he retains the comfort of knowing that he is in control of his insurance protection and that he will never be subject to losing protection as a result of a company later deciding, for whatever reason, to cease funding medical insurance.
Upon leaving service the privately held medical insurance plan continues as the employee is the owner of the contract and not the employer.
Further the employee will never face a situation where he is without medical insurance cover. Additionally, once purchased (and assuming a clean bill of health at application time) privately held medical insurance will not be subject to future plan exclusions.
The employee thus retains total flexibility of t his own medical insurance plan and moves with him throughout his career whilst never being labelled "an unhealthy and cost burden candidate"
If you would like to discuss effecting International Expat Medical Insurance please contact us