Foreign Travel Risk

Overseas Employees at Risk

Undisciplined insurance purchasing practices leave dangerous gaps for expats.
By: | May 24, 2016 • 6 min read

A rogue wave pulled a vacationing military contractor walking on a foreign beach into the ocean. He hit his head on a rock and was paralyzed.

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Because his employer sent him on the trip for some R&R, the contractor’s Foreign Voluntary Workers’ Compensation insurance responded for his medical injuries even though he was vacationing instead of at a job site.

Luckily for the worker, his employer had the right coverage in place to forestall painful financial and health consequences.

But a substantial risk for employees and the companies they work for is that how and when coverage responds overseas often doesn’t track how coverage responds stateside, said Mary Quillen, manager, international workers’ compensation, AkesoCare.

Multinationals tend to carry many overlapping lines of insurance for their overseas business travelers, which is a help.

“You may have six or seven lines of insurance responding to a single claim,” said Logan Payne, assistant vice president, international practice, Lockton.

The primary policies are Foreign Voluntary Worker’s Compensation, Business Travelers Accident, and Kidnap, Ransom and Extortion, Payne said. Purchased effectively the coverages can be powerful. Purchased without the proper consideration, they may suffer from gaps as well as redundancies. Such gaps can cost employees dearly at a desperate time of their lives, Payne said.

To prevent that, he recommends centralizing insurance purchasing for expats instead of delegating it piecemeal to departments or regional offices. “Get all the insurance buyers in the same room to reach one comprehensive answer,” he said.

“Who does the traveler call if he loses his prescription drugs or needs medical evacuation? Who does he call if he hears gunshots outside his hotel?” — Chris Chao, senior vice president, Aon

International benefits from domestic health care insurance can range from nonexistent to “pretty good,” said Arno Chrispeels, owner, Health Insurance International. “A plan might cover emergency medical treatment but not evacuation or repatriation,” he said.

Since these are hefty expenses — $20,000 to $100,000 for a helicopter evacuation and $15,000 to $25,000 for repatriation — companies should review their domestic policies and fill in gaps by using international insurance for short- and long-term travelers.

Chris Chao, a senior vice president at Aon, said it is generally the travel assistance provider that keeps expats safe.

“Who does the traveler call if he loses his prescription drugs or needs medical evacuation? Who does he call if he hears gunshots outside his hotel?” Chao asked.

Duties of Care and Loyalty

When companies send workers out of the country, they have a “duty of care” to keep employees safe and healthy, while the expat workers have a “duty of loyalty” to follow their employers’ safety practices. Sometimes this requires workarounds and major effort. For example, said Denise Buckland, senior vice president, operations, International Medical Group, if a worker is diagnosed with an autoimmune disease, doctors will try staged medications.

Denise Buckland, senior vice president, operations, International Medical Group

Denise Buckland, senior vice president, operations, International Medical Group

“You try one, and if it doesn’t work, you try another,” she said. But the options can be very limited.

Let’s say a U.S. employee working in Thailand requires the injectable Humira to manage her condition, and no other drug gives her the relief she needs. Humira is illegal in Thailand, however. The carrier could contact the Thai and U.S. governments to help the employee get an importer’s license, but in the meantime, Buckland said, “the worker may get so sick that she has to go home.”

Especially in regions where the medical infrastructure is underdeveloped by Western standards, an acute but treatable event, such as a compound bone fracture, could quickly escalate into a life-threatening medical issue, said Alison Swanz, senior consultant, Arthur J. Gallagher & Co.

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Duty of care is still an “unregulated philosophy,” said Hart Brown, senior vice president, practice leader, organizational resilience, HUB International. It depends on a number of interrelated steps, beginning with a vetted travel assistance provider and adequate insurance.

An employer “hasn’t met its duty of care” if its travel assistance provider does not have the right protocols or its expats don’t know the provider’s toll-free number, he said.

“Compliance is hard to enforce. You can’t sit on an adult to make him take his meds.” — Alison Swanz, senior consultant, Arthur J. Gallagher & Co.

Coverage gaps and potential risks should be exposed in a thorough pre-trip screening, said Rob Howard, director of corporate sales, GeoBlue, a major provider of international insurance for expatriates.

When employees need medical help while on assignment, carriers will tap their provider networks to find care equivalent to what they would get at home, said Howard.

Pre-assignment evaluations should extend beyond known health issues, said Nick Dobelbower, vice president, global benefits practice, Lockton, to include language training if necessary, and alert the traveler to cultural differences and sensitivities.

Chris Chao, senior vice president, Aon

Chris Chao, senior vice president, Aon

The onus is on the employee to make a responsible decision whether to go on an overseas assignment. Sometimes, employees should decline assignments, Swanz said. A worker with asthma probably shouldn’t accept an offer in Beijing, where air pollution is a health hazard.

“An executive expat assignment is a huge investment for the company,” Howard said, and may include high compensation, language training, housing, security, a driver and private schools.

To recoup that investment, companies expect an executive assignment to last three to five years, but more than 50 percent end in failure after six to nine months. Among the top reasons for failure are the expat’s benefits package and health care, according to Cigna’s “2015 Global Mobility Survey.”

Duty of care and duty of loyalty should align during pre-trip planning, said Howard. He recommends a sit-down orientation with travelers as a group before they leave to review the size and scope of risks.

Other issues such as domestic employees can arise, Chrispeels said. “Employees may think they have international coverage for the entire household [such as nannies], but they don’t.”

The organization should also consider issues such as family mental health problems. A one-on-one meeting or a follow-up phone call may bring issues to light when travelers have medical issues they don’t want to share with a group.

One aspect of an employee’s duty of loyalty applies to medical compliance, especially to taking prescribed medications for common diseases such as heart conditions or asthma.

Alison Swanz, senior consultant, Arthur J. Gallagher & Co.

Alison Swanz, senior consultant, Arthur J. Gallagher & Co.

“Compliance is hard to enforce. You can’t sit on an adult to make him take his meds,” Swanz said.

U.S. companies that send U.S. citizens overseas are subject to the Affordable Care Act, but the law is so complex — despite Congress’ attempt at guidance in the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) — that “people get glassy-eyed looking at it,” said Mark Holloway, senior vice president, co-director, compliance services, Lockton.

Holloway recommends that companies write their expat coverage on U.S. paper as a practical way to satisfy the individual mandate — but to work with professionals who deal in expatriate insurance every day.

“Companies will want to work with a broker or counsel who plays in the sandbox because it’s such an arcane area of the law.”

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]