Unlock the Value of Global Benefits: Real-World Examples
Do you truly understand the value hidden within your benefits coverage? That may seem like a simple question. However, we often find that clients need to be more intimately familiar with the nuances of their coverage to realize its full value. When that is the case, there can be devastating financial consequences — or, less dramatically, money spent on unnecessary coverage.
In an industry often filled with jargon, overlapping services, and fine print, it is imperative to understand not only what kind of coverage your organization has but how it works and why it is important. This is especially true for international NGOs and other organizations with a wide variety of employees and travel types that demand extra coverage and services. Understanding the types of coverage available and your organization's needs can ensure you strike the right balance between being covered when you need it and not wasting money on superfluous bells and whistles.
Understanding the basics
Understanding the coverage you have, what you may still need, and how it all works together is integral to getting the greatest value out of your investment. In the simplest of terms, the coverage that most of our international NGO clients need falls into two categories:
● Insurance: Protects your organization from unknown financial risks.
These two types of coverage allow organizations to meet their Duty of Care obligations to staff.
To ensure you have the right combination of these benefits, it is imperative to understand who is traveling, where they are going, and for how long. The needs of an expat living and working in another country differ from those of someone traveling to a new location for a week.
Next, you must differentiate between the coverage you absolutely must have and what’s nice to have for your employee population. From there, you can start building a coverage strategy that makes the most sense for your organization and its travelers.
Real-world examples are often the best way to illustrate the often complicated ways that different types of coverage safeguard your organization and its employees. So, let’s examine some case studies demonstrating the importance of having just the right amount of coverage to address an organization’s needs.
Realizing the value of your coverage
Unfortunately, many organizations do not fully comprehend the value their insurance and assistance coverage provide until the worst happens. One of our clients had an employee traveling for work when he became ill. After a brief stay in the hospital, he was released, but not for long. A couple of days later, he was back in the hospital, where he suffered a stroke.
Having a catastrophic health event while traveling abroad can be terrifying and confusing, especially if you need advanced care that’s not available in your current location. Fortunately for this employee, the organization had travel insurance, which cost them just $10,000 a year to cover anyone traveling under their organization’s umbrella.
Not only was the original care covered, but so was a medical evacuation to a third country, thanks to the organization’s assistance policy, which cost roughly $38,000 a year. Once the patient was stabilized in a hospital in the new country, he was eventually repatriated to the United States.
It’s also essential to note that the order in which these events happened is important and that understanding your policy's requirements is vital. Some policies require a medical evacuation before someone can be repatriated. In other words, bringing someone straight home may not be an option after a medical incident.
The total cost of the organization’s coverage was $48,000; all of this care, including travel, was entirely covered at a cost of $877,000. Had this organization not had the right benefits, the financial burden of meeting its Duty of Care obligation to this employee could have had devastating consequences. The client was spared a potentially catastrophic bill because the right coverage was in place for their employees’ travel needs. However, as we will see in upcoming examples, more coverage is not always better.
Recognizing coverage duplications
At Allegiant, we regularly audit our new clients’ coverage and find that they are paying for duplicate coverage. This is easy to do when you buy multiple policies to cover various employees and travel types, but it can be a costly mistake.
For instance, we saw one client purchase a global long-term assignee program to cover its expat and third-country national (TCN) employees working abroad. This included full coverage for all enrolled employees. Before this, however, the client had declared all employees covered under their travel and assistance policies.
During renewals, we recognized that the expat and TCN employees were covered twice. In this case, we opted to remove these employees from the travel program, significantly decreasing the premium for travel coverage. Ultimately, understanding the terms of the products and how they relate to the different employee types was integral to reducing costs for this organization.
Finding the right level of travel coverage
Making sense of the available coverage options for organizations with a global travel population is anything but simple, especially for human resources managers who have more to focus on than just travel benefits. It’s often helpful to work with a broker or consultant who understands the nuances of coverage and is focused on providing clients with value.
Take, for instance, a client of Allegiant Global Partners who had an employee traveling to Kenya for a brief business trip. They already had blanket medical business travel coverage, including an embedded assistance provider that could provide 24/7 support in a medical emergency or evacuation. For just $5,000, they had $500,000 in medical coverage and $250,000 in evacuation coverage.
Still, after reading about best practices for meeting Duty of Care obligations for travelers, the client wondered if they should add an assistance program to their coverage at the cost of $12,000. Allegiant stepped in to assess the client’s needs. The organization has relatively little travel in any capacity and, as I mentioned, already had 24/7 assistance through a provider embedded with its travel insurance plan. As such, we recommended they stick with the embedded solution and not spend money unnecessarily on extra coverage they would likely never need.
The complexity of international insurance coverage
Our story does not end here. There are more concerns that international NGOs and other organizations with global workforces must be attuned to. Later this summer, we will continue this discussion, diving into more real-world case studies that illuminate the potential pitfalls organizations can fall into when they have yet to consider all the details of their benefits packages and assistance coverage. Until then, we are always available to help clients or potential clients navigate the nuances of global benefits coverage.