In a very competitive market where there is a high demand for skilled employees’, employers are under pressure to maintain and grow their employee benefits to attract and retain talented staff.
Mercer Marsh Benefits (MMB) is providing the TEMi community with information on private health insurers in Australia, expatriate insurance, inpatriate insurance, localising employees and the cross over with corporate travel insurance. Please note, the below is not considered advice as each person’s requirements and insurance policies will differ, and we encourage readers to understand how their insurance policies respond for each of the types of insurance mentioned in this article.
The Australian Private Health Insurance Market – Overview
Health insurance benefits consistently rate highly on the employee ‘benefits wish list’ and there are many ways that employers are looking at and reviewing their Private Health Insurance (PHI) offerings. Some points to consider about the PHI market are as follows:
- Private health premiums are increasing at around 3% pa.
- The government provides incentives and disincentives for health insurance.
- Health insurance premiums are ‘community rated’ and not risk rated, with variable hospital cover types ranging from ‘Basic’ to ‘Top’. Top hospital cover may even include medical procedures linked to transgender* realignment.
- The government approves health fund rate increases annually every April.
- Private health insurance runs in conjunction with the public health system (Medicare) and not as an alternative.
- Fringe Benefits Tax (FBT) is payable on health insurance and a major disincentive to employers funding plans.
Private Health Insurance Plan Types:
| Plan types | Benefits of plan type |
|---|---|
| Subsidised Plans:
Where the employer pays some or all of the premium. This is common practice for US parented and/or the Hi Tech / IT / Mining. While not as prevalent, the Multinational It is not a common benefit outside these industries due to unfavourable tax treatment. |
– Access to corporate rates and products ( for over 20 employees) – Potentially favourable waiting period and claims treatment – Reduction in administrative workload for employers – Strong retention and attraction tool for companies |
| Voluntary Plans:
Where the employer pays none of the premium, but negotiates a retail discount with a preferred provider. |
– Access to discount retail rates – Minimal administrative workload for employers – No payroll involvement, employees pay via direct debit to insurers – Is a retention and attraction tool for, with no financial cost to employers |
| Individuals (Australians only):
If a company does not want to provide a plan, employees can access the MMB Corporate Health Insurance offerings from 3 |
– MMB Corporate Health | Marsh |
Expatriate Health Insurance – Overview
An expatriate or expat is an individual living and/or working in a country other than their country of citizenship. The arrangement can be temporary or long term.
If a person is on an expat policy, country requirements for health insurance must be considered;
- Some countries may direct that every single employee is enrolled in a government medical scheme i.e. France.
- An expatriate insurance policy will sit above that and act as a top-up, plus it will also provide coverage when a person is on home leave etc.
- Some countries will not have a required enrolment and your employee is relying on the insurance that you are putting in place for them to cover them and their families for emergency and routine medical responses.
Expatriate Health Insurance Plan Types:
| Global Insurer | |
|---|---|
| Geographical area | Worldwide |
| Minimum number of employees required | 2 |
| Overview | – Group policy – Depending on size Community or claims rated policies available. – Network of providers available for cost mitigation – Apps – Can assist with sustainability |
| Local General Insurer | |
| Geographical area | Worldwide |
| Minimum number of employees required | 10 |
| Overview | – Group Policy – Claims rated – Pay and claim model – Claims data available – Sustainability concerns |
Inpatriate Health Insurance – Overview
An inpatriate is a term used in HR (Human Resources) to refer to an employee who is transferred from a foreign subsidiary or branch of a company to work at the organization’s headquarters or another location within the home country.
- Inpatriates are similar to expatriates, where you as the employer are providing your employee and their families with access to Private Health insurance for emergency and routine medical expenses.
- If you are providing a commitment to your employees, the plan you provide will need to be comprehensive.
Inpatriate Insurance Plan Types:
| Group Plan with Private Health Insurer such as Medibank, BUPA etc | |
|---|---|
| Geographical area | Australia Wide |
| Minimum number of employees required | 1 |
| Group Plan | If you have a large number of employees going into a country where they are considered Inpatriates, then you can consider buying a Group Inpatriate policy |
| Group Plan with an Australian General Insurer | |
| Geographical area | Worldwide |
| Group Plan | – These plans are experience rated. – We can potentially obtain a quote, however unless you have other lines with this insurer, insurer will not be keen to offer inpatriate policy for just 1 or2 employees. – From experience they will be less competitive than a private health funds such as GU health. |
| Individual Private Health Insurance for an overseas visitor to purchase themselves | |
| Geographical area | Australia Wide |
| Retail Plan | Client buys themselves |
| Overseas Visitor Link | https://www.bupa.com.au//corporate/marsh-ovc |
Localising an Employee
When an employer makes the decision to localise an employee, there are a lot of considerations to be made:
- Visa requirements are to be considered.
- Are they applying for permanent residency?
AUSTRALIA EXAMPLE
- In Australia, employees remain on their expatriate plans until they are eligible for Medicare.
- After receiving their Medicare approval, an employee can then be enrolled in a local private health plan either via a group plan, voluntary plan or as a direct consumer.
- Some of our clients will move their employees onto a company plan for one year and after that the employee is responsible for their own insurances.
OVERSEAS EXAMPLE
- If an employee is localising in another country, they may be able to be enrolled in the medical plan that you offer local employees.
- If you have agreed to pay for a superior health insurance plan in the employees’ contract, you may be obligated to purchase additional insurance to top up the employee’s local cover.
- Your broker should be able to connect with a local office for assistance.
Expats, Inpats and Corporate Travel
There is a crossover between Expatriate, Inpatriate and Corporate Travel policies.
Expatriate insurance plans should be covering your employees for 24/7, 365 day a year for all medical purposes – emergency and routine.
Some expatriate policies do have traditional travel benefits included such as cancellations, lost luggage and missed connections etc., but not all do.
Gap Awareness: Corporate travel policies traditionally have a maximum of 180 days’ travel limit and they do not consider expatriates as travellers as they exceed this limit – what do you have in place to cover your expats when they are travelling? Please work with your insurance broker to understand this component of your policies.
Is Leisure Travel Covered?
Associated leisure travel is normally covered before and after authorised business travel, but please check your policy so as that you know how it responds. Accompanying Spouses and Dependants may also require cover – does your policy respond? Stand-alone leisure travel is not a usually covered and most Employer’s encourage their employees to have leisure travel in place. MMB does offer 3 pure leisure travel insurance offerings to our clients: Leisure travel insurance | Mercer Marsh Benefits | Marsh
MORE INFORMATION
The MMB team is experienced in providing insurance solutions. If any of the above has raised questions for you, or you would like further information, please reach out to the Mercer Marsh Benefits team at [email protected] or via 0497 398 332.
ABOUT MMB
The Mercer Marsh Benefits team designs insurance programs, complete benchmarking, place insurance policies and manage various Accident & Health insurances, which includes and is not limited to:
- Corporate Travel
- Group Personal Accident & Sickness (EBA cover)
- Expatriate and Non-Resident insurance
We bring specialist knowledge of claims management, contractual, legislative and international law considerations to our clients, to ensure compliance, cost effectiveness and sustainability of these valued insurances.
“Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”
