Looking for Global Healthcare Coverage: 3 Things International NGOs Should Consider
One of the biggest challenges for any company’s human resources (HR) department is choosing the best healthcare coverage possible for its employees. However, for international NGOs with global workforces, the challenge goes beyond balancing cost and coverage. Different employee types — from third-country nationals to expats — in various remote locations complicate matters for HR professionals in NGOs looking to find equitable coverage or change insurance providers.
The good news is, here at Allegiant Global Partners, we have years of experience that can help make an INGO’s search for global healthcare coverage easier. HR professionals already know that making coverage changes is not simple, but to try and make more sense of the process, we’ve broken it out into two phases. Read on to learn more about the questions to ask and the things to consider when searching for new healthcare coverage.
Phase One — 3 things INGOs should consider
Benefit equity for INGO workers
Global organizations employing Local Nationals (aka employees hired in their own country) often struggle with benefit equity. These employees have historically been exempt from some of the standard benefits other employees receive. Specialist care, emergency transportation, or mental health resources are often not on the menu for these populations. In practice, this has meant an INGO in the U.S. can provide fewer benefits to a Kenyan employee hired to work in Kenya than to an employee in an equivalent position in the U.S. A complicated combination of precedent, cost, and complexity is behind this disparity in duty of care.
However, organizations are increasingly looking to rectify the situation and provide better benefit equity for their employee populations. Not only is it the right thing to do for organizations trying to do good in the world, it can help save you money in the long run. While an equitable benefit plan can help your bottom line in many ways, the most obvious way is employee retention. Data suggests recruiting a new employee costs between $4,000 and $20,000. Our internal data shows that health insurance can be as low as just $800 per year in Africa, so it’s easy to see how an equitable benefit plan can help save organizations money.
But if achieving benefit equity were easy, we would not have to keep discussing it. From local hurdles like a lack of infrastructure or providers to the age-old issue of budget, companies run into some problems on the road to benefit equity.
Balancing costs and coverage
Cost is almost always a factor when organizations want to change their healthcare coverage, but years of experience tell us that organizations have to look at more than just the sticker price.
First, HR teams must ensure they save enough to make the change worth it. Typically, the cost to change plans is about 10% of the overall expense. With that in mind, our team advises clients to switch health insurance plans only if they save at least 15%-20%.
Next, organizations must ask the right questions to ensure the employee population's needs are covered. Benefit equity isn’t always about employee type or location; sometimes, it's about finding a plan that meets everyone’s needs. Gender-affirming care, fertility needs, and pre-existing conditions are often excluded by plans and overlooked by employers. Benefit specialists must inquire about this coverage to ensure employees are covered on all fronts. (To learn more about the questions to ask anytime you change insurance plans, read this blog post.)
Safety and security for INGOs
So far, we have focused on healthcare coverage, but Safety & Security (S&S) is also a concern for INGOs operating in far-flung locations. Global emergencies, like pandemics and climate-induced crises, mean you need to think beyond simple healthcare coverage to ensure your employees are covered in the event of an emergency.
Historically, organizations have chosen to react to these “what ifs” through human resources and medical benefits — but taking proactive measures with an S&S plan can help avoid most problems. To identify potential holes in standard healthcare coverage, go through the plan with a fine-toothed comb to determine what your new healthcare plan covers and whether an S&S plan can help fill the gaps. What happens in the case of an epidemic or pandemic? If there is a natural disaster, will your employees be able to get out of the country? Will your insurance provider pay to airlift your employees out of harm’s way in case of civil unrest? If not, it may be time to consider whether or not you need to add S&S to your coverage.
Phase 2 — Creating a benefit package
Now, it’s time to move beyond asking questions — and getting answers — about the larger, overarching questions that inform your strategy and move on to action.
Selecting a mode of benefits
In the first step, HR pros must select the global product that best provides coverage for staff. This means choosing between three main options
Preferred Provider Organization (PPO) — This product has three tiers of benefits: Outside the U.S., In-Network in the U.S., and Out-of-Network in the U.S. Employees will have access to network and non-network providers within the United States. Outside of the United States, the plan operates like an “indemnity” plan and allows the staff to access care with any licensed physician or facility. This product is best for employees that have a regular need to seek care in the United States.
Indemnity/Schedule of Benefits — This product has a formal schedule of benefits. Traditionally, it does not offer continued access to the United States healthcare system but does provide emergency access in some instances. Depending on the region and carrier, benefits could be tied to a local usual and customary schedule, but this only applies to localized plans. This product is best for employees who do not have a need to access care in the United States, other than incidental/urgent care when traveling.
Accident and Health Coverage — This product is designed as an indemnity-style program built to cover an “incidental” claim related to business travel. This can cover emergency medical coverage, medical evacuation coverage, security evacuation coverage, and other travel-related concerns. This product is best for “travelers” and not long-term assigned employees because it is not meant to cover the day-to-day healthcare needs, it is designed for “incidental” urgent or emergent healthcare needs.
Each type of plan is better suited for some use cases than others. To learn more about which plan might be right for a particular organization, book a complimentary consultation.
Determine a plan design
To select the right plan design for your organization, you must understand the demographics of your current employees and those you want to attract. If you have a younger demographic that typically has lower pay, consider offering a plan that has a lower deductible with copays. Alternatively, if your staff makes a decent salary and skews older, you should consider a plan with a built-in savings mechanism, like a high-deductible health plan (HDHP) with a health savings account (HSA).
You should also take your location into consideration when deciding on the right plan features. For example, if your area has an extensive list of providers within a network, offer a plan that makes it more costly to seek care out of the network to help keep costs under control. Or you may select a product that only offers “in-network” access. The plan design development allows the employer to create a product that fits their specific needs and demographics. In addition, if you are trying to solve for a global population (meaning U.S. Expats, Third-Country Nationals or even Local Nationals) you will want to design a plan that has very little cost sharing built in for two main reasons:
It makes for a significantly easier transaction between the employee and the local medical providers.
It creates a better overall experience for your employees.
Financing/Budget
In the U.S., people who receive healthcare benefits through their employers are familiar with one way of paying for their coverage; however, it can be more complicated than that — especially on a global level. When looking to secure benefits for INGO employees, there are a few models to consider:
Traditional insurance: In this model, employers pay premiums and the insurance carrier takes all the risk. This also means that products are filed and regulated by different global insurance agencies. This is great for fixed-cost budgeting and planning.
Self-Insured: In this model, third parties manage the claim process and overall administration, but employers are at risk for the total cost. This also means that this is not “insurance” and can sometimes allow for more flexibility with compliance.
International Pooling: This model is often used by larger multinational organizations to pool the risk of several local programs. Local contracts are consolidated into one larger risk pool, and clients can benefit from positive performance in one geography vs. poor performance in another. This option is usually reserved for groups with 1,000 employees in two or more geographies.
Captives: This model is a licensed insurance company fully owned and controlled by the insured, which means it operates almost like a hybrid self-insurance program. The insured sets up its own capital to cover the risk and then reap the rewards and risks associated. The insured will only assume a portion of the risk and then seed the rest to a “reinsurance” arrangement to help protect them from catastrophic losses. This arrangement is often talked about as a golden solution for global organizations, however it is our opinion that a captive model really only works when the marketplace does not understand the risk or is unwilling to accommodate the risk. Contrary to other advisors at Allegiant and In our INGO world, we do not see this as a relevant solution in most instances.
Again, each of these options has pros and cons, which brings us to…
Bonus Tip: Consider working with a specialized broker to manage the process
Insurance is complicated under the best of circumstances, but for HR departments in INGOs, there is so much more to consider. Insurance brokers can help by bringing industry insider expertise to the negotiating table. Underwriting experience and actionable advice can save companies time and money, and when every dollar counts — like it so often does for mission-driven INGOs — you cannot afford to undertake this journey without an expert guide.