Companies with overseas operations typically offer health insurance to expat staff. Offering this highly valuable perk in your compensation package can pay huge dividends in terms of attracting the best talent and keeping them happy while away from home.
A good insurance package has additional benefits for you and your potential staff:
● Bolsters recruitment and retention
● Can be included on a VAT invoice without paying 10% tax
● Cost of health insurance is tax-exempt in many jurisdictions
● Group plans are generally better than individual plans:
○ More plan choices
○ Pre-existing condition coverage
○ Significant group discounts
○ Payment instalment options
So How Do You Pick the Best Option for Your Company and Employees?
There are two basic types of health insurance policies available in the Southeast Asia market.
International:
Normally, the premium is based on age and plan selection. Inpatient and evacuation benefits are included by default, with the option to add other benefits, including outpatient, dental and maternity. Benefit limits are typically high, suitable for the cost of expat healthcare facilities, where most provide direct billing services. This is obviously the preferred type of policy for your expat employees.
Pros: More suitable to expat needs, Higher benefit limits, direct billing at more expat-focused places and service outside of Vietnam
Cons: Costs more, prices increase a bit every year regardless of claims history
Local:
Local style group plans usually include many benefits with much lower annual benefit limits. Pricing is fixed regardless of age. You can set the budget per employee and the provider will manipulate the policy within that budget.
Pros: Cost-effective, easy to sign up for, costs can remain level if low claim history
Cons: Lower limits, provider customer service isn’t as good, can be large price spikes with high claims
Plan Design
Depending on the makeup of your staff, you can consider structuring your group plan in a variety of ways, including:
● One Provider, One Tier: This means all employees are gathered under the same policy, with the same benefits. The alternative would be to offer a policy just to your expat staff
● One Provider, Multiple Tiers: This plan includes different tiers, which offer higher or more benefits for more senior and/or expat staff. This approach is often tightly regulated but there are ways to do it.
● Multiple Providers: This entails splitting different policies/providers based on seniority and/or expat status. The benefit of this method is that a single provider will often not meet all the needs of your expat staff, while still covering your regular employees and staying within budget.
Payment
You can elect to foot the bill for all, or a portion, or none of the health insurance premiums. If you share the cost, you can deduct the employee portion from their monthly pay. Another approach, often adopted by smaller companies, is to give their expats an insurance stipend and let them choose their provider, plan and benefits.
You can always elect to do nothing, but in the current job market, what’s the cost-benefit of taking a wait-and-see approach when your competitors might attract better talent simply because they planned ahead?
Setting up a group health plan that focuses on your critical expat staff needn’t be too difficult or time-consuming. Tenzing Pacific Services can assist in making solid decisions from among a wide range of insurers and policy options, all at zero additional cost to you.
