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Avoid these 5 common corporate health insurance mistakes

Avoid these 5 common corporate health insurance mistakes

In China, as in many other countries, attracting and retaining the best employees can provide companies with an edge over their competitors. While there are many different tactics you can employ to ensure that your staff are the best, there is one that is increasingly in demand by almost all employees: company-sponsored health insurance plans. Having a company health plan can bring a variety of benefits, most notably increased productivity and decreased sick leave, both of which directly impact a company’s bottom line. However, if the plan is not implemented correctly there could be a negative impact on your Return on Investment. If you are looking to avoid this when you implement your plan here are five common corporate health insurance mistakes you should avoid.

Mistake #1: Not implementing the right coverage

Sure, this might seem like it’s pretty obvious: Not selecting the right coverage will inevitably result in poor plan performance and poor satisfaction with the plan. But the problem is, it is easier said than done to select the best plan for your employees. There are a huge number of factors involved in corporate health insurance, factors that all need to be considered and addressed in order to not only identify but also implement coverage.

In short, a lot can go wrong and while a lot can be done to avoid this mistake there is one thing that is absolutely important that you get right: the type of insurance coverage you secure.

In China, there are two types of private health insurance plans available to secure:

  • Local health insurance plans – Plans designed to provide cover of healthcare in China only.
  • International health insurance plans – Plans designed to provide cover not only in China but also worldwide.

The core concept of these two types of plans is similar: They provide coverage of most health care employees will pursue. It is important to note here that these plans are on top of the social insurance scheme that all employers and employees need to pay into.

The major difference between the plans is not only in the area they cover, but the fact that international health insurance plans tend to have higher coverage limits which allow employees to seek care at more expensive and higher quality private medical facilities.

From our experience, the major mistake made by companies here is that they don’t select the right level of coverage for their employees. For example, if you have employees who travel frequently for work a local health insurance plan will not cover them outside of China. If they get sick, they will have to pay for care out of their own pocket. It would be better to secure them international coverage.

Mistake #2: Assuming your plan covers pre-existing conditions

This is a common corporate health insurance mistake made by companies all over the world as historically, group plans have included what insurers refer to as a ‘Medical History Disregard’ or MHD. This clause means that insurers will not consider a person’s existing medical conditions when they join the plan. In other words, your pre-existing conditions are covered.

This is different from individual plans which normally do not cover pre-existing conditions. The mistake here however, is assuming that the MHD is automatically included in any group health insurance plan.

The truth here is that many insurers will usually only consider adding MHD to group plans that cover over a certain number of people, usually between 10 and 20. So, if you are selecting a group plan for say nine of your employees, you should carefully read the plan details provided by the insurer or ask your broker about MHD and whether it is covered.

In some cases, you might be able to negotiate with the insurer to have it added to your plan, but it might come with a higher premium.  

Mistake #3: Not understanding the eligibility requirements of the plan

Health insurers who offer corporate health insurance plans often include what’s called compulsory membership. This clause states that all employees of the same level must be added to the plan.

For example, if you implement a plan with local coverage for your middle managers then all middle managers will be required by the insurer to join the plan.

The mistake companies often make here is that they don’t fully understand how this clause works or that it is actually included in the plan.

To avoid this, it is important that you read the plan documentation and ask the insurer whether this clause is included and how it works as some insurers will define it differently. Beyond that, in many cases you might be able to actually negotiate with the insurer over this clause. For example, if they say that all employees must be covered you might be able to negotiate so that only employees at a certain level need to join the plan.

Mistake #4: Leaving employees out of the selection process

One of the key success factors of any group health insurance plan is whether your employees feel it is valuable and will use it. The mistake here is that companies don’t involve the employees when selecting a plan and ultimately implement a plan that is not used by staff, or doesn’t meet their needs.

If a plan is not utilized, you are essentially throwing good money after bad and could actually end up losing money. To avoid this, it is a good idea to discuss with employees about what they want in terms of coverage and what they need. From there you can set expectations and look for plans that meet the majority of their needs.

Mistake #5: Going with the cheapest option

These days, businesses often operate on increasingly thin margins and when managers go to implement a health insurance plan there might be a bit of sticker shock around the actual up-front cost. This can often lead to businesses going with the cheapest option available.

Businesses that have pursued this strategy have often found that it ends up costing them more in the long run. For example, cheaper plans might have lower levels of service meaning that if there are claims issues or concerns you might need to spend a fair amount of time dealing with them instead of focusing on more important things like running your business.

What’s more, plans that are cheap now might see a massive jump in premium in the near future as insurers realize that they don’t have enough premiums available to cover claims. You could quickly find that your cheap plan is now the most expensive option.

How can I avoid these corporate health insurance mistakes?

One of the best ways to ensure that you find the right corporate health insurance plan for your employees and your company is to work with a broker like Pacific Prime China. Our team of dedicated corporate advisors can help you identify your insurance needs and then select, implement, and even manage a solution that works for your business.

To learn more about how we can help, contact us today.

Posted by rmcbroom in Group Health Insurance

Looking at medical insurance inflation in China

As we reported last week, we have released our latest report on international private medical insurance inflation (IPMI). The report is available as a free download now from our website here. As we mentioned in the last article, IPMI premiums in China inflated by an average of 12.06% in 2016, up from 9.50% in 2015. In this article, we take a look at how China compares regionally when it comes to medical inflation and some China-specific drivers behind the increased inflation.

 

Medical insurance inflation in China compared with Asia

From the chart below we can see that IPMI plans in Asia saw an average inflation of 9.90% in 2016, which was slightly higher than the global average of 9.22%. This is intriguing in that it could indicate an emerging trend where inflation in Asia will track higher than globally.

For 2016 however, China was not actually the location with the highest health insurance inflation, that honor went to Hong Kong which saw premiums inflate by an average of 13.03%. This would put China as having the second highest average inflation figure of the countries included in the report. The third highest is Singapore, which saw an average inflation of 11.18% in 2016.

China’s location as the country with the 2nd highest average medical insurance inflation is not overly surprising, especially when you look at our Cost of Health Insurance 2016 report which found that China was the third most expensive country for health insurance out of 95 countries.

 

Breaking China’s inflation down by insurer

Aside from presenting the average inflation figure for the country, this report also presents the average inflation by insurer.

As you can see from the graph above, inflation in China ran anywhere from 6.62% to 31.21%. As with the global ranking of insurers: Allianz Worldwide Care, AXA PPP Healthcare, Bupa Global, and William Russell are all among the providers with the lowest inflation.

One thing to note here is that IntegraGlobal’s 31.21% increase is not reflective of the premiums they charge – they are not charging the highest premiums in China. Rather, their inflation figure shows an adjustment to market rates, putting their plans about on par with the other providers in the country.

 

Country specific IPMI inflation drivers

In the report, there are 7 drivers of IPMI inflation identified as having an impact on a global scale:

  • New medical technology
  • An imbalance of healthcare resources
  • Increased compensation for healthcare professionals
  • Healthcare overutilization
  • Unstable economies
  • Changing population dynamics
  • The increasing availability of technology

Insurance in China, especially health insurance, has certainly been affected one way or another by the above drivers, especially unstable economies, changing population dynamics, and imbalance of healthcare resources. Of the above drivers one of the most influential is changing population dynamics.

Everyone who has lived in, or followed China’s rise to prominence has seen a drastic shift in population wealth. According to an article from Business Insider in 2015, China has the largest number of millionaires in the world, with the number expected to grow in the near future. Beyond that, China also has the largest middle class in the world. What this has equated to is a larger number of people with spending money.

As such, people in China are increasingly demanding better products including better health care, with an ever increasing number of high net worth (HNW) individuals seeking care from private hospitals. This increase in demand has seen the number of private hospitals boom in the country, and with it have come higher prices. To offset this, local HNWs have been increasingly turning to international health insurance as a way to offset the costs.

Pacific Prime’s China office has certainly seen an increase in the number of local HNWs securing coverage and submitting claims. This, in turn, leads to higher costs for care and therefore higher premiums.

Interestingly. It is well known that the number of HNW expats in China is decreasing. This should lead to a decrease in demand for IPMI, but the opposite is happening. The higher concentration of HNW local citizens demanding coverage is looking to eventually eclipse demand for coverage in China and therefore continue to drive an increase in inflation figures.  

While increasing demand and changing demographics is certainly not the only factor driving IPMI inflation, it is highly likely that it is one of the most important, especially for China. In the future, it would be entirely possible to see inflation continue to increase, and could possibly remain higher than the global average.

To learn more about IPMI inflation, the other drivers, and how the other countries are ranked get your FREE copy of the International Private Medical Insurance Inflation – 2017 report on our website now.  

Posted by rmcbroom in Health Insurance
Insurance options for kids going to school overseas

Insurance options for kids going to school overseas

If you are planning on sending your child overseas for education, you undoubtedly already know there are a number of things to consider. One such thing to consider is your child will need health insurance. Here, we take a look at the common solutions available to parents whose children will be traveling abroad.

 

Common insurance solutions for students studying abroad

When going abroad for work or study there are usually a number of health insurance solutions available for people to consider. Here is an overview of the 3 most common types of health insurance secured by students studying abroad.

Travel insurance

These plans are designed to provide emergency medical cover to people while they are outside of their own country. Generally speaking, most travel insurance plans are a set period in length, usually providing cover for either individual trips of up to a set number of days or numerous trips of a set length (usually less than 30-60 days) over one year.  

Travel insurance plans are popular for students studying abroad not only because they offer medical coverage but they also cover other travel related incidents such as flight delays, lost luggage, and even emergency medical evacuation back to your home country.

The one thing to be aware of with these plans is that they are not designed to provide elective medical care while overseas, rather they are designed for medical emergencies and provide just enough coverage to see you well enough to return to your home country. If you plan on going to the doctor while studying abroad, the visit likely will not be covered by this plan.

Health insurance from a local provider

Almost every country popular with students will offer some form of local insurance. These plans are designed to provide citizens and residents of these countries with adequate health insurance coverage in that country only.

Generally speaking, there are two types of local insurance available in most countries:

  • Local plan offered by a private insurer – These are plans designed and sold for and to local markets by insurers who have licenses to operate within that country.
  • Coverage provided by the government – These are plans or coverage offered by the local government.

As mentioned above, local health insurance plans are designed to provide adequate coverage for most residents. In most cases, people with these plans will be visiting the public health sector which in many countries is subsidized by the government. As such, you will usually find that these plans have relatively low levels of coverage, or have limits placed on the amount you can claim for care.    

It should also be noted here that while many countries have health care or health insurance sponsored by the government, there are usually strict requirements as to who is eligible for this type of care. A good example of this would be Singapore with their Medisave program. Permanent residents and citizens of Singapore pay a percentage of their monthly income into a savings account that can then be used to cover the cost of healthcare for themselves and their family.

This savings account is not available for foreigners, which means their children would also not be able to benefit from the offsetting. If they were to get sick, they would need to pay the full cost to see a doctor.

Another example of this would be in Canada where all citizens and many residents have access to provincial health care, and students are required to have health insurance. The issue is, in some provinces, foreigners are not eligible for provincial insurance. This means that you will need to secure a plan from a private insurer.  

Health insurance from an international provider

The other common option for students going abroad is an international health insurance plan. These plans, offered by the global or international branches of major insurers, provide worldwide coverage. In other words, your child will be covered in your home country, the country they study in, and any country they may visit while overseas.

International health insurance plans are also designed to offer high coverage limits which means you can visit nearly any medical center and receive quality health care. These plans are popular with many expat families and companies who send their employees overseas as they afford the policyholder the ability to visit top quality healthcare.

The main concern many people have with these plans is that they are considerably more expensive than local or travel coverage.

 

Does my child actually need insurance while studying abroad?

This can actually be a fairly tough question to find a concrete answer to. Some schools and countries will require a valid insurance plan to be secured in order for a visa to be issued while others will simply recommend it.

For example, if your child is going to the going to school in the US, it is mandatory for some student visa holders to secure health insurance coverage that meets ACA (Affordable Care Act) requirements within the US.

One of the best pieces of advice we can offer is that it would be a good idea to contact the university or school your child will be attending. The reason for this is that some schools will actually offer coverage as part of the school fees. This is particularly common for schools in the UK, Canada, Australia, and even some in the US. These plans are usually local cover only and are affordable, however they may not be available to some students or will often have fairly strict limits and rules attached to how the plan can be used.

And of course, in many cases, it would be advised to secure a health insurance plan for your child in case they get sick and need to visit a doctor.  

 

Which health insurance plans should I purchase for my child?

In Pacific Prime China’s experience, it would be advisable to secure both a travel insurance and an international health insurance plan. The reasoning behind this is that the travel insurance plan will cover your child while they are traveling between your home country and the country their school is located in. There is always a chance that their luggage could be lost, or there will be delays while traveling (especially during the winter in the northern hemisphere) and having coverage to help offset the additional costs these bring can be a big help.

When it comes to actually living in their new country, an international health insurance plan will help cover the costs of any care needed. This is especially important in countries like Hong Kong, Canada, the UK, and the US, where the cost of health care can be prohibitively expensive if you don’t have access to the government/public health subsidies. These plans will also cover your child when they are at home and can have additional coverage elements like dental, and vision added thereby allowing your child to visit a dentist while they are at home on break.

One of the major advantages an international health insurance plan offers for children studying overseas is the fact that they will usually have emergency evacuation coverage. This means that if your child gets sick while at school you may be able to get them moved back to their home country, or a location where relatives are who can help them recover.

If you are looking for a health insurance solution that will cover your child while they are overseas, contact Pacific Prime China today. Our experts will be happy to discuss your options and help you find a plan that meets your whole family’s needs.   

Posted by rmcbroom in Expat Health Insurance, General Insurance
Govt clamps down on foreign insurance in China

Govt clamps down on foreign insurance in China

Over the past two or so years, there has been a constant financial trend in China that has piqued the interest of investors, companies, and governments alike: The continued capital outflows out of the country. According to the Wall Street Journal, as of September 2016, capital outflow from China has been recorded in each of the previous 24 months. The article goes on to note that the outflow for the year is pegged to be just over USD 400 billion. While this is certainly high, the Chinese government has been taking steps to reduce it. These steps are varied both in scope and success with the latest being a tightening of regulations around foreign insurance products in China. In this article, we take a look at the two latest regulations and what it means to all people considering insurance in China.

 

The first regulation: Using UnionPay cards to pay for insurance outside of China

First off, it is important to note here that clampdowns by the Chinese government on insurance products are not a new thing, especially when it comes to actions that are aimed at stemming the constant capital outflow. In fact, this is the second such action taken in less than a year. Back in March of this year, we wrote an article on the regulations introduced around the purchase of insurance products outside of China using Chinese bank cards, more specifically UnionPay cards.

With this regulation, holders of UnionPay cards issued in China had a limit of USD 5,000 per transaction on insurance products. Recently, the Chinese government decided to take this regulation another step further.

In late October, UnionPay (which is the national credit and debit card issuer in China) announced that they were going to start halting the purchase of almost all insurance products in Hong Kong for people who use UnionPay cards issued in China.

What this means is that if you have a UnionPay bank card, including both debit and credit cards, that was issued by a bank in China, you will not be able to buy most insurance products outside of the mainland using that card.

The small bit of good news around this recent announcement is that there are some exceptions to this rule: You can still buy insurance plans that are related to tourism, such as travel insurance.

The second regulation: Cracking down on the sale of foreign insurance products in China

The second regulation introduced at the end of October is directly related to the sale and purchase of foreign insurance products, only this regulation focuses on foreign products available in China.

According to the Asia Insurance Review, “Officials of the Chinese insurance regulator CIRC have recently visited foreign life insurance firms and intermediaries in Beijing as part of investigations into the illegal sale of insurance products in Hong Kong to mainland Chinese.”

What appears to be happening is that some unscrupulous insurers are selling insurance products from locations outside of mainland China, mainly Hong Kong, to citizens in the country.

The CIRC is cracking down on these insurers primarily because some, not all, are selling using methods that some perceive to be misleading and are in fact selling what the government views to be illegal products.

What does this mean for people looking for insurance?

The problem that you need to be aware of here is that it is illegal for companies in China to sell insurance plans from foreign institutions that don’t have a license to operate in the mainland. This means that if you purchase one of these plans and have problems with say submitting a claim, you will have no legal means of recourse which pretty much equates to not having effective coverage.

The biggest thing to point out here is that if you are looking for insurance in China, it is advised that you buy a plan from a licensed insurer within China. That said, if you are looking to purchase plans in another country, e.g., you have purchased property in Hong Kong and need to secure fire insurance, it would be far better to purchase coverage from an insurer in that country, not from an insurer/company in the mainland offering coverage in that location.

 

What about those holding international health insurance plans?

If you already have a plan in place when you move to China there should be no problems regarding the legality of coverage as it was secured before you move to the country. But if you are already in China and are looking for a plan, it would be advisable to select plans offered by insurers with a license to operate within the country.

The reason for this not only has to do with legality of coverage – almost all major international insurers offer legal plans in China – but due to the fact that onshore plans (those sold within China) offer a number of additional benefits including:

  • The ability to pay in RMB
  • CIRC protection in litigation cases
  • Plans are serviced locally – This is very important for major issue like case management, etc. as insurers on the ground will have a greater understanding of local regulations and the healthcare system
  • Fapiao invoices are available
  • Larger direct billing network, including with some public hospitals

In our experience, if you are going to be living in China then it is generally a better option to secure an international health insurance plan from a China-based insurer, especially if you plan on seeking medical care within the country.

 

How can you identify health insurance plans that are legal in China?

The easiest way to do so is to work with a licensed broker like Pacific Prime China. Almost all of the major international insurers and plans we work with globally are available in the country with most of the insurers working with local partners. We only sell products that are legally licensed to be sold in China meaning you receive top quality coverage without the potential hassle of legal issues.

If you are looking to learn more about your health insurance options, please contact us today.

Posted by rmcbroom in Expat Health Insurance
Tips on comparing health insurance plans in China

Tips on comparing health insurance plans in China

In the past couple of decades the number of insurers in China has increased from but a handful to over 100, a market which is predicted to do nothing but grow in the near future. This is a great thing for many consumers as many of these insurers offer a wide variety of insurance products, with a large number focusing just on health related insurance products. The one downside to this is that not all plans are created equally and when you start to compare health insurance plans in China it quickly becomes apparent that there is a vast difference in the quality of plans available. This makes it hard for many of us to actually find a plan that best meets our needs.

To help make this process a little easier, Pacific Prime has recently released a new infographic. This infographic, available for free from our website, covers the three most important things you should keep in mind when looking for a new health insurance plan.

Here, we take a look at the three elements and how they can help you wade through the huge number of plans available, to find the best plan for you.

Element 1: The price

When many people start looking for health insurance, the price is arguably the single most important thing they will consider. After all, if a plan is out of your budget then you likely won’t be considering it, no matter how good it is. The thing here is that when considering international health insurance plans you may be shocked at how much they can cost.

With high limits and international coverage, this type of health insurance plan is designed to help cover the cost of care at not only the best private facilities in China, but also abroad. Simply put, they allow you to pick which hospital you want to receive care at. The thing is, many of these facilities are expensive (some hospital visits can cost upwards of USD 100,000)  and the cost of health care is increasing, so premiums will be higher for these types of plans.

While the price you pay to secure this type of insurance may be higher, it does offset the high cost of care and makes them completely worth it for many living in China. That said, the premiums for these types of plans will vary considerably especially if you use an online health insurance comparison tools like the one available on Pacific Prime China’s website.

Take for example, the below screenshot of the plan premiums our online comparison tool prepared for a 30-year-old female living in China:

Image showing the cost of health insurance in China

As you can see, the premiums cover quite a range with the lowest being RMB 522/month and the highest being RMB 1,516. This is just the first 9 results of close to 300 plans available to consider. The question is, why is this range so high? There are two main reasons behind this:

  • Some plans are quotes with deductibles – This is the amount you will need to pay before medical coverage will kick in.
  • Some plans will offer different levels of coverage – Plans are designed to often cover different types of care and with different limits. Generally speaking, plans with higher premiums will cover more.   

When looking at plans online, it is important to look at a number of elements aside from just the price. For instance, the plans in the image above have different levels of coverage and some even have deductibles. This will change the overall premium you pay, and the good news is that you can usually play around with the level of coverage offered.

It is also important to note here that it would be a good idea to determine your level of risk aversion when considering plans. What we mean by this is try to think about how much you are willing to pay each year or each doctor’s visit before your insurance will cover the rest (the deductible). If you are financially stable and feel that you won’t visit a doctor on a regular basis then a higher deductible could be considered, as it will reduce your overall premium.

On the other hand, if you are considering visiting a doctor on a regular basis then a high deductible may not be the be right decision financially.

Element 2: The level of cover

Insurers in China offer health insurance plans with three major levels of cover:

  • Inpatient only – These plans will only cover medical care where you are admitted to a hospital by a doctor, usually for more than 24 hours.
  • Inpatient + outpatient – These plans add on outpatient cover which includes care at clinics and care where you are not admitted to the hospital.
  • Inpatient + outpatient + maternity – Covers both of the above as well as maternity. Many insurers will refer to this level of coverage as “full-cover”

Of course, as you look around you will notice that some plans will vary from the levels of coverage above. For example, some may offer dental or optical coverage instead of maternity, etc. Generally speaking, however, these extra benefits (e.g., dental, optical, wellbeing, etc.) will be considered as add-ons meaning you can certainly add them to your plan, but will need to pay an extra premium if you want them to be covered.

What we suggest when looking at different plans is to add and remove levels of coverage e.g., outpatient, dental, vision, etc. This can give you a good idea of how much you can expect to pay if you want to secure a plan. Bear in mind here that the more coverage elements you add on, the higher your premium will be.

Element 3: How you will use your plan  

The final element to consider when comparing health insurance plans in China is how you plan to use your insurance plan. In some cases, you may have a pre-existing condition or will require extensive medical care. If this is the case for you, it would be advisable to keep this in mind when comparing plans. The reason being that some plans will not cover pre-existing conditions, others may deny coverage completely, while others yet may add what’s called a loading (an extra premium you need to pay for your condition to be covered).

You will need to discuss this with your broker or the insurer before purchasing a plan, as this could drastically change the level and type of coverage you secure.

Beyond that, it is important to note that the service level offered by insurers varies drastically. What we mean by this is that when it comes to things like paying claims, submitting information, securing the plan, disputes, etc. you will find that insurers vary in quality. Some will pay claim reimbursements within days, others may take months and followups. This can be annoying for some, especially if you secure a reimbursement plan where you need to pay for care out-of-pocket and then submit a claim.

One way to not only uncover the best health insurance plan in China is to talk with Pacific Prime China. Our team has an in-depth understanding of the market in China and uses tools like our free infographic to help you identify a plan that not only meets your budget but also offers the level of coverage you require.

Contact us today to learn more.   

Posted by rmcbroom in Expat Health Insurance