With the globalization of our economy, business travel to potentially volatile countries is a regular occurrence for many employees, as it was for several employees covered under this program. How would this policy respond if an employee was injured during an insurrection while conducting business on the employer’s behalf? How would the employee’s needs be addressed? What would be the employer’s legal responsibilities?
Out-of-country Emergency Medical – The plan also included coverage for out-of-country emergency medical treatment and travel assistance. But not all policies operate in the same way. Some will reimburse claims up to the amounts payable by the provincial healthcare system, which are likely to be insufficient based on the costs that could be incurred. Others will limit the number of travel days covered. The latter was the case for this employer’s policy.
In addition, the coverage had a maximum payment for out-of-country claims. What would happen if a covered employee, travelling on behalf of the employer, needed to be evacuated for medical reasons? How would the travel assistance provider deal with an evacuation from a country where a civil war has just erupted? If the provider is unwilling or unable to respond, the employer could face a complicated and expensive legal issue.
Eligibility and Uninsured Employees – One of the key areas of focus for the analysis was eligibility—who is actually covered by the group benefits plan? The eligibility clause stated that a person must be a full-time, active employee of the company in order to be covered. Due to the nature of the business, the employer had several employment arrangements with non-employees, such as contract personnel. In addition, the board of directors included both employees and non-employees. Part of a director’s duties is to travel, on the employer’s behalf, to off-site board meetings, which may occur in other countries. As the non-employee directors were not eligible for coverage under the plan, this could have resulted in a major liability for the employer should they be injured or become ill while travelling.
Benefit Limits for LTD, AD&D and Life – Like most plans, this plan included benefits limits based on the needs of the general employee population. While the limits addressed the needs of most employees, the higher earners were under-insured and were probably not even aware of the gap.
The issues identified in this case study are not unique to this employer—many plans likely have similar gaps. Depending on the employer’s specific circumstances, there are a number of options to consider. War risk coverage can be purchased to mitigate the risk of accidents resulting from political unrest or civil war during business travel. Specialized emergency out-of-country medical coverage, designed to address contingencies that may arise while travelling to remote or hostile areas or to compensate the plan’s limitations, is available. Coverage for non-employees is also available, as is higher limit AD&D coverage to mitigate the risks of any under-insured higher earners.
Guarding your plan against all risks is a formidable task. However, conducting a gap analysis and exploring solutions to bridge any gaps may help plan sponsors ensure that they—and their plan members—are covered against the special risks that can be anticipated.
Lesley Bridger is vice-president, underwriting, and Eddy Levy is vice-president, sales and marketing, with ACE INA Life Insurance. lesley.bridger@ace-ina.com; eddy.levy@ace-ina.com
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