CHEVY CHASE, MD--(Marketwire - April 7, 2010) - Professional firms face challenges when offering overseas employees life and disability insurance programs that do not match US plans, Vernon W. Holleman III, president of The Holleman Companies, writes in an article in Employee Benefit Plan Review.
Employers should give international employees benefits comparable to their US counterparts and ensure that coverage takes into consideration local rules, regulations, and tax laws.
Workers abroad must "know the coverage will be there in the event of a claim and receive the same level or quality of coverage as their US counterparts," Holleman writes. "But US companies find it difficult to acquire adequate protection for their professionals" because domestic carriers want to limit risk.
Many major US insurers will not include international employees in a company's US group long-term disability or group life insurance plan. In addition, contractual language, such as definition of disability and other contractual terms, can be severely limited.
"In limited cases, US carriers will include -- albeit reluctantly -- international employees in the life or disability benefit plans," Holleman writes. However, this can lead to unanticipated regulatory, legal, or tax problems in the foreign country at claim time for the employer and employees, whether expatriates or local nationals.
"It is thus the responsibility of the employer and employee to ensure claims are honored," Holleman said. "This is the chief reason for disparate plans and unequal benefits for international professionals."
Unifying coverage so that all employees worldwide enjoy comparable levels of coverage is the best solution. To accomplish that, benefits managers should work with a broker who understands the international disability and life market and who can coordinate the underwriter, administrator, insurer, and the reinsurer, he writes.
Employee Benefit Plan Review is published by Aspen Publishers.
The Holleman Companies, Chevy Chase, MD, is a specialized insurance advisory firm focused exclusively on business continuity, executive benefits and insurance advisory, including charitable giving. More information is online at http://www.hollemanco.com or by contacting the firm at connie@hollemanco.com or 301-656-8689.
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Contact:
Henry Stimpson
Stimpson Communications
508-647-0705
Henry@StimpsonCommunications.com