It may seem like the simplest and most obvious way to provide your overseas employees with health and wellness benefits. Sarah Dennis explains that appearances can deceive.
It may seem the easiest and most beneficial option to provide employees who are going on overseas assignments with a lump sum of cash in order to cover their health care and well-being needs. The company does not need to fund or source specific employee benefits. Employees can choose the support that best suits their needs.
Towergate Employee Benefits research indicates that 74% do exactly this. They provide their employees with an upfront cash payment rather than a set of employee benefits. This approach is not without its pitfalls.
Cash lump sums: What you need to know
Giving a lump sum of cash to an employee assumes that they will spend it on the health and wellness benefits they choose.
This approach is often taken by employers when they have employees working overseas. It seems like a simpler solution than having to research the laws and regulations in another country, and possibly in multiple countries. This is particularly true if the company employs employees in different locations.
Employers work on the assumption that employees will use the money to buy health and wellness products.
These could include private healthcare, life and income insurance, critical illness coverage, emergency assistance and repatriation. They might also include health screenings, wellbeing support, benefits that support a healthy lifestyle and mental health and resilience training.
How many employees use this money to pay for these types of assistance? Most employees are unlikely to be able to determine the most effective and appropriate form of support.
They are unlikely to know what regulations to follow, how to get the best benefits or at what price. It is tempting to spend the money on other things and to not buy benefits and insurance at all.
Employees and employers are both at risk
The risks to the employee of not buying health and wellness support may be fairly obvious: If they are ill, whether mental or physical, there could not be the support available to them for treatment or to allow them to go home.
A chronic or terminal illness could prevent an employee from working and leave their family stranded abroad or at home without any income.
It could be that they are caught in political unrest, or a natural disaster and do not have the resources to be rescued.
If an overseas employee is struggling with any of these issues, it would be reasonable to expect that their employer will provide immediate assistance.
For example, you could pay for an expensive medical procedure in another country that could cost thousands of pounds. An employee may suffer from a chronic illness or terminal condition that could prevent them from working and leave their family without income or support at home or abroad. It would be reasonable for an employee to expect that their employer will pay the bill.
Employers may be asked if they have fulfilled their legal and ethical duties to ensure the safety, health and welfare of their employees.
The employer may not know that the employee used the money for essential benefits such as health insurance and life insurance until it’s too late.
Employees working abroad are at a greater risk of requiring support than those based in the UK. It is possible that they are working in a place where there is no universal healthcare or medical treatment. They could also be facing a higher risk of political unrest. It is also possible that they are unaware of how and where to get support.
Simple solutions to complex problems
Employers often provide lump sums to employees who are based abroad, rather than a benefits package. This is because it’s easier for them.
Each country has their own rules and regulations governing what medical benefits and support an employee must receive.
It is likely that the rules and provisions will be different between a local employee of a UK-based company and an expat working abroad. The situation can also change constantly, especially if there is a less stable political climate than the UK. It is difficult to provide the right support and source it at the right cost.
It is best for employers to take the lead and consult with a global benefit expert. They can provide advice based upon local knowledge.”
It is simple to seek expert advice. It is best for employers to take initiative and consult with a global benefit expert. They can provide localized advice.
It is important to get the correct cover for your business. This will ensure that you are getting the best cover. This also gives the employer control over the situation. The business has a better purchasing power than the individual employee. A benefits adviser can ensure that all regulations and requirements are met, and that employees are covered for any eventuality.
Many global benefit programmes that are purchased by businesses themselves will include valuable additional benefits. It is often possible to take advantage of a global employee assistance program (EAP).
It is similar to the EAP that comes with benefits in the UK. However, a global EAP covers issues that may arise for employees who are based overseas. This can be a valuable resource that provides information on legal and financial issues and offers services like counselling to help ease the emotional strains associated with being away from home.
Communication is crucial
For the employer, a lump-sum payment may seem like an easy and simple option. The employee may be tempted to take the cash rather than purchase their own benefits. It is not the best option in either case.
Employers should take advice and ensure that they offer the best package possible.
This will help the employee to better understand that the offer is more valuable than a lump-sum of cash.
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