Overseas Employees at Risk
A rogue wave pulled a vacationing military contractor walking on a foreign beach into the ocean. He hit his head on a rock and was paralyzed.
Because his employer sent him on the trip for some R&R, the contractor’s Foreign Voluntary Workers’ Compensation insurance responded for his medical injuries even though he was vacationing instead of at a job site.
Luckily for the worker, his employer had the right coverage in place to forestall painful financial and health consequences.
But a substantial risk for employees and the companies they work for is that how and when coverage responds overseas often doesn’t track how coverage responds stateside, said Mary Quillen, manager, international workers’ compensation, AkesoCare.
Multinationals tend to carry many overlapping lines of insurance for their overseas business travelers, which is a help.
“You may have six or seven lines of insurance responding to a single claim,” said Logan Payne, assistant vice president, international practice, Lockton.
The primary policies are Foreign Voluntary Worker’s Compensation, Business Travelers Accident, and Kidnap, Ransom and Extortion, Payne said. Purchased effectively the coverages can be powerful. Purchased without the proper consideration, they may suffer from gaps as well as redundancies. Such gaps can cost employees dearly at a desperate time of their lives, Payne said.
To prevent that, he recommends centralizing insurance purchasing for expats instead of delegating it piecemeal to departments or regional offices. “Get all the insurance buyers in the same room to reach one comprehensive answer,” he said.
“Who does the traveler call if he loses his prescription drugs or needs medical evacuation? Who does he call if he hears gunshots outside his hotel?” — Chris Chao, senior vice president, Aon
International benefits from domestic health care insurance can range from nonexistent to “pretty good,” said Arno Chrispeels, owner, Health Insurance International. “A plan might cover emergency medical treatment but not evacuation or repatriation,” he said.
Since these are hefty expenses — $20,000 to $100,000 for a helicopter evacuation and $15,000 to $25,000 for repatriation — companies should review their domestic policies and fill in gaps by using international insurance for short- and long-term travelers.
Chris Chao, a senior vice president at Aon, said it is generally the travel assistance provider that keeps expats safe.
“Who does the traveler call if he loses his prescription drugs or needs medical evacuation? Who does he call if he hears gunshots outside his hotel?” Chao asked.
Duties of Care and Loyalty
When companies send workers out of the country, they have a “duty of care” to keep employees safe and healthy, while the expat workers have a “duty of loyalty” to follow their employers’ safety practices. Sometimes this requires workarounds and major effort. For example, said Denise Buckland, senior vice president, operations, International Medical Group, if a worker is diagnosed with an autoimmune disease, doctors will try staged medications.
“You try one, and if it doesn’t work, you try another,” she said. But the options can be very limited.
Let’s say a U.S. employee working in Thailand requires the injectable Humira to manage her condition, and no other drug gives her the relief she needs. Humira is illegal in Thailand, however. The carrier could contact the Thai and U.S. governments to help the employee get an importer’s license, but in the meantime, Buckland said, “the worker may get so sick that she has to go home.”
Especially in regions where the medical infrastructure is underdeveloped by Western standards, an acute but treatable event, such as a compound bone fracture, could quickly escalate into a life-threatening medical issue, said Alison Swanz, senior consultant, Arthur J. Gallagher & Co.
Duty of care is still an “unregulated philosophy,” said Hart Brown, senior vice president, practice leader, organizational resilience, HUB International. It depends on a number of interrelated steps, beginning with a vetted travel assistance provider and adequate insurance.
An employer “hasn’t met its duty of care” if its travel assistance provider does not have the right protocols or its expats don’t know the provider’s toll-free number, he said.
“Compliance is hard to enforce. You can’t sit on an adult to make him take his meds.” — Alison Swanz, senior consultant, Arthur J. Gallagher & Co.
Coverage gaps and potential risks should be exposed in a thorough pre-trip screening, said Rob Howard, director of corporate sales, GeoBlue, a major provider of international insurance for expatriates.
When employees need medical help while on assignment, carriers will tap their provider networks to find care equivalent to what they would get at home, said Howard.
Pre-assignment evaluations should extend beyond known health issues, said Nick Dobelbower, vice president, global benefits practice, Lockton, to include language training if necessary, and alert the traveler to cultural differences and sensitivities.
The onus is on the employee to make a responsible decision whether to go on an overseas assignment. Sometimes, employees should decline assignments, Swanz said. A worker with asthma probably shouldn’t accept an offer in Beijing, where air pollution is a health hazard.
“An executive expat assignment is a huge investment for the company,” Howard said, and may include high compensation, language training, housing, security, a driver and private schools.
To recoup that investment, companies expect an executive assignment to last three to five years, but more than 50 percent end in failure after six to nine months. Among the top reasons for failure are the expat’s benefits package and health care, according to Cigna’s “2015 Global Mobility Survey.”
Duty of care and duty of loyalty should align during pre-trip planning, said Howard. He recommends a sit-down orientation with travelers as a group before they leave to review the size and scope of risks.
Other issues such as domestic employees can arise, Chrispeels said. “Employees may think they have international coverage for the entire household [such as nannies], but they don’t.”
The organization should also consider issues such as family mental health problems. A one-on-one meeting or a follow-up phone call may bring issues to light when travelers have medical issues they don’t want to share with a group.
One aspect of an employee’s duty of loyalty applies to medical compliance, especially to taking prescribed medications for common diseases such as heart conditions or asthma.
“Compliance is hard to enforce. You can’t sit on an adult to make him take his meds,” Swanz said.
U.S. companies that send U.S. citizens overseas are subject to the Affordable Care Act, but the law is so complex — despite Congress’ attempt at guidance in the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) — that “people get glassy-eyed looking at it,” said Mark Holloway, senior vice president, co-director, compliance services, Lockton.
Holloway recommends that companies write their expat coverage on U.S. paper as a practical way to satisfy the individual mandate — but to work with professionals who deal in expatriate insurance every day.
“Companies will want to work with a broker or counsel who plays in the sandbox because it’s such an arcane area of the law.”
Brexit Could Challenge Insurance Industry
As the United Kingdom moves closer to a vote on whether to leave the European Union, insurance industry experts are contemplating what an exit could mean.
While most experts believe the industry will continue to operate throughout Europe, the question is at what cost — and whether companies will need to open new branches and subsidiaries to underwrite polices in EU member states.
Many international insurance companies and brokers conduct business throughout the European Union from subsidiaries in London.
“No one wants extra bureaucracy, and nobody wants red tape but fundamentally it’s something as an industry we’re probably used to dealing with.” — Chris Johnson, executive vice president, FM Global
Chris Johnson, executive vice president at FM Global, said if UK voters approve the referendum to leave the EU on June 23, the potential for “red tape” could be “painful,” but the insurance industry will be able to work through it.
One challenge is that many insurance companies serve the EU through one or two offices, instead of now-closed branches in individual European countries. Brexit could essentially eliminate those efficiencies.
“No one wants extra bureaucracy, and nobody wants red tape but fundamentally it’s something as an industry we’re probably used to dealing with,” Johnson said.
In addition, he said, many insurers that don’t have a large footprint throughout Europe are currently domiciled in London and make use of the ability to trade across borders under the EU’s Freedom of Services Act (FSA).
This “passporting” allows insurers to access markets throughout the continent, reducing capital expenditures by serving multiple countries from their base in London.
“It’s so attractive because you have one set of regulators and one set of capital,” Johnson said. “Now, if you incorporate new insurance companies as a result of Brexit, this becomes [additional] capital and government requirements. You have to set up [new] companies to transact business.”
The cost and complexity of maintaining additional domiciled entities will add to costs and for companies lacking the resources, it may be a barrier to entry when providing coverages across multiple countries, he said
Moody’s Analytics reported it does not expect changes in insurance passporting rights to have profound implications for the industry overall as many of the largest groups conduct business through local subsidiaries rather than on a cross-border basis.
Helena Kingsley-Tomkins, Moody’s assistant vice president, said a bigger concern is that a vote to leave the EU could lead to volatility in the financial market, impacting the Solvency II capital ratios of insurers.
“Market volatility as a result of Brexit would impact all insurers to a certain extent, whether they are headquartered in the UK, EU or elsewhere,” said Kingsley-Tomkins.
She also said that economic uncertainty caused by Brexit could reduce the demand for some commercial insurance products.
“The single market is vital to London’s ability to service its global clients. It is therefore understandable that the British Insurance Brokers’ Association has put Brexit at the top of their agenda this year.” — Sean McGovern, chief risk officer, Lloyd’s of London
Sean McGovern, Lloyd’s chief risk officer, said at a speech to the Insurance Institute of London in February 2016, that exiting the EU will create a “level of uncertainty for the [insurance market] we have rarely experienced.”
The biggest risk, he said, would be the disruption of the European single market which constitutes the world’s largest insurance market with more than 500 million people, a global share of 33 percent and premiums of nearly 1.4 trillion Euros.
McGovern said Lloyd’s is working on contingency plans to deal with a range of possible scenarios to ensure it can continue to provide the market with access to the EU.
He said they are “confident” they will find a way through the uncertainty and continue to write business in local markets under the Lloyd’s structure.
“The single market is vital to London’s ability to service its global clients. It is therefore understandable that the British Insurance Brokers’ Association has put Brexit at the top of their agenda this year,” said McGovern.
Johnson said the impact of Brexit could ultimately come down to the size of the insurer, the products they sell, and the scope of their operations.
While larger companies and brokers would be “structurally less impacted,” they might find themselves dealing with a “different landscape” in how the insurance itself is transacted.
“Companies [selling] things like travel insurance, medical insurance [and other products] could find this could be very disruptive to some of their businesses in settling claims and moving money around,” he said. “For some markets it could be a mess.”
Compounding: Is it Coming of Age?
The WC managed care market has generally viewed the treatment method of Rx compounding through the lens of its negative impact to cost for treating chronic pain without examining fully the opportunity to utilize “best practice” prescription compounds to help combat the opioid epidemic this nation faces. IPS stands on the front lines of this opioid battle every day making a difference for its clients.
After a shaky start cost-wise, prescription drug compounding is turning the corner in managing chronic pain without the risk of opioid addiction. A push from forward-thinking states and workers’ compensation PBMs who have the networks and resources to manage it is helping, too.
Prescription drug compounding has been around for more than a decade, but after a rocky start (primarily in terms of cost), compounding is finally coming into its own as an effective chronic pain management strategy – and a worthy alternative for costly and dangerous opioids – in workers’ compensation.
According to Greg Todd, CEO and founder of Integrated Prescription Solutions Inc. (IPS), a Costa Mesa, Calif.-based pharmacy benefit manager (PBM) for the workers’ compensation and disability market, one reason compounding is beginning to hit its stride is because some states have enacted laws to manage it more effectively. Another is PBMs like IPS have stepped up and are now managing compound drugs in a much more proactive manner from an oversight perspective.
By definition, compounding is a practice through which a licensed pharmacist or physician (or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist) combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.
During that decade, Todd explains, opioids have filled the chronic pain management needs gap, bringing with them an enormous amount of problems as the ensuing addiction epidemic sweeping the nation resulted in the proliferation and over-consumption of opioids – at a staggering cost to both the bottom line and society at large.
As an alternative, compounded topical cream formulations also offer strong chronic pain management but have limited side effects and require much reduced dosage amounts to achieve effective tissue level penetration. In fact, they have a very low systemic absorption rate.
Bottom line, compounding provides prescribers with an excellent alternative treatment modality for chronic pain patients, both early and late stage, Todd says.
Time for Compounding Consideration
That scenario sets up the perfect argument for compounding, because for one thing, doctors are seeking a new solution, with all the pressure and scrutiny they’re receiving when trying to solve people’s chronic pain problems using opioids.
Todd explains the best news about neuropathic pain treatment using compounded topical analgesic creams is the results are outstanding, both in terms of patient satisfaction in VAS pain reduction but also in reduction potentially dangerous side effects of opioids.
The main issue with some of the early topical creams created via compounding was their high costs. In the early years, compounding, which does not require FDA approval, had little oversight or controls in place. But in the past few years, the workers compensation industry began to take notice of the solid science. At the same time, medical providers also were seeing the same science and began writing more prescriptions for compounding – which also offers them a revenue stream.
This is where oversight and rigor on the part of a PBM can make a difference, Todd says.
“You don’t let that compounded drug get dispensed when you’re going to pay for it without having a chance to approve it,” Todd says.
Education is Critical
At the same time, there is the growing, and genuine, need to start educating the doctors, helping them understand how they can really deliver quality pain management to a patient without gouging the system. A good compounding specialty pharmacy network offering tight, strict rules is fundamental, Todd says. And that means one that really reaches out to work with the doctors that are writing the prescriptions. The idea is to ensure that the active ingredients being chosen aren’t the most expensive sub-components because that unnecessarily will drive the cost of overall compound “through the ceiling.”
IPS has been able to mitigate costs in the last couple years just by having good common sense approach and a lot of physician outreach. Working with DermaTran Health Solutions and its national network of compounding pharmacies, IPS has been successfully impacting the cost while not reducing the effectiveness of a compounded prescription.
In Colorado, which has cracked down on compounding profiteering, Legislative change demanded no compound could be more than $350.00 period. What is notable, in an 18-month window for one client in Colorado, IPS had 38 compound prescriptions come through the door and each had between 4 and 7 active ingredients. Through its physician education efforts, IPS brought all 38 prescriptions down 3 active ingredients or less. IPS also helped patients achieve therapeutic success (and with medical community acceptance). In that case, the cost of compound prescriptions was down to an average of $350, versus the industry average of $788. Nationwide IPS has reduced the average cost of a compound prescription to $478.00.
Todd says. “We’ve still got a way to go, but we’ve made amazing progress in just the past couple of years on the cost and effective use of compound prescriptions.”
For more information on how you can better manage your costs for compound prescriptions, please call IPS at 866-846-9279.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with IPS. The editorial staff of Risk & Insurance had no role in its preparation.