RISKVUE ARCHIVE | FEATURE STORIES

Overseas Workers And Workers’ Compensation

If your company has employees traveling or working abroad, workers’ compensation and health/medical benefits should be tailored to reflect this fact. Because workers’ compensation has no employee deductibles, co-payments or monetary limits, it can provide superior medical coverage for employees abroad.

There are two approaches to providing workers’ compensation for overseas workers. First, domestic workers’ compensation insurance can usually be modified to provide coverage for overseas workers on temporary assignments by attachment of a Foreign Voluntary Workers’ Compensation (FVWC) endorsement. Alternatively, for organizations that have a complex or significant foreign exposure, separate voluntary foreign workers’ compensation coverage is widely available.

In addition to paying benefits in accordance with the workers’ compensation law in the designated U.S. state of hire, these two approaches (endorsement or separate policy) may provide valuable extra benefits not usually available under a domestic policy. These include:

• Endemic disease. Most FVWC coverage treats endemic diseases as occupational, regardless of how the disease was contracted by the employee.
• 24-hour coverage. Many international insurers recognize that individuals travel or take small vacations when overseas on work assignments.¹
• Repatriation expense. Most FVWC policies will pay for the cost of bringing an ill or injured worker back to the U.S. for treatment, plus funeral expenses and transport to the U.S.
• Third-country repatriation. In some instances, third-party nationals employed away from their homeland also can be provided repatriation expense coverage for expenses to return ill, injured or deceased workers back to their country of origin.
• FVWC endorsements and policies are non-standard, so employers can usually request a variety of coverages. For example, coverage extensions can include illnesses and injuries occurring in “other countries” similar to “other states” coverage under a domestic workers’ compensation policy. This way, side trips to other countries do not require prior notification to the insurer. FVWC coverage may also allow employees the option of choosing the workers’ compensation benefits of another country, if benefits are more generous than those under the issuing state workers’ compensation policy.

There are many ways to provide group medical coverage for foreign employees, depending on whether the FVWC policy provides 24-hour coverage. While it is beyond the scope of this article to examine all possible arrangements, two frequent approaches include (1) purchasing full annual coverage for expatriates and very frequent travelers, and (2) amending the group medical policy to include repatriation and transportation expenses for employees abroad, or purchasing a separate policy for this exposure. An example of the latter approach is a group medical evacuation policy available from MEDEX Assistance Corporation and other providers.

Conclusion

When sending employees abroad, employers should make sure their domestic workers’ compensation policies and FVWC endorsements contain the following:

    Domestic Workers’ Compensation Policy:

• A sufficiently broad definition of “temporary assignment” that will cover employees abroad
• Includes Puerto Rico and all U.S. possessions in the territorial definition
• Includes a worldwide FVWC endorsement for incidental travel

    FVWC Endorsement:

• Coverage for endemic disease
• Coverage for repatriation
• 24-hour coverage for medical benefits
• Coordinates with group medical plan so that there is no overlap of coverage or premiums

It is essential that employers make certain the workers’ compensation exposure is adequately covered. If the exposure consists only of U.S. hires traveling overseas (incidental travel), the foreign voluntary workers’ compensation endorsement may be sufficient. If U.S. hires are working overseas longer than six months, consider obtaining a separate foreign voluntary workers’ compensation policy. Also be sure that any limitations to group health insurance coverage are identified and appropriate steps taken to avoid gaps in coverage. 

Notes
¹ Chubb’s policy, for example, insures employees on a 24-hour basis while overseas on a short-term basis. Once an overseas assignment becomes “long-term,” Chubb’s policy reverts to a typical, employment-based model, covering employees for work-related injuries only. However, the 24-hour coverage continues, protecting long-term employees when they travel to different foreign countries for short-term business trips.

riskVue | The webzine for risk management professionals
March 2000