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How to Provide Health Care for a Distributed Remote Team

When you decide to expand into new international markets or hire remotely from another country, there are naturally some logistical barriers to overcome. 

Of course, you’ll need to choose how you’ll administer your payroll, tax and pension payments, and read up on local employment laws to ensure you’re doing everything compliantly. You’ll then want to decide whether you’ll use a local or global compensation model (or some form of hybrid). 

But once you’re across the basics, you’ll likely start thinking about benefits including health insurance, equipment and any additional company offers. 

To help you along, we’ve compiled some of the main ways remote companies provide health care for their distributed teams. 

Add International Insurance

When you’re looking to provide health insurance for your employees, it makes sense that the first port of call should be some kind of global insurance solution. 

Instead of jumping into a whole new plan, it’s worth checking to see if your current insurance provider has an international package as that may be a simple addition to your existing policy. For example, Allianz has a five-tier global insurance offering which can cater to small businesses through to large international corporations. As well as short-term offerings which could be used for employees who’ve been sent abroad on assignment or are moving for a short period. 

Unfortunately, robust international offerings that provide a local perspective are hard to come by so you’ll likely have to switch companies or manage a few at once. 

AIG has been providing multinational insurance solutions for a while now. They have a program design tool that will guide you through local regulations, tax exposures, and coverage issues which could help design something compliant and in line with your company standards. 

The main drawback of using an international package is difficulty determining whether it’s a standard local offering. Without on-the-ground advice, it can be tricky creating a plan that is legally compliant while also offering what a local employee will expect as standard. 

Offer Remote Health Insurance 

If your insurance company doesn’t offer a package you’re interested in, but you still like the idea of providing company-wide coverage, you may be interested in remote health insurance companies such as SafetyWing. The insurance start-up was created to cater to the specific needs of globally distributed companies. 

“We wanted to make a policy that was the same across many jurisdictions and had a global binder,” says co-founder and CEO Sondre Rasch

“We’ve tried to, within reason, flatten prices and make the user experience as similar as possible so that when you are in different countries, your protection is the same and at a similar price.”

This means, aside from employees in the US, Singapore and Hong Kong (which will require an additional cost) all employees will have the same monthly fees, no matter where they live. The cost is also scalable, meaning a lower price and extra benefits as your number of members grows.

“You do get the volume benefit of being a bigger company even though you have people in many different jurisdictions,” Sondre says. 

They also have a software background, so they prioritised providing an online, user-friendly approach. Companies have their own dashboards where they have an overview of their plan, add or remove employees and receive support.

“[Our customers] work online, they work on their computers, and that’s how they want to interact with their products, and they want it to be easy to use and easy to buy,” he says. 

The health plan offers fairly complete coverage, with optional add-ons including dental and maternity. Employees are also covered for emergency treatments outside their home country for trips up to 30 days. 

Sondre says their most significant benefit is the ease of operations, “You don’t have to figure this out country by country — you have this one entity that you can deal with for all of that.”

The company also offers plans for individuals and one focussed on digital nomads who are travelling and working at the same time. 

Provide a Stipend

To get around the difficulty of finding insurance companies in various countries, some companies (including ShieldGeo!) provide a monthly stipend for health-related expenses. This option allows companies to provide ongoing support that can be fixed in one currency, meaning an equal offering company-wide. 

The agreed stipend amount can be administered with monthly pay, where it will be subjected to tax, or alternatively paid in response to expense submissions by the remote employee. 

At Shield, we found the stipend approach to be flexible enough to provide for the health expenses our employees actually want to cover. Private cover is important to some, but not others, and by offering a monthly stipend, our employees can choose where they spend their allowance (within reason, of course). 

One downside to this approach is accounting for the cost of living in the various countries your employees may live in. The allocated amount may not cover basic requirements in some countries while being excessive in others. Of course, you could fix the amount in each local country’s currency or provide an extra loading for those who live in more expensive countries to counter this. Or offer to provide basic coverage to all employees (which would mean private coverage in some countries, while relying on public health care in others), and then offer a fixed stipend on top of this. 

Use a Local Partner

Partnering with a local company to outsource your in-country administration and payroll can be a good way to gain local insight. If you’re already using this option to administer payroll for your international employees, it should be reasonably easy to add on benefits such as health insurance onto your service. 

The major benefit of dealing with someone locally is they’ll have first-hand knowledge of local employment laws as well as what a typical insurance offering looks like. For example, in countries with reliable public health systems, private health insurance may be extremely rare. Conversely, other countries may deem it a necessity. 

While outsourcing makes this process more comfortable in some respects, it may make it harder to offer an individualised approach. Local partners will likely have their own partnerships and offerings, which could mean restrictions on what they are willing to provide for your employees. 

Also, if you have employees in multiple international locations, you’ll need to source local partners for each country which could prove both difficult and time consuming to manage. 

Use an Employer of Record

Using an employer of record gives you all the benefits of using a local partner with the added benefit of having someone guide you through the process. 

“You need to be able to ask the right questions before making a decision,” says Jennifer Henne, Global Mobility Subject Matter Expert at Shield, which is really difficult when dealing with a country you have no experience with. 

“How you handle benefits in your own country naturally influences how you think they should be handled in the host country, it’s subliminal,” she says. 

For example, “In the US their coverage would be retroactive from the first date of employment. Elsewhere it could be from the date you passed the medical, could be from the first invoice or some other date.”

This isn’t necessarily something companies think to ask about and might only find out after something goes wrong. 

Find the Right Fit for Your Team 

As always, every option has a range of benefits and challenges. It’s essential to assess your company’s individual needs critically. Does your current insurance policy offer multinational solutions? Will you be hiring in one international location or many? Do you have a working knowledge of the employment law in the countries you’ll be engaging in? The answers to these questions will determine what option might be the best fit for you and your new employees. 

– Bree Caggiati

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