Insurance Options for Overseas Contractors

Insurance Options for Overseas Contractors

Overseas military contractors enjoy a number of financial benefits. Contractors usually earn two or three times more pay than their counterparts who work for Uncle Sam in places like Haiti. Much or all of this money is tax free. Many other contractors enjoy financial benefits like free or subsidized housing and per diem allowances.

However, things are not all wine and roses for military contractors.

Contractors have no job security. When the government decides to end the contract, the contractor goes home with nothing. There is nothing to do except sit and wait for the next opportunity. Additionally, as most stateside contractors know, overseas private military contractors do not receive free or subsidized insurance. They are on their own in this area, and they have some options.

Medical Evacuation Insurance

With costs of up to $10,000 per mile, air emergency transportation to a good care facility is frightfully expensive. Additionally, arranging for such transportation is very difficult, especially if the contractor is in a remote area. Medical evacuation insurance can take care of most of the cost and all the arrangements.

Most MEI policies include other benefits, as well, such as Accidental Death and Dismemberment insurance and term life insurance. There are some ancillary benefits, as well, such as trip cancellation and lost luggage insurance.

MEI premiums are usually not too high. Some factors include length of the trip, destination, age of the insured parties, amount of deductible, number of covered people (i.e. individual or family plan), and included options.

A number of highly-reputable companies, such as IMG, Allianz, and Travel Guard, offer MEI policies. A number of websites offer side-by-side comparisons, and that is usually the best way to shop for this type of insurance.

Trip Cancellation Insurance

Most contractors do not need TCI. If the trip is cancelled for some reason, like weather or terrorist activity, the employer probably bears the cost. However, visiting friends and family almost always need trip cancellation insurance. This type of insurance is rather expensive (usually between 4 and 10% of the travel costs), but it is a lot cheaper than eating the entire loss yourself.

Many of these policies include optional CFAR (Cancel for Any Reason) coverage. Trip Cancellation Insurance covers those cancellations that are beyond the policyholder’s control. As the name implies CFAR riders or policies cover optional cancellations. Typically, the policyholder must cancel at least 72 hours before departure and the policy only pays between 50 and 75% of the cost. CFAR insurance may have some other benefits as well.

Travel Health Insurance

Most American health insurance companies do not cover any foreign expenses. That is especially true if the person was hurt in an accident, like a car crash.

In some ways, THI and MEI overlap. They may both cover medical evacuations, so it is best to look at the policy coverage guidelines. Travel Health Insurance might also include AD&D insurance. But most importantly, THI basically substitutes for your stateside insurance plan for things like well checkups, laboratory tests, and other everyday health needs.

That coverage makes Travel Health Insurance plans one of the most popular health insurance options for overseas contractors. Specific coverage varies by policy, but generally includes:

  • Medical cost reimbursement,
  • Dental care reimbursement,
  • Evacuation coverage, and
  • Travel services.

Note that THI’s health insurance components are usually reimbursement services, as opposed to upfront payment services. That is pretty much the industry standard for these types of policies.

Most contractors who will be in-country for less than six months purchase single-trip THI. The entire premium is usually due upfront. Other contractors elect multi-trip medical insurance. These policies are usually available in three, six, or 12-month increments. Contractors who will be overseas for more than a couple of years, and that is not very many of them, may look into long-term major medical THI.

The same companies mentioned above also sell THI policies. Once again, a number of online comparison tools are available.

DBA Insurance

If contractors get ill or injured while overseas, and their condition has any relationship with their deployment, Defense Base Act medical and wage replacement benefits may be available. The DBA covers 100% of all medically necessary expenses, from medical evacuation all the way through the end of physical therapy. During this time, the victim is also eligible for wage replacement benefits.

Procedurally, victims must report their illnesses or injuries to their immediate supervisors in writing. It is best to provide notice both electronically and on old-fashioned ink and paper. The notice need not be extensive. Fifty or a hundred words will probably do. Victims must fill out more extensive reports later, and attorneys can assist them.

After a few weeks, both the victim and insurance company appear before a mediator. The mediator reviews the medical records and other paper in the file prior to the meeting. At that meeting, the mediator tries to facilitate a settlement between the two parties. Most claims do settle out of court, but only a few claims settle at this early stage. It is usually a bad idea to settle the claim before medical treatment is at least substantially complete. Victims only get one bite at the apple. If the settlement amount is too low, they can not go back and get more.

Settlement becomes more likely as the administrative hearing date approaches. The insurance company knows that the victim’s attorney can make a powerful case at this hearing. Rather than risk an unfavorable ruling, the insurance company is usually willing to talk.

Contact Barnett, Lerner, Karsen, Frankel & Castro, PA to learn more about Defense Base Act benefits.