Insurance is all about the transference of risk. At this time of heightened risk and abundance of misinformation circulating online, we have put together this simple guide to some of the ways that insurance can be used to help minimize the negative impact of the ongoing novel coronavirus outbreak on your school. With more and more schools closing around the world it is our hope that this timely advice will help your faculty stay healthy and positive at this time of uncertainty, and will help ensure that we may all come out of the current epidemic stronger.
COVID-19 and Health Insurance Plans
There is a multitude of information available online about the health risks associated with the novel coronavirus, or COVID-19, so here we are focusing on the things to look out for within your current group health insurance plan to ensure that your faculty are fully protected at this time. Most, if not all, comprehensive international health insurance plans (as opposed to travel insurance plans) will cover the medical costs related to the treatment of anyone with a suspected or confirmed case of COVID-19. We are seeing a number of situations too where international health insurance providers are temporarily increasing the cover limits, or removing/waiving deductibles and co-pays, to ensure their members are fully covered at this time. Provided that your employees have a comprehensive health insurance plan with a reputable international provider, they shouldn’t need to worry that COVID-19 might be excluded from cover. We would define a comprehensive global health insurance plans as an annual renewable insurance plan designed for “expats” or people that are living or working overseas for a prolonged period of time. Such plans cover treatment for both emergency and routine medical treatment, with in-patient and out-patient cover. This is compared with travel insurance plans that are designed for short-term trips abroad – more on those below.
We are seeing a lot of misinformation online about how people’s international health insurance has been invalidated by the travel restrictions that have been put in place by a few foreign governments, including the UK FCO and US state department, advising against non-essential travel to certain countries – initially just China, but at the time of writing extended by many countries to include South Korea, Iran and Italy.
We reached out to a number of insurers and asked them the following question:
Does going against the advice of countries that are recommending their citizens to leave invalidate a member’s insurance cover? One World Cover assumes that there is no change to the standard terms and conditions – people are covered under their normal area of cover? If a member chooses to stay in a country against the advice of their government, they are covered as normal under their normal area of cover. Or if they choose to return to a country classified as high risk while the government is advising against travel here, they are also covered as normal. Please can you confirm this in reply.
The response we received from all insurers was that their member’s cover remains intact with no reduction in cover at this time. In fact, many insurers are extending the limits on emergency out of area cover, by covering people for emergency treatment for longer periods of time in the United States, for example, than they would be under normal circumstances. Because the policyholders of international health insurance plans are typically what we might call globally mobile workers, it makes sense that such plans would continue to cover their members at this time. Such plans are specifically designed to cover such situations. If you are concerned that your employees might not be fully covered, we recommend seeking clarification from your broker or insurance provider.
COVID-19 and Travel Insurance Plans
The situation with travel insurance is very different. Travel insurance is different from health insurance in that it is designed to cover the needs of people on short-term business or leisure trips outside their home country. Premiums are much lower than those for health insurance plans, and travel insurance plans often do not cover pre-existing conditions. As the old saying goes: “You get what you pay for”. Because travel insurance plans are lower cost, some people will purchase travel insurance even if they are going to be overseas for an extended period of time or living overseas. And while it’s likely that in many (perhaps even most) situations travel insurance will meet people’s needs, we would suggest that novel coronavirus outbreak is not one of those situations. If a person is living overseas with a travel insurance plan then they the best they can hope for is, well, just that… to hope that the travel insurer will cover their claims.
An online search of the various ways that travel insurance plans are covering the medical costs related to the treatment of anyone with a suspected or confirmed case of COVID-19 brings up a multitude of different responses. The position of insurers varies wildly from country to country, and company to company. As a general rule, if someone travels to a country against the advice of their government, then their travel insurance will become invalid. This is particularly true if someone travels or buys the plan after the government advice has been released. In fact, the timing of events is critical here. Insurers will classify potential risks into “known” and “unknown”. Travel insurance will cover for events that are unknown such as a cancelled trip resulting from bad weather. But because the COVID-19 is now classified as a “known”, most insurers have already updated their position to say that it is not eligible for cover. If you are currently living overseas with a travel insurance plan, we would strongly recommend that you consider purchasing a comprehensive international health insurance plan as soon as possible or move to a country where you are eligible for national health cover.
Will my health insurer cover “teleconsultations”?
At this time many private clinics and hospitals are promoting their online or telephone-based medical consultations (also known as “telemedicine”), which is understandable given that the last place many people want to be right now is at the hospital. Some of these services are free-of-charge but most are not. Generally speaking health insurance companies will not cover telemedicine services, though this is slowly changing and many of the global insurers we work with, particularly those that have specialist international school plans, are starting to include cover for telemedicine services as standard. More and more are also starting to include cover for pharmacy delivery services. If you are unsure if your plan covers you for such services, we recommend seeking clarification from your broker or insurance provider. We would also recommend that you make a point to add this benefit into your plan from your next renewal. So long as there are some clear rules around how such services can be accessed and eligible for cover, it should be possible for this plan change to be made for minimal cost.
COVID-19 and Business Interruption Insurance
Typically purchased as part of a school’s wider commercial property insurance cover, business interruption insurance is intended to protect companies when they have to halt operations. Because this cover is part of the property insurance cover it tends to follow the rules and guidelines of that policy, meaning it covers companies for “physical damage” or “physical loss”, and generally speaking outbreaks or epidemics are not covered. It is most likely that business interruption insurance will not cover ongoing school closures. However, you should also keep in mind that in different countries different rules are in place about whether contamination and other similar incidents that render property unusable might constitute a “physical loss.” Some property insurance policies provide cover for business income losses arising from a situation where a government authority prohibits access to the a policyholder’s place of business (such as a school). Schools should therefore take steps now to carefully reviewing their existing property insurance cover to determine whether adequate coverage is in place.
As a side note, in 2018 a global reinsurer started marketing a new kind of insurance that would cover a company’s losses in the event of an epidemic. This new kind of insurance was not popular. According to a recent article in the New York Times, then came the coronavirus outbreak and now there’s a six-month backlog in quotes; it’s too late to buy coverage for the current outbreak.
Mass Evacuation Insurance
The current situation has put everyone in a heighted state of fear, and we have no doubt that all schools all be actively reviewing their risk management plans. One of the questions we often get asked is if health insurance plans will cover a mass evacuation of faculty from an area. Health insurance plans will cover the emergency evacuation of people that require urgent medical treatment, if that treatment is not available locally. Health insurance plans do not cover the mass evacuation of anyone that is not currently sick or injured, even in dire situations that might necessitate a mass evacuation of all your staff from an area. There are mass evacuations plans available on the market though they are not common. Unfortunately they do not cover epidemics and are really designed for instances of war or terrorism. If you are interested in understanding more about such plans, please speak to your broker or insurance provider.
One World Cover | Health Insurance Specialists One World Cover are international school insurance specialists, with international school clients across Asia. If you are concerned that any aspect of the insurance plans that you current purchase for your school might not be sufficient for your needs at this uncertain time and are interested in us reviewing (free-of-charge, no obligation) your insurance cover to ensure you are fully protected – or can be better protected in the future – please get in touch. We are happy to help. In the meantime, stay healthy.