What Is “Reasonable and Customary”?
“Reasonable and customary” (R&C) — also known as “usual and customary” or “customary and reasonable” or “usual, reasonable and customary (URC) – is one of the most misunderstood terms in international private medical insurance.
In simple terms, insurers set a benchmark cost for each medical treatment based on what providers typically charge in a particular geographic area (could be a country or region). If a staff member receives treatment that exceeds this benchmark, the insurer may limit the reimbursement to the R&C rate, leaving the employee responsible for the balance.
For example:
A specialist consultation might typically costs US$200. If a high-end private clinic charges US$500 and the insurer’s R&C limit is set/capped at US$300, the insurer may only reimburse up to US$300. The insured member would need to pay the other US$100 out-of-pocket.
Why Do Insurers Use R&C?
Insurers use R&C limits to:
- Control costs, particularly in markets with extreme price variation (such as China, Singapore, Hong Kong or the UAE)
- Prevent overcharging by premium or “luxury” hospitals and clinics
- Encourage members to choose more cost-effective providers
How Employers Can Reduce R&C Surprises
- Educate your employees Provide examples during onboarding and explain that “100% cover” may not mean full reimbursement in all situations.
- Help staff choose wisely Promote insurer-preferred networks or lower-cost providers for common outpatient care.
- Ask your insurer for clarity Some insurers can share their R&C benchmarks for key procedures or create country-specific guides to help members avoid excess costs.
How One World Cover Helps
At One World Cover, we work with international employers and schools to ensure your staff aren’t left with surprise medical bills. We:
- Negotiate insurer terms and benefit wordings to ensure clarity and fairness.
- Provide member-friendly educational materials during onboarding.
- Offer direct support to HR and employees when R&C issues arise.
- Help identify and promote cost-effective provider networks.
“Reasonable and customary” isn’t unreasonable – but it’s rarely well understood. The key is communication. With the right plan design, provider network, and staff education, employers can avoid confusion, boost satisfaction, and reduce unnecessary complaints.
If you’d like help reviewing your current plan’s limits or explaining R&C to your staff, get in touch – we’d be happy to help.
To learn more please get in touch: [email protected] or click here to contact us.
