Medical Insurance for Education Abroad: Preparing for a Potential Crisis

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Introduction

The numbers of U.S. students studying abroad has increased by over 150% in 10 years. This means that the likelihood of students needing medical care or experiencing a crisis while abroad has also increased. One key tool in managing these situations and increasing a positive outcome for our students is their travel medical insurance. Though most education aboard professionals will shudder at the thought of an in-depth consideration of insurance, a little pain now will certainly pay for both your students and your organization. Do you know how travel medical insurance is handled for your education abroad students? Do you know how your practice compares to your peer institutions?

According to Responsible Study Abroad: Good Practices for Health and Safety (2002), organizations are clearly told, “Require that participants be insured. Either provide health and travel accident (emergency evacuation, repatriation) insurance to participants or provide information about how to obtain such coverage.”

Published more recently, The Standards of Good Practice for Education Abroad (2008), includes no statement of insurance practices but does ask the following question for programs that wish to test themselves against the Standards of Good Practice: “Does the organization require or inform students about the need for health and repatriation insurance?”

Beyond knowing we should provide or tell students to get travel health, evacuation, and repatriation insurance, organizations and professionals are left to determine the rest on their own. Is it better to provide insurance or advise students to obtain their own coverage? Should organizations require (or offer) certain levels of coverage? Is it enough to simply inform students that they need some level of coverage and leave the decision on how much to the students and their families? There is not one gold standard for education abroad insurance and thus, not one goal for organizations to work toward. That being said, most organizations have insurance practices that fall into two general categories.

Category One:  “Leave it to the Student”

This model allows organizations to provide information to students and their families who are then responsible for making individual choices on what insurance is a good fit for the traveler. A policy statement for an organization following this model would look similar to: “Students must have adequate insurance to cover them while abroad.”

Some organizations will take it one step further and require both health and evacuation/repatriation coverage or may provide a handout with guiding questions to consider things such as pre-existing health concerns, the need for mental as well as physical health coverage and common policy exclusions. Yet others will recommend a certain level of coverage in key areas such as recommending major medical limits of at least $250,000 or pre-existing condition coverage of at least $50,000.

The advantage of this model is that it allows the family and traveler to make choices based on the specific needs of the traveler. If, for example, a student has a known pre-existing condition they can choose a policy with no pre-existing condition exclusion even if the policy is slightly more expensive where another student might be well served by choosing a policy with very little coverage for pre-existing conditions. Additionally, as many universities require health insurance coverage for all students on their home campuses, this model could save students money for those students who have international coverage as part of their U.S. insurance. Also, from an administrative standpoint, this model saves the organization the time and resources that would be required to maintain an organizational education abroad insurance policy. Finally, as the onus is on the student to make the choices, theoretically the organization’s responsibilities and risks related to insurance are reduced.

The disadvantage of this model is that the education abroad organization won’t truly know if the students have “adequate” coverage. There will be some students and families who will take this task very seriously and may even consult with an insurance professional, but there will be others who will simply check the insurance box (“I’ve got insurance”) and move on to more exciting parts of their planning (reviewing guidebooks and planning their weekend trips).

The disadvantage of this model is that the education abroad organization won’t truly know if the students have “adequate” coverage. There will be some students and families who will take this task very seriously and may even consult with an insurance professional, but there will be others who will simply check the insurance box (“I’ve got insurance”) and move on to more exciting parts of their planning (reviewing guidebooks and planning their weekend trips). The organization also won’t know which of literally hundreds of policies cover the students or the specifics of how to access the coverage for each individual student. For students that need to purchase coverage outside of their U.S. coverage (which will likely be a large percentage of the population), they will not benefit from premium discounts available to groups plans and thus will need to pay $50 or more dollars a month for a comprehensive plan.

Leave it to the Student, But Require They Meet Minimums

One way that some organizations have mitigated some of the disadvantages of this model is to require that students certify a certain level of personal coverage. One way to do this is to provide detailed guidance on obtaining coverage and collect a signed form indicating that students have met organizational required minimums. Of course, this has its own disadvantages as it arguably brings a higher level of responsibility back to the education abroad organization. Thus, it is important that staff make the decisions for coverage minimums with the support of the experts within their organization including legal counsel. This, along with developing documents and tracking completion for each student will add to staff workloads.

A second option would be to require that students prove certain coverage minimums by requiring a copy of each student’s policy. But this assumes that someone at your organization has the training and the time to review insurance policies.

A second option would be to require that students prove certain coverage minimums by requiring a copy of each student’s policy. But this assumes that someone at your organization has the training and the time to review insurance policies. While some organizations rely on education abroad professionals to review insurance policies, this is a risky venture that would make most legal and insurance professionals cringe. A better process would require internal risk management or external insurance professionals to take on this role.

Category Two: Organization Mandated Coverage

This model is one where the organization makes the choice to require all participants to have a specific education abroad insurance coverage. Most commonly this is a travel medical insurance policy with medical evacuation and, in some cases, also includes security evacuation coverage. Sometimes it is an “off-the-shelf” policy that the organization reviews and decides meets their needs. Most often however, the organization negotiates a group policy to address the needs of their specific population while taking advantage of the opportunity to negotiate to receive better coverage at a lower cost than what is available to individual travelers.

Having one required policy allows the organization to assure a certain “adequate” level of insurance for all participants.

Having one required policy allows the organization to assure a certain “adequate” level of insurance for all participants. Also, the organization can be sure that they know the single insurance policy and provider, thus making it easy to revoke the coverage when needed. This model usually requires some type of enrollment of travelers for specific dates and locations. An interesting added benefit, especially for decentralized universities, is that a mandated insurance policy can help identify travelers who otherwise might not report their travel in an official way.

One disadvantage of this model is that it puts a great deal of responsibility on the organization to meet the needs of their students and arguably opens the organization to risks. Thus, the organization must take this responsibility seriously and take steps to make good decisions up front. As Friend (2009) points out in What’s in YOUR policy?, there are many details to consider. For example:

• What are reasonable limits for major medical?
• What exclusions can the organization and its travelers tolerate?
• What is a reasonable co-pay or deductible?
• What will it cost to evacuate a student or return their mortal remains to their family?

Organizations who use this model should rely on insurance and legal experts to assist in making decisions. Therefore, a second considerable disadvantage of this model is that it is time and resource intensive. Not only does it take time to decide on what policy and with what limits to use, this model will require staff time to enroll participants and likely answer more questions than when students are on their own to obtain coverage.

Requiring a specific policy could result in duplicate coverage for some students who already have international coverage as part of their U.S. health insurance, which can also be a disadvantage. In some cases, both the student’s home university and the organization directly responsible for the student’s program will require coverage, resulting in further duplication.

Will your organization consider waiving your mandated coverage for another policy? If yes, what are the processes and coverage requirements that will result in a waiver? Will you waive for a student’s U.S policy or only for a partner policy? There are important implications for staff time, student budgets, and organizational responsibility to be considered.

The Blanket Coverage Option

An interesting option within the organization mandated model is to remove the enrollment requirement, thus making the insurance coverage automatic for all travelers for the organization. An advantage of this automatic “blanket coverage” is that it removes the staffing requirement of enrolling travelers but conversely limits the tracking opportunities that come along with traveler enrollment. The implication on premiums is also a consideration in this model, which would require a blanket premium to cover all travelers rather than individual premiums that are based on specific travel dates.

Commonly, student premiums for organization mandated coverage are passed onto students directly or indirectly as part of a comprehensive education abroad fee. With no enrollment, the organization would need to cover the annual premium, consequently taking on some level of financial risk even if some of the costs could be recouped from education abroad fees.

Blanket coverage could include the comprehensive medical coverage and medical/security evacuation or could be for only one part of the coverage package. For example, an organization could have only blanket coverage for the medical evacuation, return of mortal remains and security evacuation portions of the insurance package and leave medical insurance choice to individual students.

What is the Best Practice?

As the vast options presented here are overwhelming, they are not inclusive of all the ways that medical insurance is handled for education abroad students. With industry standards that allow such a range of model and practices, it makes it difficult for decision makers at universities and education abroad programs to know what the best practices are. Thus, it is important that education abroad professionals continue to have these discussions in consultation with their legal and insurance counterparts.

Questions to consider include:

• What are the legal risks and considerations of your organization’s current practices?
• How do your current practices compare to your peer organizations both in the traditional sense and among peers with similar insurance models?
• What are the state and federal insurance regulations that impact your organization?
• What practice/policy does the best job of protecting your students?

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Stacey Tsantir is the International Health, Safety, and Compliance Coordinator, Office of International Programs, University of Minnesota