Expand your workforce internationally, and your company will benefit from access to the best talent in the world as well as global perspectives that can help grow your business.
However, ensuring your international employees enjoy a benefits package that includes essentials like medical coverage poses a unique challenge. Why? Laws governing health insurance vary significantly from country to country.
Choose your health benefits with compliance and employee fairness in mind, and you'll save yourself headaches down the road.
Key takeaways:
- Offering health benefits to your global workforce is a meaningful way to support your employees, but the international health insurance landscape is complex.
- The size of your company and where you operate will impact your choice between local and global plans or alternatives such as stipends or reimbursement arrangements.
- An Employer of Record can simplify the process of selecting and managing the best possible benefits package for your international employees.
The Importance of Health Benefits for International Workers
Providing comprehensive health coverage shows employees that you value their wellness and peace of mind. This investment can, in turn, boost job satisfaction and productivity, helping you attract and retain top talent.
But even if you haven't prioritized healthcare coverage in the past, offering a package that supports the well-being of your international employees may be a legal necessity.
Comply With Local Health Insurance Regulations
Medical insurance regulations vary across borders, making it challenging to manage benefits for a global workforce. Understanding local laws is key to staying compliant and avoiding fines or legal issues.
Some countries may incentivize employers to provide employees with group health insurance. In others, payroll taxes support participation in national healthcare systems or public health funds.
Here are a few examples of how healthcare can look in different countries:
- Germany: Employers are legally required to contribute to the health insurance system, Gesetzliche Krankenversicherung (GKV), which provides comprehensive coverage to employees. Employers and employees pay a percentage of the employee's gross salary to GKV.
- Canada: While Canada has a publicly funded healthcare system, employers often supplement this with private health insurance for dental and vision care benefits.
- United Kingdom (U.K.): The National Health Service (NHS) provides universal health care, funded by taxes. Employers are not mandated to provide health insurance but can opt to offer private benefits to attract and retain talent.
- Australia: Australia has a public healthcare system funded by taxes. As in the U.K., many employers offer private health insurance as a benefit.
Consulting with local experts is the best way to navigate legal standards in each country where you hire employees in order to ensure compliance.
Offer Competitive and Equitable Coverage
Country-specific laws may dictate minimum health insurance coverage. Still, it's good to go beyond the bare minimum requirements to ensure your company offers all international employees a competitive and equitable benefits package.
Why? Well, some employees may feel less valued if benefits differ widely from country to country. So, aim for consistency in coverage quality, ensuring access to essential healthcare, dental, vision, and mental health services, and, in some cases, private hospital care.
Beyond legal requirements, it's also helpful to consider cultural norms. For example, in some countries employees may expect ancillary wellness benefits such as stipends for gym memberships, exercise classes, or wellness apps.
Choose Between Local or Global Health Insurance Plans
Whether to offer local coverage for international talent or provide benefits to all employees through a global plan will likely depend on the size and distribution of your workforce.
Offering local health insurance coverage ensures compliance with country-specific regulations where your employees live. This likely involves working with local insurance companies, making it easier for you to comply with labor laws and for your employees to access local healthcare providers.
However, providing local insurance in multiple countries means managing multiple policies and relationships. This increases administrative complexity. It can also result in inconsistent coverage for employees.
Global plans can provide consistent coverage regardless of location. These benefits can support streamlined access to medical care for remote or internationally mobile employees. But, if you have a smaller company, the costs may be prohibitive.
Stipends and HRAs as Health Insurance Alternatives
An alternative to offering group health insurance is offsetting employees' healthcare costs through individual stipends. This can enable employees to choose their coverage based on personal needs and local laws.
However, this benefit may be treated as taxable income depending on where employees live. Employees could owe additional income taxes, and you may need to increase your payroll withholdings.
Health Reimbursement Arrangements (HRAs) are another option. With an HRA, employers contribute a set amount of money to the HRA each year, which employees can use to pay for eligible healthcare expenses.
However, countries with strong nationalized healthcare systems, like those commonly found in Europe, make HRAs redundant. As with individual stipends, HRAs are likely taxable benefits and may increase an employee's financial burden.
Whether you opt for local or global health insurance, you must follow local regulations in every country you operate in. Ignoring this step opens you up to substantial legal and financial risks.
Understand the Basics of Digital Nomad Health Insurance
If you employ remote workers who live and work in a country through its digital nomad visa program, health insurance is likely a requirement to obtain their visa.
Like travel insurance someone may buy when taking an international trip, digital nomad health insurance for expats typically covers emergency medical treatment, medical evacuation and repatriation, and travel disruptions.
Popular providers catering to digital nomads include:
- SafetyWing (known as a budget option)
- World Nomads (including coverage for adventure sports)
- PassportCard (helps cover medical expenses via a prepaid card)
Consider an Employer of Record
An Employer of Record (EOR) is another option for providing healthcare coverage to your international employees. EORs simplify the process of managing employee benefits by handling compliance and administration on behalf of your company.
As the legal employer in each worker's home country, EORs ensure that health insurance coverage aligns with local labor laws and regulations. This also eliminates the need for your team to deal with the complexity of navigating each country's requirements.
Additionally, EORs often have established partnerships with local and global insurance providers. These partnerships make it easier to offer competitive and compliant health benefits.
Offer Health Insurance for Your International Employees With RemoFirst
RemoFirst empowers you to employ international employees in over 185 countries, and our personalized health plans help ensure your global employees have access to high-quality healthcare — regardless of location.
We also take care of managing:
- Local labor law compliance
- Global payroll
- Paid time off requests
- Onboarding and offboarding
- Creating contracts, like nondisclosure agreements
Schedule a demo today to learn how we can help you offer comprehensive benefits to your global workforce.
