International Benefits Forum

1. International Benefits Forum The Duty of Care Protecting Business Travelers & Cross Border Assignees Helping employers to help these special employees

2. Agenda • Review of Duty of Care concept • Overview of international assignee types • Setting the stage • Health care issues • Emergency challenges • Safety and security • Recommendations for effective, strategic benefit planning

3. Duty of Care Exercise a reasonable standard of care while performing any acts that could foreseeably harm others. Individuals who are considered to be professionals within society are often held to a higher standard of care.

4. Duty of Care: Australia Everything “reasonably practicable” to be done to protect the health and safety of others at the workplace, duties include: information and instruction on workplace hazards… monitoring the health of their employees and related record keeping; employment of qualified persons to provide health and safety advice.

5. Duty of Care • Consider how this concept translates to the special needs of those traveling or assigned overseas • Broader application over greater number of variables • Employers may not always realize all potential impacts to their globally mobile employees • Your role in helping the employer to understand implications, needs, and in helping to find solutions

6. Globally Mobile Employees – Who are they? • Expatriate (Expat): Any employee residing and working outside of his/her home country. • More than just US Expats • Third Country National (TCN): Employee working for an American company who is from a foreign country (ex: France) working in another country (ex: Brazil). • Inter-regional Assignee: Cross border assignee, within a region, or even a country, who is functioning like an expat. • Key Local National (KLN): Executive, partner or high level manager working in his/her own country outside of the US or Canada. • Inpatriate (Inpat): An employee working in the U.S., who is a citizen of another country; often on rotation or training assignment. • Executive Traveler: Short-term assignments or extended business travel.

7. Setting the Stage • As business goes global, more and more companies are finding the need to station employees overseas. • The cost of keeping an employee and their family overseas can run as high as $1.3 million* for a typical three-year assignment. • The cost of health care is typically about 2% of this total--yet not delivering quality health care to expatriates and their families is a leading cause of “failed assignments.” *National Foreign Trade Council - 2003

8. United Kingdom* United States* China* Singapore Germany Hong Kong* France Japan* Canada Switzerland Australia* Belgium Top 12 “Most Active” Destinations * Also appeared in the Top 12 emerging “new” destinations GMAC – NFTC – SHRM 2003/2004 Global Relocation Study

9. Expatriate Profile • Reside and work outside home country • Needs vary by short and long-term assignments • Portable coverage from country to country often required, as they travel often • Key employees, highly compensated, with special skills • Some on developmental assignments • Success of expats and their assignments is strategically crucial to employer’s success • Average age in mid-40’s, some chronic conditions, predominately male, and 50/50 individual/family.

10. Expatriate Concerns * • Comprehensive total benefits package • Financial security • Opportunity to succeed on assignment • Adequacy of health plan: plan design issues • Impact on career development • Housing and education • Quality of health care * From National Foreign Trade Council, WorldatWork and CIGNA International Expatriate Benefits survey, 2002

11. Communication concerns: Over half of international assignees feel their employers don’t do a good job communicating in three key areas:

12. When clear communication is crucial… • New traveling assignees • Unfamiliar location • Plan for specialized care • Specialty referrals • Care beyond expertise of General Practitioner • “What if” scenarios • Proactively managing special needs • Second opinions • Confirmation / affirmation of proposed treatment • Medical advice • Urgent and emergency care • Speaking live to a coordinator doctor for triage • Payment assistance

13. Expat Health Care – New world of additional risks • Infectious disease • Food and water borne illness • Life-style induced disease • Road safety • Workplace and other accidents

14. Infectious Disease • International assignee encounters an expanded, more exotic array of infectious diseases Malaria Hemorrhagic fever Hantaviruses Dengue fever Avian influenza Tuberculosis Ebola HIV-AIDS C. Difficile • May have no familiarity with how best to safeguard health, avoid exposure

15. Food & Water-borne Illness • Global mobility can significantly increase potential exposure Salmonella and other food poisoning E – coli, Dysentery and “Travelers’ Diarrhea” Parasitic illnesses Hepatitis • Sanitation and hygiene components • Identification of root cause(s) can be challenging

16. Life-style Induced Disease – and the need to effectively manage Consider the health problems an international assignee can take with him on to his assignment… and the potential impact Disease Management comprehensive approach to managing the course and impact of specific high-cost chronic diseases, which includes: - proactive identification of high risk patients - holistic patient management not just the events of treatment - aggressive outreach for the purpose of education and intervention so as to change behavior and manage compliance - likely diseases will include diabetes, asthma and CHF

17. Road Safety • Challenges of driving in new environment • “Keep right” vs. “keep left”, traffic patterns • Signage, directions, language issues • Remote roadways, state of repair, infrastructure • Vulnerability of motorists • Emergency response availability • Unforeseen/unusual hazards

18. Workplace & other accidents • Probably the piece employers are best at handling • More attention given to managing work place risks than other external risks • Visibility is high, even when incidence is low • Need to recognize when other programs are available to help mitigate risk • Defense Base Act, Jones Act • Foreign Voluntary Workers’ Compensation

19. Communication concern:

20. Health Care Access – Getting international assignees to quality care Recognize variable standards within a country In developing countries, best healthcare is usually concentrated in capital or major city Affluence does not always correlate with quality of care: “Hardware” vs “Software” Dynamic and rapid change in some places (India, China, South America)

21. Health Care Differences – Two Examples • India 1991 - No hospitals of international standards 2004 - Medical tourism Explosion of good medical facilities sparked by returning entrepreneurial doctors and growing middle class • Japan Protocol vs. outcome Medical passivity No second opinions Paternalistic style Language

22. Health Care Access • Connecting international assignees to competent, credentialed health care providers • How are providers identified? Vetted? What selection criteria? • How readily can employees access? What’s involved? (self service, referrals) • How adequate is choice? • Is there a medical advocate the employee can speak with? • Are there clear advantages to accessing/using selected providers, provider groups? • Provider qualifications • Paperless (no claim form) transactions • Enhanced benefit levels • Access to local discounts • Managing local vendor relationships • Guarantee of payment

23. Health Care Access • Can staff professionals/experienced vendors be identified and accessed to assist? • Both for international care and US stateside care • For medical referrals, care monitoring, case management • For help with financial arrangements; payment options • For patient/family outreach when needed • Can help be reached every hour of every day? • Other key services • Pregnancy/neonatal support • Employee Assistance Program • Pharmacy services • Second Opinions • Language assistance • Understanding local practices

24. Communication concern:

25. Medical Emergencies Emergency fundamentals • Around the clock, everyday access to help, support • Access to medical professionals when needed • Organizational track record for timeliness, sense of urgency, follow-through • Evacuation benefit • Repatriation benefit • Local familiarity • Access to appropriate resources

26. Medical Emergencies Beyond the fundamentals… Epidemics: • Tracking and monitoring epidemic outbreaks • Plotting and forecasting cases • Communication to Employers • Who is potentially exposed and where • Updates on progress • Communication to international assignees • Coordinated communication and diversified outreach approaches • Timely, accurate information and updates

27. Medical Emergencies Beyond the fundamentals… Pandemic preparedness: • “More than just Tamiflu” • Good advance planning can reduce morbidity and mortality • Planning increases the likelihood that an organization will be able to continue business operations during a global health crisis • Planning should be specific to each Employer’s own situations and conform to company philosophy

28. Medical Emergencies – Pandemic Planning • Employee education and training • Recognition of country specific factors • Strategy regarding anti-viral drugs • Strategy and policy on employee travel • Evacuation – medical necessity, elective? • Quarantine, isolation, social distancing • Workplace policy; employee screening • Business continuity planning – HR, Finance, IT, Sales, etc. • Stress management; assistance and support • Repatriation of mortal remains • COMMUNICATION !

29. Communication concern:

30. Other Safety & Security Concerns • War Risk • Terrorism • Evacuation • Security

31. Safety & Security – War Risk • In current world, war and war risk are not as clearly delineated as in past eras • Often no outright declaration of war • Dictionary definition can be quite different than: • Policy wording • Carrier’s interpretation • Some carriers may not define key terms • War risk wording may also encompass: riot, civil commotion, or police action

32. Safety & Security – War Risk • Thorough review of all policy language required • What are the limitations, exclusions, definitions? • Policy benefit provisions may be confusing, complex • Some countries may be EXCLUDED outright, or • Policy may prescribe specific countries where it WILL be covered • Either way, coverage can be less inclusive, less “portable”, less attractive for highly mobile employees

33. Safety & Security – War Risk • “Can War Risk be added to my policy?” • Ask key questions: • Why do you feel you need it? What are you trying to protect against? • Where are your employees located? • Doing pro-active review and assessment will tell you and client if the coverage is really needed • What will War Risk coverage really give you? Buy time to get your people out? Just be aware, cover is very difficult to buy once circumstances deteriorate or war breaks out

34. Safety & Security – Terrorism • What is it? A premeditated, politically motivated violence perpetrated against a non-combatant by: • Persons not acting on behalf of a sovereign state; or • Clandestine state agents • Terrorism is not just a “remote possibility” anymore • New sense of pervasive vulnerability, beyond “hot” countries • Companies may now even want to buy cover for international employees coming into the US! • Consider if the employer might present an appealing potential target (location, industry, or concentration of risk)

35. Safety & Security – Terrorism • “Are my employees covered in the event of Terrorism? • Not typically excluded now, but you must check all policy and rider language carefully • As carriers become uneasy with potential exposure, limitations and exclusions are being added • New “NCB” limitations becoming more common – excluding any Nuclear, Chemical, or Biological event • Check for an Event Limit in the Schedule of Benefits or elsewhere in policy

36. Safety & Security – Terrorism • Anticipating and responding to unpredictable dangers • Regular monitoring of daily intelligence threat reports • If credible, actionable threat identified: • Proactively assess exposures • Alert service centers and call centers • Effective yet sensitive communication • Coordinate appropriate preparation and establish ongoing monitoring • Kidnap and extortion • Can the employer be linked to a pro-active carrier or vendor who will effectively help monitor, assess, and manage exposures and responses?

37. Safety & Security – Other Disasters • What services are available in the event of critical incidents? • Typhoons, hurricanes, other severe weather events • Natural cataclysms – tsumani, earth-quake, severe flooding • Need consistent “ear to the ground” – identify critical events early on • Proactively assess exposures • Provide ongoing monitoring, status assessments • Proactive outreach to both employers and international assignees • Service and call center alerts; maximize communication • Coordinate appropriate and meaningful responses – help where and how it is needed

38. Implementing Global Benefit Plans - Planning Choosing a carrier/vendor • Global – with 24/7 service capabilities and geographic coverage • Look for online capabilities to provide country overview information • Demand breadth and quality in provider network, critically assess provider selection criteria and process • Look for enhanced service capabilities, crucial ancillary services • Infrastructure and established process to take pro-active role in medical emergencies and other crises • Breadth and depth of experience with international benefits, proven track record, demonstrable expertise

39. Implementing Global Benefit Plans - Planning Also… • Research/Analyze fiduciary obligations, funding • For US Expatriates, start with a US compliant insurer • US State Laws • US Federal Laws • Office of Foreign Asset Control (OFAC) • Review worldwide compliance • Worldwide operations • Global license base • Compliance activities • Knowledge and experience • Other global expertise • Familiarity with Home and Host country laws • Coordination with benefits from National Health Care schemes • Coordination with Workers’ Compensation • Vendor licensing in foreign countries

40. Best Practices – • Preparation and information • Communication – open, thorough, often • Benefits Package – attention to details, completeness, applicability • Carrier/vendor recommendation – who has the right tools, experience, infrastructure to best support needs • Attention to Family Issues • Personal/Professional Needs and Wants • Buying international for best international results

41. Wrap up Question & answer period