Healthcare Alert For US Expats

Expats in the United States face major changes to their benefits packages in the coming months as employers try to put a sticking plaster over the rising costs of healthcare.

The rising cost of providing medical insurance for employers comes from healthcare reforms.

As a result, research by expat benefits firm mercer shows expat employers are considering cost-cutting by looking for cheaper healthcare plans.

The survey reported three-quarters of firms want to switch to low-cost plans over the next three years as the cost of providing the cover is predicted to increase by around 4% over the next 12 months.

The rising price of healthcare follows a period of costs increasing at a much slower rate.

Cuts in cover

Some employers could face paying an extra 6% for health cover without any increase in benefits if they take no action by the end of 2015.

The study shows just under a third of employers are renewing their healthcare arrangements without making any changes.

The price increases come from new laws demanding that employers open their healthcare provision to all employees working more than 30 hours a week.

As more workers receive health cover, companies will have to pay more in premiums.

To keep costs down, they will need to reduce the benefits available for all employees, including expats.

The new measure is expected to affect between a fifth and quarter of all employers.

Just under two-thirds have already made the necessary changes to the healthcare they offer in advance of the law coming into effect, while around 15% have changed the terms of their employee health plans this year.

New rules

“Although the percentage increase is in single figures, for corporations with thousands of employees, the amount of money involved is large,” said mercer’s Tracy Watts.

“There were some worries employers would cut working hours to stay outside the new rules, but this doesn’t seem to have happened.

“Firms will have to be on top of their employee benefits packages to make sure the costs do not become unmanageable and these healthcare reforms are certainly offering them a challenge.”

Expats should also look for cuts in other benefits if their employer opts to retain their current healthcare package, as bosses may look to trim expenses in other areas to make up for the price increases.

Companies that fail to comply with the new rules face fines of $325 per employee, so take-up of enrolling more staff under healthcare plans is likely to be high.

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