When looking at insurance options, regardless of the type of plan, there are a few key items that are the backbone of an insurance plan. Once you’ve determined if you’ll have a group plan or individual plans, you’ll need to focus on these top-level issues to select your "team" before diving in to plan benefits.
The Three-Part Team
There are three distinct jobs in any insurance plan, all of which are equally important:
- The "carrier" or "underwriter"
- The terms "carrier" and "underwriter" are largely interchangeable and refer to the entity financially responsible for payment of claims. We will use the term "carrier" – and unless you go direct to a carrier (more about that below), you may never meet anyone from your carrier.
- The "broker", "agent" or "insurance company"
- Most international student health insurance is sold through insurance companies that focus on the international student market, typically acting as brokers or agents and offering coverage written by a particular insurance carrier – we will refer to them as the "company," regardless of their technical insurance status. Having a knowledgeable company, fully immersed in international education and backed by a solid carrier, is a must. Just look around the NAFSA expo hall – they are all there. This is the company you will know the best and deal with the most. The company should educate you on your options, educate you and your students on your plan, streamline all management of the plan like enrollments, and should always be there to help should you have claims problems, major cases or any other issue. A good insurance company cements the team into a single functioning unit.
- The "third-party administrator" or TPA
- The final piece of the team is the TPA (third-party administrator), which is the entity that actually processes and pays the claims. The TPA duties can be handled by the carrier or the insurance company, but is often contracted out. You and your students will work with the TPA for all claims processing.
Each is equally important and it’s imperative that all entities work together efficiently and meet all of the requirements below, as a team. The best insurance carrier in the world can create havoc for your students if the insurance company or TPA is weak; and the best TPA or broker in the world cannot do anything to change the rating or financial solvency of the carrier. Before you buy, know who the insurance company or broker is; know who the carrier or underwriter is; and know who will actually process and pay the claims. Even in the case where a carrier sells directly to a school and processes claims internally (meaning all three jobs are handled by the carrier), you should evaluate each part of the team. The biggest concern in a direct relationship tends to be how well that carrier is adapted to and focused on the international student market, with separate service teams and educational resources specifically for international students. If international students are thrown together with domestic students, with no separate educational or service resources, it is very difficult to meet your international students’ particular needs.
Financial Rating of Carrier
The insurance carrier is the financial backbone of any insurance plan, and it is the entity legally obligated for the payment of claims. All insurance carriers receive financial strength ratings from at least one rating agency, often more.
Why does an insurance rating matter?
Ratings showcase how financially solid the insurance carrier is, and therefore how likely it is that the carrier will be able to pay claims as they come due. For a rating to be valid, it must be held by the same entity that appears on your certificate, not a parent company, subsidiary or member of a family of companies. Many insurance carriers have complicated corporate structures, with many parent and subsidiary companies, often as a result of compliance requirements around the world or as liability protection. The rating of a parent company is no good if the subsidiary writes the business - that corporate structure protects the parent from the debts of the subsidiary.
What rating should my insurance carrier have?
It’s just like in school – you want As, not Bs. For rating guidance, we can look to the J regulations, as their guidance on this point is solid. Using just the two main rating agencies, you should look for:
- an A.M. Best rating of "A−" or above;
- a Standard & Poor's (S&P) Claims-paying Ability rating of "A−" or above;
Although these ratings are required for any student or scholar on a J visa, these levels are a good indicator to use for all student visa categories. There is no reason to settle for a B-rated carrier for any of your students – A-rated options abound.
The insurance rating needs to be held by the exact same entity that is underwriting your business, and it is easy to check through the Standard and Poor’s and AM Best websites. Both offer free accounts, and once created you can search for your insurance carrier to locate their rating. You should check your carrier’s rating annually, as ratings change as the financial condition of the company and the risks it is exposed to change.
Other Factors To Consider
The financial rating applies only to the actual carrier. All of the remaining points, though, are relevant to all three pieces of the team – carrier, insurance company and TPA.
International or Domestic?
For your carrier, this is a legitimate question, however for your broker and TPA, it is not. Your insurance company and TPA, and all claims processing and payment, must be in the US as it just doesn’t work to have that done outside of the country.
When looking at carriers, the international student market is well-served by both domestic carriers (like UnitedHealthcare and Aetna) and international carriers (like Lloyds). For those schools that choose an ACA-compliant group plan, then a domestic US carrier is a must as they are typically the only ones to offer such coverage and have a strong network of providers as well.
The main issue to watch for with domestic carriers is whether they have experience and systems to deal with the large number of foreign students and provide the right level of service and support to them in their language. Issues like accepting international names, where a participant might have the same first and last name or double-barreled names could create problems in their systems not setup for these formats; or carriers with domestic-focused plan administration may overly rely on mail, with not enough online or email capability.
International carriers are typically more adept at handling international students, with technology and support systems in place around the globe and in the US. International carriers also tend to be a little more flexible with benefits and pricing, as they have more experience with the global markets. The main points to look out for with an international carrier is to ensure they have a strong PPO network in the USA and that they have US-based plan administration. The PPO network will be the primary point of access for your participants to seek treatment, and can also reduce your claims as strong PPO networks can negotiate good discounts.
In summary there are high-quality domestic and international carriers serving this market, so the choice will come down to the product, pricing, reputation and experience in the market.
Reputation and References
The reputation of an insurance team (carrier, company and TPA) is critical. How well they are performing with their existing client base as well as what past and present clients have to say about how well they are doing will give you excellent insight. Simply ask the carrier for a few industry references, with whom you can follow up. Make sure to ask for some former clients as well – you can find out why they left. You can also ask around internally in your own circles, through the international education listservs or LinkedIn. All these platforms will allow you to connect with other schools similar to yours and find out who they are using and what their experiences have been like.
Remember, the team matters, so when asking for references, you want to know someone’s experience with a particular company or broker, using a specific carrier, with claims processed by a particular TPA. Any break in that chain can cause major headaches. For those companies that work consistently for a long time with a carrier, it can be quite simple, as all parts of the team may be intact for years. Other companies change carriers and TPAs frequently, so you may not want to be the guinea pig. Any company should be right upfront about the carrier and TPA – any evasiveness on these points is a red flag.
International education is a global business, and all the necessary technology to administer insurance globally and efficiently is available. Has your team committed to technology sufficiently to ensure efficient administration for you and your participants? Is the company relying on the carrier’s enrollment technology? If so, is that technology custom-built for international students, or at least proven to be workable for them? Most of the good insurance companies will invest heavily in their own technology to layer on top of the carrier and TPA’s systems, ensuring efficiency among the team.
There are new carriers and companies that enter the student market every few years, with varying degrees of experience or understanding of the international student market. It can take years for a carrier to understand how the business works in terms of claim patterns, billing arrangements, working with a solid PPO provider to obtain good network discounts, etc. A good question to ask is how long that team has been working in the international student world? For a truly stable insurance solution, you want to see 5+ years experience from the carrier, longer from the company and TPA, as that would give them the time to really understand the marketplace.
The service and support you and your students receive is the front line of your insurance plan, and the most visible to everyone. This is where most plans succeed or fail - knowing that claims are being paid efficiently and that students are being responded to in a timely and professional manner. When evaluating the service associated with your plan, there are a few key points to remember:
- It is imperative that the administration of the plan is located within the US, for service, support and a good understanding of the US healthcare system.
- Yes, technology was mentioned above, but it’s worth mentioning again as a service item. You should look for custom-built internet technology for managing enrollment and streamlining your administration. In addition, most carriers or TPAs now offer internet-based claims administration – negating the need for thousands of phone calls (like "what’s happened to my claim") and endless frustration.
- Provider network
- A strong provider network (PPO Network) will help your participants with access to care and also provide important pricing discounts, as network providers have negotiated heavily discounted rates that equate to big savings for your plan, and therefore lower renewal rates.
- The extra features that your plan provides will make the administration easier for you and your participants. Do they offer online claims tracking? Access to documents online? Online enrollment? Email fulfillment providing id cards and policy documents electronically to all students?
- The student market is very unique, and having a company, carrier and TPA that has experience in the market is vital. They will understand and appreciate that working with international students is not the same as a US student, as they have encountered language barriers and cultural differences.
- Having translated policy and educational materials as well as support in multiple languages to assist students in their mother tongue is a huge advantage and will help your students greatly if they need to seek medical care.