Appropriate benefits and limits in your insurance plan
The insurance requirements for J1 visa participants required by the US State Department are very clear and concise in terms of their benefits and limits. They are, however, limited in their scope and while they do capture key high line benefits and limits, they do not capture any of the unique intricacies within the J1 visa program. They certainly do not consider the different types of participants that are on each program. Coupled with that, if you have participants that are going outbound from the USA, or do not travel to the USA, what are the appropriate levels of coverage and benefits for them?
Program Considerations
Within the J1 Visa category, there are a number of sub-categories for the various programs, and within those programs are a unique and very different demographic. When looking at insurance coverage, you will want to consider these different demographics and what their needs are. Key items you will want to consider are:
- Length of time abroad
- Age of participants
- Financial sensitivity
- Any other special requirements or circumstances
When thinking about these key areas, you will notice that within the various J1 visa subcategories, there are small differences that will guide your benefits and limits you will want to consider:
Work and Travel
Time abroad: 3 to 4 months
Average age: 18 to 29 years old
Financial Sensitivity: Reasonably independent
Due to the relatively short nature of this program, most insurance policies for Work and Travel participants tend to mirror the existing J1 Visa requirements. A$100,000 policy maximum, with a $100 deductible, along with standard medical benefits are usually sufficient, and extra benefits or higher limits are not required. For this reason, most Work and Travel plans tend to meet the J1 insurance requirements with few other extra benefits.
Au Pair
Time abroad: 12 months (with extension to 24 months)
Average age: 18 to 25 years old
Financial Sensitivity: Reasonably independent
Au Pairs are on their programs for a much longer time, and therefore, this is a key indicator that they might need a more comprehensive insurance policy. The minimum J1 requirements will most likely not meet their needs. Typically we see more comprehensive policies with policy maximums from $200,000 and higher, with lower deductible amounts and additional benefits included such as mental health and wellness.
High School
Time abroad: 10 months
Average age: 15 to 18 years old
Financial Sensitivity: Not financially independent
Like Au Pair’s, High School participants are abroad for a longer period of time and thus will typically need more extensive benefits than just the standard J1 regulations. Also, because high school students are younger and living with host families, out of pocket expenses are much more important. In a standard high school insurance plan, we will typically see a higher policy maximum ($200,000 or more), no deductible and more extensive benefits that will include coverage for mental health, high school sports, and more.
Interns and Trainees
Time abroad: 3 months, up to 18 months
Average age: 18 to 35 years old
Financial Sensitivity: Financially independent
Like the Work and Travel participants, Interns and Trainees can be abroad for a period of a few months up to potentially 18 months. For this reason, we tend to see many Intern and Trainee insurance plans mimic the basic style of plan we see for Work and Travel plans. The challenge with Interns and Trainees is that if they are staying longer, they may want a slightly more comprehensive plan for their longer time abroad. This is where an upgrade plan works very well, allowing those that are staying longer to upgrade their coverage.
Teacher Program
Time abroad: up to 3 years, with 1 or 2 year extension
Average age: 25 to 50 years old
Financial Sensitivity: Financially independent
The teacher program has become an increasingly popular category over the last few years, as more sponsors receive their designation for this category. Participants in this category are unlike the main J1 categories that we have listed above as they are typically older and may have dependents with them. Some sponsors choose to provide insurance for the entire time the teachers are in the USA, while others allow them to be insured by their employers insurance plan (if that is possible). When that is done, the teacher participants will typically only need 3 months of initial coverage when they arrive in the USA and before their employer's insurance plan starts. For these shorter term plans, they are often more limited in their scope as they are only providing a shorter term period of coverage. If you are providing coverage for the entire time the Teacher trainee is in the USA, you will want to consider a more comprehensive insurance option, similar to a plan you would offer an Au Pair.
Non-US Coverage
Due to the expensive nature of the US healthcare system, most inbound policies to the USA have lower limits such as $100,000 or $200,000 in total coverage. This is to protect the plan cost, as claims in the USA can mount up very quickly. When your participants are traveling to other countries, there is the ability to open up benefits as the cost of medical care is much cheaper. Non-US plans tend to start from around $1,000,000 in coverage (some plans are even unlimited), and will have no deductibles and a more wide open benefit list that will include full medical coverage, mental health, pre-existing condition coverage and more!
Key Benefits
While looking at your insurance plan, and adjusting the style of plan and benefits you need for your participants, there are a number of key benefits that you will want to consider:
Policy Maximum
This will obviously be driven by the program your participants are undertaking (as outlined above), but you will typically see policy maximum ranges from $100,000 (the current J1 minimum) up to $1,000,000.
Out of Pocket Payments
There are three main out of pocket areas on cultural exchange insurance plans; the main policy deductible, the ER deductible and coinsurance. Coinsurance is not very common in this market, as most plans will pay out 100% of benefits after the deductible is paid. The two deductibles that are very common are the main policy deductible, which typically ranges from $0 up to $100. Some Work and Travel plans in particular are also now using $200 deductibles and they can be either on a per condition basis, or per policy period. Then, there is the ER deductible, which is there to encourage participants to only use the emergency room in the case of a true emergency. This will typically be $250 or $350, and will be paid when a participant uses the emergency room for an illness and no further hospital admission is needed. Most ER deductibles are not applied to injuries.
Medical Benefits
You will want to make sure your plan provides full medical coverage up to the policy maximum. Some insurance plans will offer a “scheduled benefit list” which is a great way to save costs, but it can also leave your participants with a large amount of out of pocket expenses. Scheduled benefit insurance plans will place internal caps on medical benefits, such as $500 per day hospital benefit, $1,000 per day ICU benefit, etc…
Medical Evacuation and Repatriation
This is a standard benefit in all international insurance plans, and the J1 requirements require $50,000 in coverage for medical evacuation and $25,000 in coverage for repatriation of remains. Both of these levels are adequate and increasing them higher would only be a preference. Be mindful that you review your medical evacuation benefit to ensure it covers the cost to evacuate/repatriate a participant back to their home country in the event of a large illness or injury. Many plans will only evacuate to the nearest medical facility, but you should also make sure you include wording that brings the participant home, if needed.
Emergency Reunion
The emergency reunion benefit will bring a family member to where your participant is hospitalized, should a major injury of illness occur. While an important benefit for all participants traveling abroad, it is especially important for high school programs and under-age participants.
Pre-existing Conditions
It is not very common to have a pre-existing condition benefit in cultural exchange and youth travel insurance plans, mainly due to the cost. However, if you would like to include a pre-existing condition benefit, a good way to handle this is through an acute onset benefit. This will cover up to a limited amount (typically $10,000 or $20,000) for an acute onset of a pre-existing condition.
Mental Health
Mental health benefits are becoming increasingly common in cultural exchange insurance plans. You may not see this benefit added to Work and Travel plans, but it’s becoming more common for this coverage to be included for longer programs, such as Intern/Trainee, Au Pair, and High School.
Sports
Most cultural exchange insurance plans include non-contact, leisure and recreational sports coverage. However, if participants are playing for a local sports team, or engaging in any contact sports, this would be outside of the scope of most insurance policies unless it was specifically covered. The general exception to this rule are high school plans, which should always include a high school sports benefit.
Telemedicine
As outlined in our article about Telemedicine, this is becoming an increasingly popular benefit that you will want to have included in your insurance plan. Not only is it a great way to contain costs, it also offers a very convenient and easy way for your participants to seek medical care for less severe conditions.
- Overview
- Tips when evaluating new insurance options
- Moving existing participants to your new insurance carrier
- Insurance carrier ratings and why they matter
- Appropriate benefits and limits in your insurance plan
- Handling dependents on your insurance plan
- What information should I share when looking for new quotes?
- ACA and Cultural Exchange Participants
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