Aliens Among Us: The Uninsurables


David Oxley is Managing Director of Coppergate International's Houston-based U.S. practice. Coppergate provides specialist advice to over 2,000 clients in Europe and America relating to cross-border immigration, tax, social security, Human Resources, and family orientation matters arising from the movement of key talent around the world. Prior to his tenure at Coppergate, David was a senior manager with Ernst & Young's Expatriate Services Consulting Group in London, and global head of HR for the trading business of a Fortune 100 energy company. David is a graduate and fellow of the Chartered Institute of Personnel and Development.

The U.S. insurance industry is guilty of massive misrepresentation. Far from being the hyper competitive, super convenient, low-cost provider of consumer insurance portrayed in slick TV marketing campaigns, the industry has singularly and spectacularly failed to provide reasonable insurance services to one rapidly growing U.S. demographic group.

Many insurance industry professionals reading this article may even now be sighing with exasperation at the idea of another socially conscious article on health insurance for the poor and the elderly. Interesting and relevant these topics may be, but I propose to address a group whose plight is all the more perplexing because—unlike the poor and the elderly—they remain perfectly capable of meeting their premium payments. Legally resident alien professionals are an affluent and rapidly growing sector of the domestic economy. Often highly paid, with corporate sponsorship and guaranteed employment, such professionals bring their families to the United States and participate fully in the economy during assignments that typically range between two and five years.

What People Want

Whether home is London, Sydney, or Capetown, American products, terminology, and politics are inescapable. Though impressions of life in America formed from such sources are necessarily distorted, such impressions are often the best information available to foreign nationals contemplating a term of service within U.S. borders.

Workers from countries that boast universal or near-universal health care often express grave concerns over what they perceive as a gluttonous and mercenary U.S. health care system. Tabloid reports and a few high-profile cases provoke fear—not entirely unreasonable—regarding the legendary litigiousness of American society. Many foreign workers fully expect to be robbed by American health care workers and left for dead at the scene of an accident, then sued for all they own if they survive.

As a result of these factors, health and liability insurance typically top the list of concerns expressed by foreign nationals to prospective employers in the U.S. Generous employers accommodate such concerns by arranging coverage to supplement their home country plans, or by enrolling prized, high potential, international executives in an expensive U.S. domestic plan. Less generous employers often still provide assistance in navigating the immensely complicated American health care billing and reimbursement system. International Human Resources departments have learned to address personal liability issues forcefully and proactively.

What People Get

Their major concerns regarding health care and liability addressed by most employers, foreign nationals arrive on American shores expecting their insurance hassles to be minimal at worst. Instead, they face a perverse reality. Though health care and liability issues are largely solved before their arrival, and property concerns are usually laid to rest with a good renters or homeowners policy, the entry of a foreign national into America's car-happy culture rapidly devolves into a prolonged stay in the insurance industry's automotive twilight zone. Faced with a newly situated expatriate assignee, most insurance companies decline to present so much as a quote for auto insurance.

How can this be? Has a university-sponsored research study shown that foreign drivers are higher risks than the native variety? In a word, no. In fact, compared to most developed nations, U.S. driver training is woefully inadequate, and most foreign nationals consider U.S. state driving tests to be something of a simple-minded joke.

Here are the facts. The Immigration and Naturalization Service takes between one and six months to process a family's visas. It takes an additional two to eight weeks to get a Social Security Number. State Departments of Motor Vehicles will not permit a person to take a drivers license test without a valid Social Security Number, and no insurer will issue an automobile policy unless the policy holder has a valid state drivers license. Most states will not allow a vehicle to leave the sales or rental lot without proof of insurance. Thus—despite the inadequacy of public transportation in most American cities, and the mobility demanded of professionals by most employers—most newly resident aliens cannot reasonably expect to acquire an automobile until at least a month or two after arrival in the United States.

Even after the foreign national acquires a vehicle, he faces other challenges. Consider the mother-in-law visit. Distance and bureaucracy often tempt relatives visiting from the home country to stay for a month or more. In addition to the obvious distractions posed by a live-in mother-in-law, there are troubling insurance considerations. Any senior citizen visiting the U.S. for a month or more needs medical insurance. The products on offer cater more to the holidaymaker than the perpetual visiting relative with asthma and an arthritic hip.

Forget about lending her the family car.

A Call to Action

Where is the sense is this? Within a multi-national company, international assignees tend to be the cream of the crop. Highly paid, often receiving assignment allowances to pay their rent, car lease, and children's private-school tuition, these are not people with financial problems. In fact, these are typically the careful types, with not so much as an overdraft on their financial records, much less major credit problems. In an increasingly difficult and competitive economy, why are insurers not falling over themselves to attract this easy money?

Do some esoteric regulations prevent insurers from offering tailored, focused, and affordable insurances services to foreign nationals? Not really. Instead, we see a conservative U.S. insurance industry, saddled with a peculiarly insular nationalist perspective (there is life east of New York and west of Hawaii!) and a rampant bureaucracy. In the existing climate, the ability to look beyond the lack of a U.S. driver's license to 20 years of extraordinary insurance and credit history overseas seems quite beyond most insurers.

The solution? Perhaps there isn't one. Maybe this strange, humiliating ritual constitutes part of the price of a foreign national's entry into the U.S. job market. The brave will survive and perhaps get green cards; the weak will be banished, crying into their warm beer, a few months after arrival.

Increasingly, the complexities not just in insurance, but immigration, tax, social security, wills, mortgages, financial planning, spousal career support, and children's education are reinforcing the critical role of expatriate and international HR consultancies who specialize in navigating these hazardous bureaucratic shoals. This is good news for those of us employed in the field: the greater the complexity and insanity, the better! Despite my most mercenary tendencies, however, I can't help but feel that the insurance industry—if only as a matter of self-interest—should do more to provide for affluent foreign professionals who do vital work on behalf us the U.S. business community.

Relevant Links

Expat Exchange. The largest regionally indexed online information resource for the English-speaking expatriate community.

Expat Focus. Provides expat news, an international job vacancy board, independent financial advice, a discussion forum, and much more.

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