While the provision of travel insurance has long been a staple in many group benefits plans, it was thrust into the spotlight during the coronavirus pandemic.
The benefit helps cover unexpected costs that employees may incur while travelling outside of the country, including emergency travel assistance services and emergency medical costs. In addition, some policies include trip interruption or cancellation coverage, but limitations often apply, says Kevin Dorse, assistant vice-president of strategic communications and public affairs at the Canadian Life and Health Insurance Association.
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Each benefits plan has its own set of restrictions, such as the number of days an employee can travel out of the country to maintain the coverage and the maximum funds available for medical assistance. In comparison, individual travel insurance plans include a stability clause, contractually defined to limit an insurer’s liability towards potential out-of-country claims that aren’t emergencies and that could have been covered by the province if the employee remained in Canada, says Vic Medland, chief executive officer at the Ontario Teachers Insurance Plan.
He calls group travel insurance “much more comprehensive coverage” compared to individual insurance because the group contract doesn’t have any pre-existing condition clauses. However, this isn’t the case for most group benefits plans in Canada.
By the numbers
• 39% — The percentage of Canadians who bought travel insurance in 2021 specifically seeking pandemic-related coverage
• 68.9% — The percentage of Canadians who made a claim for pandemic-related reasons in 2021
• 22.6% — The percentage of people who made a claim, but weren’t covered despite purchasing the policy for pandemic protection
Source: Cover Genius Travel Insurance survey, 2022
Over the last two years, as the pandemic disrupted and even halted travel, navigating and updating travel coverage was a challenge for employers and insurers. “During the pandemic, insurers were constantly monitoring government travel advisories to educate their employer customers and plan members about eligibility for coverage under the changing circumstances,” says Dorse.
During the pandemic, the OTIP updated its plan members about the changing rules, including the effect on travel coverage, in addition to the extensive benefits orientation it provides for new members and the regular newsletters it sends out.
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While most travel restrictions were lifted in early 2022, insurers are just beginning to see related claims rise back to pre-pandemic levels as people start to travel again, says Medland. “As the government continues to lift restrictions around COVID and vaccinations, where restrictions apply to [insurance] coverage for COVID, I think we’ll see those loosen up as well. I don’t think [employees will] have to worry quite as much moving forward as they have over the last two years.”
Indeed, since the onset of the pandemic, many insurers refined and standardized the language in their travel insurance so it’s easier for plan members to understand, he says. In addition, he notes many group plans were updated to include new options, such as allowing coverage for expenses if an employee needs to quarantine at their destination or any other coronavirus-related issues.
To make sure travel coverage is clear, Dorse suggests employers remind their employees to consult their workplace benefits booklets to understand what they’re entitled to and any limitations that may apply, as well as advising them of the process to follow in the event of an out-of-country emergency.
Sadie Janes is an associate editor at Benefits Canada.