The global economy continues to drive employers to send their employees abroad. But you, as the employer, need to have a solid plan in place for moving those employees to your operations outside of Canada.

Aside from looking at compensation, relocation and support for adapting to local customs and culture, you’ll also need to navigate the global and expatriate benefits landscape, which can be complex and frustrating.

Employee categories
But you first need to know into which category of employee your internationally assignee falls. Consider the following three categories of employees.

  • Expatriates – Canadian employees sent outside of Canada temporarily with the intention of returning after the assignment is over. (Generally, a person is considered an expatriate when he or she will be working away from Canada for more than six months.)
  • Third-country nationals Employees from outside of Canada who work for a Canadian company are sent to another country outside of Canada (e.g., an Italian citizen working for your Canadian company who is going to work in your new division in Switzerland).
  • Locally engaged staff – Employees working for a Canadian company in their own country of origin.

The category of employee will determine your approach to benefits coverage. For example, for expatriates, can your Canadian group plan insurer implement a plan for your internationally assigned employees that will form an extension of your Canadian group benefits plan? Or will you need to engage a specialty provider for an individual or group expatriate or local benefits solution? For locally engaged staff, you may need to work with an insurer in the new country to provide benefits for them.

Often, Canadian employers end up providing benefits for employees from more than one of these categories. One benefits plan may not be possible for everyone, so you may need several solutions by different providers.

Location, location, location
The location of your international division is also key in determining benefits coverage. While all countries will have different legislative or compliance requirements, there are regional differences on what benefits are available or are customarily provided by employers, as well as benefits that are mandated by local government. An insurer specializing in international benefits can help you navigate requirements in the target country and ensure your benefits are compliant.

There may be sanctions associated with the target country or restrictions on the nationality of insurers that are able to do business there. Ask your international insurer if there are any countries to which it’s unable to extend benefits.

Location will also determine whether you should be including additional policies or riders that cover risks such as war, terrorism, non-medical evacuation, or kidnap or ransom, for example.

Employee dependents and visits
If your employee has dependents, you need to know if they’re relocating with them or remaining in Canada. “Trailing dependents” as they’re called may require you to continue benefits in Canada, so you’ll need to make special arrangements with your Canadian insurer to accommodate them.

Will your expatriate employee be returning to Canada during their posting for periods of time? You may need to maintain benefits in Canada to cover any expenses incurred while they’re visiting home.

Regardless, whenever possible, ensure your expatriate employee maintains their provincial health coverage. Although rules vary, all provinces allow some degree of benefits extension for employees working abroad. (Generally, employees simply submit a letter from their employer confirming international employment.) Maintaining provincial health coverage also allows your returning expatriate to be eligible for provincial healthcare without having to satisfy a waiting period in order to qualify.

Similar but different
While your goal will likely be to keep your employee whole during their foreign assignment and when they return home, you’ll both have to be prepared that benefits will likely be comparable but not equal to those offered by your Canadian plan. There will be benefits offered in your Canadian plan (e.g., critical illness) that either aren’t available or aren’t customary in the target country, while there may be additional benefits (e.g., meal assistance through vouchers) you’ll need to include that aren’t part of your Canadian offering.

You’ll also need to be prepared for the cost differential for international benefits and what sharing the cost of benefits looks like on an international scale. Clearly communicate these differences to your employee and manage their expectations.

Sending an employee to an assignment abroad is a challenging endeavour for both you and your employee. Make sure you understand the context of your international location and have a solid strategy in place to help you source and implement a comprehensive benefits plan.

Kim Siddall is People Corporation Inc.'s vice-president of enterprise consulting for the West. She has more than 20 years of experience in the health and benefits industry. These are the views of the author and not necessarily those of Benefits Canada.
Copyright © 2021 Transcontinental Media G.P. Originally published on

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Steve Benson:

Well written article and I have forwarded to my colleague to reach out to Ms. Siddall to provide information about SSQ’s Group Specialty Products’ stand-alone Expat group insurance solutions.

Wednesday, December 09 at 6:33 am | Reply

Brian LaBelle:

Great article Kim! Something to keep in mind is that offshore insurers in some countries will only issue insurance contracts in the local language and you may need to request English copies or go fro translation. some offshore insurers will also issue International coverage for local employees going to another country at an additional premium cost. As you have noted research ahead of time is key for a successful international assignment.

Wednesday, March 23 at 11:43 am | Reply

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