Most group plans cover emergency medical costs while traveling, but stability clauses and missing cancellation coverage can leave gaps, say experts
As summer begins to wind down, employees are booking those last-minute travel deals and looking to their group benefits plan to provide travel coverage. But while group travel benefits are a fixture on most employer-sponsored plans, do they deliver the protection employees expect?
The short answer, according to three industry specialists, is that coverage works. Until it doesn't.
Travel benefits provide meaningful protection
“Group travel benefits absolutely provide meaningful protection, particularly for unexpected medical emergencies,” said Jeannette Makad, associate vice-president of benefits enablement and insights at NFP. The catch, she adds, is that group travel “is not a one-size-fits-all, but meant to insure the masses, if you will.”
Jarred French, senior consultant at BFL CANADA agrees, noting “Canadians generally are well protected against catastrophic medical risks while traveling,” but he notes that emergency coverage typically handles only the first appointment to assess and treat, and not subsequent visits.
“I think that's an important gap sometimes that people overlook in terms of coverages,” he said.
Group plans can also extend to repatriation of a vehicle or flying a family member to the employee's location, which makes the travel insurance package more comprehensive than many plan members realize.
Still, French noted too many employees travel without reviewing their policy or understanding how pre-existing condition and medical stability provisions could affect them.
“I think it's really about being prepared and employees understanding what coverage they do have,” he said.
Stability clause, the ‘stickler’ in group benefits
Makad draws a distinction between having travel coverage on paper and being protected for a specific trip as the gap between the two comes down to the employee's health, destination, planned activities, and length of stay.
The biggest landmine for employees, according to Makad, is the pre-existing condition and medical stability clause as she calls it “the stickler” in most group contracts.
Under many plans, an employee's health must have been stable for a set period – often 90 days - or the coverage disappears. That presents a problem for employees as well because definition of instability is broad, she said.
“That could be an increase or a decrease in medication. It could be a recent doctor's visit when you've been given tests that, like diagnostics that you have to go and get, and you haven't gotten those yet. It could even be symptoms that you haven't even gone to talk to anybody about yet. It could literally be anything,” she said.
French echoed Makad’s sentiments, noting if employees have an ongoing medical condition, plan sponsors should make sure they check with their doctor to confirm “they're considered medically stable and okay to travel before leaving the country,” he said. To that end, he recommends employees call the insurance carrier to “pre-confirm if there's any potential issues around that,” he said.
Standalone travel insurance policies can offer more flexibility on this front. Vicky Brulotte, client executive for personal insurance, property and casualty at NFP, emphasized that for individuals over 60, standalone policies allow add-ons that shorten the stability window.
“Employees are going to pay a little bit more to be covered even if a certain medical condition is not stable for at least 6 months. It's going to be reduced to 7 days with one of the companies or 30 days with another one,” she said, noting conditions apply as one carrier caps claims at $300,000, and another excludes cardiovascular events. Still, the options exist where group plans offer none.
Where traditional travel benefits fall short
Beyond medical stability, group plans carry other limits that plan sponsors tend to overlook. Notably, trip cancellation, lost baggage, and non-medical expenses are absent from most group contracts.
“If you need trip cancellation, baggage coverage, some insurance providers will include that in a group program, but many do not,” French said, while Makad added that a brief surge in trip cancellation coverage on group plans before the pandemic “quickly stopped being a thing” once COVID made the risk too expensive to underwrite.
Destination also matters here as Brulotte noted she checks the Government of Canada's travel advisories for any destination outside the usual corridors and makes sure clients understand that any incident tied to an active advisory is excluded from coverage - medical or cancellation.
Makad agrees that the same assumption-of-risk principle applies under group plans. She recommends that plan members call their carrier or travel assist program before departure to confirm their destination is not excluded and emphasized the consequences of traveling without that confirmation can leave employees stranded without medical support.
One resource that often goes underused is the travel assistance program bundled with most group plans. According to Makad, claims can be and have been declined because the employee failed to contact the travel assist provider in time.
The service also does more than authorize treatment as it negotiates hospital costs, arranges evacuation, and coordinates with other payers.
Remote and hybrid work is also adding a new wrinkle. Makad warns that an employee who picks up and relocates abroad for months at a time enters “a very gray area” under group coverage. She said business travel or expatriate coverage may be necessary, and that taxation and employment law concerns often sit outside the plan altogether.
More than one travel benefit?
On coordination of benefits, Makad notes that employees can hold multiple travel policies at once – whether it’s group, standalone, credit card, spousal - and that sorting out who pays what happens after the emergency, not during it. While French agrees that this coordination is one of the strongest elements of group coverage and notes employees can hold more than one travel policy, he warns against over-insuring.
The better approach, he said, is to assess individual needs and risk tolerance, then match coverage accordingly.
While group travel coverage carries real value, it only delivers when employees understand their contract and know what to do in an emergency, said Makad.
“Most times, travel is almost like an afterthought,” Makad said. “We're not asking plan sponsors and plan members to become experts in policies, but experts in resourcing information. It’s to give them enough knowledge so that they know what questions to ask before they leave."
