Travel Health Insurance Providing Creditable Coverage

Travel Health Insurance Providing Creditable Coverage: Why You Need It, and Where to Find It

Delphine Foo-Matkin and Michael Matkin are preparing to embark on the surf trip of their dreams: two years riding waves across five continents and fifteen countries. Both of them had been surfing for several years at Rockaway Beach in New York City before they met for the first time on the boardwalk. Five years later, they’re now partners for life and regularly wake up together at 4:30 a.m. for dawn patrol. You can keep up with their preparation and travels at Surfing Around the World.

Figuring out health insurance options in the United States isn’t simple. Throw two-year round-the-world travel plans into the mix and it starts looking even uglier.

Delphine Foo-Matkin

Photo by Thomas Volovar

When my husband and I started seriously considering the idea of traveling around the world to surf for two years, one of our most pressing concerns was how to protect our health during our trip as well as after we return back home to the U.S. My husband holds a full-time position that provides health insurance coverage for both of us. However, we won’t be eligible for COBRA since he isn’t being laid off, and his company has fewer than twenty employees at the moment. Those are both requirements for COBRA eligibility.

In addition to finding the best level of coverage and customer service, it’s important to ensure that the travel health insurance policy you choose offers what is known as “creditable coverage.” “Creditable coverage” signifies a comprehensive health insurance policy within the U.S. in which the health coverage is not secondary to any other kind of insurance (eg. Liability or accident insurance).

In the United States, if you have a gap of longer than 63 days between your last creditable policy and a new policy, the new insurance provider can refuse coverage for any pre-existing conditions for up to eighteen months. The definition of pre-existing condition, for health insurance exclusion purposes, is anything for which you sought treatment or consultation within the six months prior to applying for the new insurance. There’s a great explanation of creditable coverage in the article Health Insurance for American Travelers by Keith and Amy Sutter that was featured on Briefcase to Backpack in February 2010.

Many backpacker travel insurance companies, such as World Nomads, provide excellent levels of coverage and service, but don’t necessarily provide creditable coverage. Being slightly hypochondriac and extremely cautious, the thought of returning home and not being able to get adequate care makes me more than a little nervous. Needless to say, we spent a considerable amount of time looking for health policies that are considered creditable coverage.

What follows is a quick summary of our options that we pieced together through weeks of research. It’s by no means the definitive guide to travel health insurance. Your own situation will probably be different than ours, so make sure you look into all of your options as thoroughly as you can before deciding on your type of insurance and amount of coverage.

Option 1

Option number one is to maintain a policy in the U.S. in addition to a travel policy. Although this is a viable option for the short-term traveler or the deep-pocketed, it’s hardly ideal for extended budget travel. We thought we might be able to purchase a travel policy along with a catastrophic plan to cover us cheaply in the States, but catastrophic health plans, while affordable alternatives to comprehensive plans, are generally not considered creditable.

Option 2

Option two is to take our chances and purchase a travel plan that doesn’t cover us in the U.S., and is therefore also not considered creditable coverage. This is the riskiest option because if an emergency health situation occurs while we’re abroad that requires care back home, the costs incurred by receiving healthcare in the States can become unmanageable if not covered by an insurance policy.

Option 3

Our third and most attractive option is one we came upon only after much searching: purchase a policy that provides long-term travel coverage abroad as well as in the U.S. Sounds like a no-brainer, right? The catch is that, if you don’t know they exist, it’s quite difficult to find information about these policies. The companies that offer these kinds of policies don’t advertise very well, and only after trolling many long-term travel forums and asking around did we find out about them. The ones we found were:

HTH Worldwide’s policy called Global Citizen offers long-term coverage abroad and in the U.S. The plan is fairly comprehensive. Unfortunately, as residents of New York, we’re not eligible for this policy at the moment. Check that you live in one of the states listed in their “eligibility” section.
International Medical Group (IMG) offers a policy called Global Medical Insurance designed for people living abroad or long-term travelers. You can choose to include the U.S. in your coverage, for a higher premium.

The Verdict?

The costs that were quoted to us for the IMG policy seems reasonable: $2143 per year for both of us, with a policy that has a $5000 deductible; much more affordable than the estimate we calculated of $10,000 per year for Option 1 above.

We’re going to go with the IMG policy, since it’s the only one certified as creditable coverage for which we’re currently eligible. Hopefully, we won’t ever need to use it, but it will give us a lot of peace of mind to know that we’ve got our bases covered.

Disclaimer: The information provided here is for informational purposes only. Delphine and Michael are not licensed insurance brokers or sales people. You should consult a professional insurance broker or salesperson to best determine your health insurance needs.”

Check out Meet Plan Go’s new trip planning tools including insurance and RTW/multi-stop tickets.



Other comments

4 Comments on "Travel Health Insurance Providing Creditable Coverage"

  1. Brendan Sharkey on Mon, 27th Jun 2011 10:59 am 

    Good Article. I’d like to make two quick points of clarification. I work for HTH Worldwide. Our Global Citizen plan is available to all Americans applying for coverage outside the United States. We also sell to Americans in 38 states prior to departure. Our plan is true licensed and admitted health insurance, which fully protects members under the law.

    Our certificate of insurance defines creditable coverage in the following manner:

    Creditable Coverage means coverage provided under:
    1. a self-funded or self-insured employee welfare benefit plan that provides health benefits and that is established in accordance with the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 101 et seq.);
    2. a group health benefit plan provided by a health insurance carrier or health maintenance organization;
    3. an individual health insurance policy or evidence of coverage;
    4. Part A or Part B of Title XVIII of the Social Security Act (42 U.S.C. Section 1395c et seq.);
    5. Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), other than coverage consisting solely of benefits under Section 1928 of that Act (42 U.S.C. Section 1396s);
    6. Chapter 55, Title 10, United States Code (10 U.S.C. Section 1071 et seq.);
    7. A medical program of the Indian Health Service or of a tribal organization;
    8. A state or political subdivision health benefits risk pool;
    9. A health plan offered under Chapter 89, Title 5, United States Code (5 U.S.C. Section 8901 et seq.)
    10. A public health plan as defined by federal regulations;
    11. A health benefit plan under Section 5 (e), Peace Corps Act (22 U.S.C. Section 2504 (e)).

    You’ll note that there is no reference to Surplus lines insurance, which is the type of policy offered by IMG. We accept health insurance policies as creditable coverage but not Surplus and Excess lines policies. Surplus lines insurance is meant to be offered only in cases where a “licensed and admitted” health insurance plan is not available in a particular jurisdiction.

    Be careful to buy true creditable coverage.

  2. Keith Sutter on Tue, 28th Jun 2011 5:46 pm 

    Brendan – thanks for your post. My wife Amy and I were very interested in an HTH policy for our year abroad. Unfortunatly your company delined us coverage due to underwriting, with no explanation or effort to help us understand what we could do next.

    You can read more about our experiance on our guest BTB post here: http://b2b.meetplango.com/2010/02/health-insurance-for-american-travelers/

  3. Delphine Foo on Thu, 30th Jun 2011 11:36 pm 

    Thanks for the clarification, Brendan. We found this topic extremely confusing due to the murkiness of the language in all of the small print for every company’s policies and exclusions.

    We called our current health insurance provider, United Healthcare, and were told that as long as the policy we hold provides “comprehensive” care that covers “preventive” treatment, they consider it to be creditable coverage. IMG’s Global Medical policy covers wellness (preventive) care after the first 12 months of coverage, and they will also provide a certificate of creditable coverage when our policy is up.

  4. Weekly Travel Blog Links — LandingStanding on Mon, 4th Jul 2011 7:03 am 

    […] down to the essentials in the most informative article on travel insurance that I have seen so far. Less than $2,200 to insure a couple for a whole year? I would take that in a […]

Career Break Guide Table of Contents

Meet Plan Go