Mandatory Health Insurance Rules
Step 2 - Understanding the System of Medical Expense Settlement
Navigating cross-border medical expense settlement presents significant administrative and financial complexities, demanding meticulous adherence to regulatory requirements.
Once you have identified the Country of Insurance and the Country of Residence, the next step is to determine if they are identical and if they differ, to ascertain whether a multilateral or bilateral Medical Expense Treaty exists between them.
Option 1. The Country of Insurance and the Country of Residence are identical
When an employee's country of Residence matches their country of Insurance, and there is no temporary stay in another country, the process for health care and social security is straightforward. The employee is required to register with the relevant healthcare authority in their country of Insurance, make contributions, and all medical expenses will be managed within that system, subject to its specific coverage, rates, and conditions (e.g., deductibles or co-payments).
Option 2. The Country of Insurance and the Country of Residence are NOT identical
Complexities arise when the country of Insurance differs from the country of Residence. These more intricate scenarios will be explored in subsequent sections.
Assignments within EU/EEA/Swiss Region
For healthcare and social security applicability, countries within the European Union (EU), European Economic Area (EEA), and Switzerland are subject to a coordinated framework, ensuring similar treatment of healthcare expenses for individuals moving between them.
Go to step 3.
Assignments between Bilateral Treaty Countries with Medical Expense Clause
To facilitate the settlement of medical care expenses, some countries have included specific medical expense clauses within their bilateral social security treaties. Go to step 3.
Assignments between Bilateral Treaty Countries without Medical Expense Clause
If the social security treaty does not contain a medical expense clause, expenses incurred in the country of Residence are not settled directly by a local healthcare insurer there.
Instead, employees must pay the costs upfront and submit claims to their healthcare insurer in the country of Insurance. Reimbursement will be based on the rates, deductibles, and personal contributions applicable in the country of Insurance, provided their statutory insurance plan offers coverage for expenses incurred abroad.
In cases where actual expenses exceed coverage, the employee is responsible for the additional costs. Supplementary international healthcare and/or travel insurance can offer a viable solution.
Assignments between Third Countries
In countries without a social security treaty, medical expenses are not settled directly by a local healthcare insurer. Instead, employees must submit claims to their healthcare insurer in their country of Insurance. Reimbursement will be based on the rates, deductibles, and personal contributions applicable in the employee's country of Insurance, provided there is statutory insurance that offers coverage for expenses incurred.
Elaboration
For cross-border work, it is not a matter of course that the employee lives in the same country where he/she has mandatory insurance. A situation could arise in which health care is necessary in another country than where the employee has insurance, possibly resulting in a complex situation with respect to financial/administrative settlement. The health care provider (f.e. doctor, hospital) will not just be able to charge the foreign health care insurer. In principle, the employee will first need to pay these medical expenses to the health care provider and then make a declaration from his health care insurer. This health care insurer will verify the invoices based on the policy and insured rates and will only initiate payment to the employee if the invoice is considered eligible. In short, a process that takes a lot of time, funding and red tape.
Some countries have entered into a treaty to make this settlement run smoother. This settlement has then been written down in a separate Medical Expense Clause of the social security treaty:
Caution
Family Members
When assessing social security applicability, the country where a family member is subject to social security must be determined independently of the employee's status. See step 4.
Tips & Best Practices
Declaring Medical Expenses: Country of Residence vs. Country of Insurance
A medical expense clause typically entitles an individual to receive healthcare in their country of residence, with costs covered by the mandatory health insurance in their country of insurance.