Expatriates in China have an enormous variety of choice available to them when looking to take out a health insurance plan for themselves, their families or their companies including both onshore and offshore health insurance options. Onshore health insurance plans are those that are managed and underwritten in China by insurance companies that comply with local Chinese regulations, while offshore health insurance plans will not fall under local Chinese insurance regulations.
With an ever-growing range of locally licensed insurance companies becoming available in China, the emphasis in the market is becoming increasingly weighted towards choosing a “Local” Provider instead of one based overseas. Though the hospitals currently have no restriction about what insurers they accept, the main reasons why choosing a plan from a local provider is usually suggested are due to legal compliancy and localised servicing.
For expatriates planning on working long-term in China, one of the most obvious benefits is that local providers are registered and compliant with the CIRC (Chinese Insurance Regulatory Commission) and therefore any plan taken out with a local provider will be adherent to all Chinese laws regarding Medical Insurance.
CIRC regulation offers residents in China advantages such as local dispute mitigation and compliancy, though this is mainly beneficial due to the fact that all onshore health insurance policies are processed in RMB for payment acceptance and claims reimbursement. This removes the need to use offshore bank accounts or deal with potential currency conversion fees. RMB policies also mean that insured members will be issued a local tax receipt, or “Fapiao”, and so the purchase will be recognised and accepted by the Chinese government for all tax purposes. This may be especially useful if the plan is purchased for an employee by their company.
Beyond local legal and tax complicacy, onshore health plans do provide other advantages over and above offshore plans, namely having improved management of hospital networks, application processing and underwriting due to their location in China.
Local providers will all have staff here in China whose job it is to grow and maintain their network of facilities with direct settlement agreements for both outpatient and inpatient treatment. This means that if there are any problems at the facility when a client goes for treatment, they can contact the local insurer’s office and immediately have the issue resolved. It also means that the hospitals are ensured fast payment in local currency in the event of high cost inpatient treatment, resulting in faster treatment guarantees in cases of emergency.
Having a local office also means that the actual administration and underwriting is done here in China, so it is easier to get the policy set up and for the client to receive the actual membership card. These processes are often delayed with international insurance companies due to either time zone differences or slow international mail services.
However, for clients whose insurance was originally purchased overseas, or is purchased by the company’s head office in their home country for their own local licensing and tax reasons, as long as the plan includes China within the coverage, they will still be able to avail themselves of all the benefits of the plan here in China. So it is still feasible to keep the international plan in place if that is more suitable, as there are no restriction on the hospitals to only accept locally licensed insurers. This is unlike some other expatriate hubs that only allow hospitals to accept local insurance providers, such as Abu Dhabi in the UAE for example.
The benefits of offshore plans are typically in line with the additional benefits provided by offshore health insurance plans with international coverage. If your job requires to travel around or outside of China during your residency, your plan will still provide high levels of coverage, and similarly if you come to a point when you are departing China, you can take your international health plan with you and continue the coverage it offers. This may be ideal for those who maybe do not want to risk a break in coverage or do not wish to risk losing coverage of existing conditions when they are underwritten for a new health plan after leaving China.
So, clients looking for health insurance in China still have the luxury of a very wide range of plans available to choose from. Increasingly, the world’s most renowned names in insurance are setting up office in China with companies such as Bupa, Cigna and Allianz now offering onshore plans in China as well as their international health options.
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If you are interested in further investigating what type of health insurance plans are most appropriate for your personal situation, our expert advisers are more than capable to provide you objective comparisons and help you understand the finer points between onshore and offshore health insurance policies.
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