The first thing to know about health insurance is that if you think you have it, you probably don’t.
You’ll know you have it if you’ve signed some papers to that effect – and re-sign them each year – or if there’s an extra bill you pay each month.
But in most cases, according to industry experts at The Triton’s recent Connection seminar and an informal poll of Triton readers, you don’t have the health insurance you think you do.
The difference between thinking and knowing is subtle, but significant. Nearly all yachts carry P&I (Protection and Indemnity) insurance that covers crew while they are in service to the yacht.
So if you fall down the stairs carrying a load of laundry and break an ankle, you’re covered. You even might be covered if you crash your scooter into a house on your day off, the idea being that you wouldn’t have been there riding that scooter had you not been working on that yacht.
But that’s not health insurance, the experts say. That’s accident insurance and it covers the yacht owner’s liability for his/her crew much in the same way workers’ compensation insurance covers a land-based business owner.
If you get the flu or cancer, the yacht’s liability insurance will not pay for doctor’s bills or surgery expenses. Nor is it likely to cover you if you break a leg on a skiing vacation. And it does not exist for you between jobs.
“The yacht policy is not health insurance,” said David Allen, senior vice president of Alliance Marine Risk Managers Inc. and a speaker at The Connection. “The yacht policy is only going to cover you if there’s an accident or occurrence. It does nothing for you to monitor your health.”
Health insurance does. It covers annual doctor visits for things such as a physical or pap smear, or to find out what that pain in your side really is. In many cases, the insured pays a co-pay and meets some level of a deductible; then the insurance pays the rest.
About half of yachts provide health insurance for their crews, according to The Triton’s poll.
Forty-three captains responded to the poll; 56 percent of their yachts (24) offered health insurance and 44 percent of yachts (19) did not. (For more poll results, see related story, page A17.)
Some yachts that don’t provide health insurance pay a little extra each month for crew to buy their own and some make the commitment to crew – at least to senior crew with longevity – that their medical expenses will be paid should something serious happen.
But Maria Karlsson, an independent insurance broker and a speaker at The Connection, urged crew not to let a yacht owner determine health insurance coverage.
“An individual plan is the best,” she said. “No one can take it away from you. If you leave the boat, you pay the premium and it stays with you. When you get on a boat, you can negotiate with the owner to reimburse you.”
Karlsson represents about a dozen insurance companies and said plans exist to cover just about anyone, foreign or American. Foreign crews are easier to insure because there are fewer limits on their itineraries, she said. U.S. crew can get good insurance for about $120-$150 a month if they leave the United States within 30 days of signing up for the plan and then are out of the country for six of the next 12 months.
Allen agreed that maintaining a personal, individual plan was best. Though Allen is not licensed to sell health insurance, he has been in yachting most of his life and in the insurance industry for 25 years.
“Have your own insurance,” he said. “You relieve yourself of a lot of these issues.”
Allen said he has the same advice for crew as he does a yacht owner: Carry a big deductible but protect your assets.
“The question is: How do you get a corporate owner to pay these premiums?” he said.
Many crew wonder why they should bother with health insurance at all, considering they are young and healthy, and the yacht will cover any accidents.
Karlsson told the story of a 24-year-old crew member who broke his back on the job. He was evacuated by airplane from the Caribbean to a hospital in Canada. The expenses for months of hospitals and doctors were all covered until he was well. Now, however, he is uninsured with a back that could be a problem again.
“I’m having trouble finding him affordable coverage now,” Karlsson said. “Get it before something happens to you. Get it while you’re healthy.”
Years ago, the Association of Yachting Professionals researched and organized a professional yacht crew health insurance policy. According to several attendees of the May Connection, the once-affordable premiums have grown to unaffordable amounts. One captain said he’s paying five times more than the original $150 a month and was looking to change.
Karlsson said bumps in annual premiums are common. She suggested crew periodically switch insurance companies as new enrollees are offered lower rates. As long as you stay healthy, moving around to different plans won’t hurt your coverage, she said.
One captain who took The Triton’s health insurance poll advised against that, however, as some benefits such as mammograms are only covered after a person has been insured a certain length of time. Plan-hopping can cause you to lose those benefits, and pre-existing conditions often aren’t covered for the first 24 months of enrollment.
“I encountered a problem a few years ago when I went from my personal policy to a group policy for all of the crew of a yacht I was captain of,” this captain reported. “We had the same benefits but it was slightly less expensive per person.
“When I left the yacht and wanted to go back on the personal policy, [the insurance company] was going to void all of my grandfathered benefits that took me over 24 months to get. I put up a big stink and they gave me back my benefits.
“I recommend that crew keep their own personal health insurance policy and ask that the yacht reimburse them for the expenses,” this captain said. “I have not had a problem doing this.”
While being costly for the owner, several captains said they believed crew health insurance to be a wise expense.
“Compared to the overall operating cost of the boat for the year, cost of the health insurance for each crew was minimal and aids in retaining good people,” said one captain who now works with a yacht management company. “Well worth the investment.”
Captains should take this issue seriously and “have serious conversations with the owner about” getting insurance premiums reimbursed for the crew under his/her command, Allen said.
“It’s a no-brainer for the owner,” he said. “Tell them to call the legal department of their corporations and they’ll tell them it’s better to reimburse rather than riding them on their corporate policy.”
Anita Warwick, a health insurance broker who specializes in yacht crew policies, agreed that yacht crew should obtain their own health insurance and seek reimbursement from the yacht. Doing so would likely benefit the owner, she said.
“Many crew medical insurance plans are primary – they pay first – to what coverage the boat may have on its P&I and can minimize the vessel’s premiums and large deductibles,” she said. “It can be in the owner’s interest for crew to have their own primary policy.”
Warwick, who was traveling and could not attend The Connection seminar, also advised crew to be aware of their policies and keep in touch with their agents.
“One of the biggest challenges I have found insuring yacht crew is locating them every year to make sure they have received their renewal forms,” she said.
Contact Editor Lucy Chabot Reed at email@example.com.