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From the Bridge: Captains want insurance to protect owner, crew

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From the Bridge: by Dorie Cox

From broken bones to the flu, yacht crew are subject to a variety of injuries and illnesses that require medical treatment. In a brief survey of captains and crew on the docks during this year’s Fort Lauderdale International Boat Show, almost everyone had experienced a personal or crew member medical incident during his or her career.

The Triton wanted to learn more about how insurance for such events is handled. For this month’s Triton From the Bridge discussion, we gathered a group of yacht captains for lunch on board the M/V Grand Floridian at Bahia Mar Marina during the boat show.

The discussion ranged from medical airlift evacuations to a toe crushed in a hatch cover. And such incidents highlighted the need for some form of insurance. Most of the group said they want personal health, or wellness, insurance, and all want accident insurance coverage for the boat.

“Insurance provides protection for the boss,” one captain said. “That should be considered part of the equation for yacht ownership.”

Attendees of The Triton’s From the Bridge discussion for this issue are, from left, Capt. Les Annan of M/Y Axis, Capt. Spanos Harding of M/Y Julie M, Capt. Daryn Dalton, freelance Capt. Nadine Imfeld, Capt. Guy McClave of M/Y Grey Matters, and Capt. Jacques Falardeau of M/Y Magic Days. Photo by Dorie Cox

Individual comments are not attributed to encourage candid discussion; attending captains are identified in the accompanying photograph.

Several in the group said they push for coverage because they are responsible to both the owner and crew.

“If we are out of the country, I tell all owners we need coverage for crew. You leave yourself open to a huge issue if there is an ICU or helicopter incident,” a captain said. “It could run into the millions.”

Most of the yachts in this group are covered by hull insurance for physical damage to the vessel. And most have protection and indemnity insurance, referred to as P&I, to cover legal liabilities – which may include accident coverage for crew. In these cases, coverage is paid for by the yacht owner or owning company. Costs can be kept down with big deductions for catastrophic issue coverage, a captain said.

That part of the conversation was an easy consensus, but we had come to the table to learn more about personal health care coverage. So the discussion turned to how these coverages are handled and who should pay.

Most of this group said they have some sort of coverage, yet each was a different situation. In several cases, the yacht  owners pay for such coverage for the captain and crew.

“We all have health insurance, but it gets into a gray area,” a captain said. Their coverage is limited and not available for family members because it is specifically for mariners. Nevertheless, he thinks the coverage is important for all the crew on board.

“It’s good to have personal insurance for the crew, especially if they are foreign,” he said.

One of the captains pays for his own insurance, so if he leaves a boat he does not have to change policies. If a yacht uses the same insurance company, the captain’s policy gets added to the crew list.

“My card changes when I change boats,” the captain said. “I took the policy from the last boat under COBRA, which allows me to extend for 18 months.”

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a U.S. law that gives employees the right to pay premiums to keep a group health insurance policy they would otherwise lose when changing jobs.

One yacht owner includes personal health care with a monthly allocation, but does not handle the insurance through the boat. Crew must find and manage their own coverage.

“Some owners say here is, say, $600 a month, you go get your own insurance,” a captain said. “Then I decide my risk level.”

On one of the yachts that pays for crew coverage, an insurance company was chosen that offers an online portal for efficient addition and removal in the case of personnel changes.

“If I hire someone today, I can add them now,” a captain said.

But not all the yachts cover the captain’s and crew’s health policies. In one case, the lack of coverage may originate from the captain’s personal beliefs. “I don’t have it personally, it’s not worth it,” that captain said.

While there’s no wellness coverage on his boat, some of the crew have personal plans, he noted. But he prefers to invest in a medical savings account, a U.S. tax-deferred savings program for individuals to save for their own medical expenses. That type of plan received interest and questions from several captains at the table who had never heard of the option.

The discussion revealed a trend for more interest in insurance coverage with age.

“Most young people don’t think they need it,” a captain said. “They are invincible.”

“When you’re young, you’re bulletproof. Until you’re not,” another captain said.

As they thought back on insurance during their careers, several captains recalled not being covered, especially on  fishing and diving boats. Those with military or commercial work typically had coverage included. Since many of the captains had worked without health insurance coverage in the past, they see more value in having such coverage now. And they see a trend toward more coverage for crew being included in benefits.

“All the young kids should have insurance,” a captain said. “No one should be in the United States without it. If you have one incident, you can end up with long-term effects.”

“I didn’t think I needed insurance; now that I’m older, I definitely do,” a captain said.

Sometimes crew think they have insurance, but they don’t, a captain said.

“But the captain should explain that to each crew,” another captain said.

Several captains had been penalized for not having coverage under the U.S. Affordable Care Act laws.

“I got fined one year for not having it,” one captain said.

Several captains and crew who have personal health insurance policies pay the premiums and then are reimbursed by the yacht owner.

“I use my own insurance and then show the owner my bill,” one of these captains said. When there is an incident, the captain has to pay for deductibles or payments out-of-pocket until he is reimbursed.

Whether insured or not, everyone has to pay for services rendered when away from their home country, a captain said. “If you’re in a foreign port, you need to pay up front.”

This can present challenges for captains or crew unable to pay on demand. And it can be difficult to ask an owner for money in this situation.

“I need the money now, and then tell the boss that he will be reimbursed?” a captain said. “That does not work.”

And if the payment for services is later covered by an insurance plan, the check is sent to the injured or sick person.

“Then what happens is they will reimburse the employee, not the captain or owner,” another captain said. Then the crew is supposed to pay that back, which they may or may not do, he said.

Another option for some is the health care provided in their home country, a captain said.

“Crew from the U.K. can go back there, then the U.K. covers it,” he said.

No one anticipates an industry standard or requirement for yachting to cover personal health insurance in the future, although several said such benefits would be good for everyone.

“An industry standard won’t happen – there are too many nationalities,” a captain said. Differing flag states, governing bodies, legal systems and laws make it challenging to create a single industry standard.

It just comes down to each boat’s owner and policies, a captain said. “It’s case-by-case and boss-by-boss.”

Dorie Cox is editor of The Triton. Captains who make their living running someone else’s yacht are welcome to join in the conversation. Email dorie@the-triton.com for an invitation to our monthly From the Bridge discussion. Comments on this story are welcome below.

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About Dorie Cox

Dorie Cox is editor of The Triton.

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3 thoughts on “From the Bridge: Captains want insurance to protect owner, crew

  1. Steve Green

    Surprised that no mention was made of the Jones Act that covers US crew who are injured aboard documented vessels. If you’re injured, you’re supposed to get “maintenance and cure” until you’re well. I suffered a very serious injury aboard and was fired by the owner as he thought I might sue the boat. I sure did and recovered my medical costs and wages, and the owner had to pay for my lawyer as well. I was not greedy and just wanted my costs covered. Most of us are independent contractors and should carry our own.

  2. Anita Warwick

    I read with interest the captains views on crew health insurance in the December issue [From the Bridge: “Captains want insurance to protect owner, crew”]. Having been airlifted out of the Caribbean to Florida when freelancing on yachts – with no insurance in the United States – I was ineligible for U.S. insurance until I obtained my green card, and at that time international crew insurance was not readily available. Hence my passion in helping crew get good coverage.
    A mistake that U.S. corporations and yacht owners sometimes make is adding marine crew to their U.S. corporate plan. U.S. domestic plans do not cover outside of the U.S. and have no emergency airlift or repatriation (mortal remains.) U.S. corporate plans are not suitable for mariners with an international lifestyle.
    Some vessels have basic crew insurance as part of the vessel’s P&I – protection and indemnity policy. This covers work related injuries and is designed more to protect the owner, not the crew member. When off the vessel, on your own time, you’re in a gray area, and there is no wellness coverage in this case.
    Yes, many crew realize having their own international plan that can be taken from boat to boat is a better option than being on a vessel’s group policy, as continuity is a plus with insurance. You don’t want to stop and start different insurance plans and risk developing a condition that might be considered pre-existing at some point. Ideally you would have your own plan – primary to the vessel’s P&I plan, that the vessel with pay or reimburse you for.
    There are marine crew health insurance plans that allow a member’s dependents to be added to the plan, whether U.S.-based or anywhere in the world. The dependent(s) are not required to spend any time outside of their home country.
    Vessels that require crew members to get their own plan should make sure the plan is primary to the vessel’s P&I. You don’t want the insurer defaulting to the boat’s insurance because they deem it a work related injury. Most of the carriers that have marine specific plans understand this and are primary.
    A word about HSAs – Health Savings Accounts or medical savings accounts. These are a good way to put away some money away before taxes but you must have an HSA eligible health plan. The IRS may came down on you with all its might if you have a health savings account without an eligible health plan. The amount you can put in the account for 2019 for an individual is $3,500 (and an additional catch-up of $1,000 if over 55,) and $7,000 for a family. This money can only be used for eligible medical expenses. Unfortunately the marine plans are not HSA compliant.
    The individual mandate, (the 2.5% tax penalty), has been repealed for 2019, so U.S. taxpayers will no longer be penalized if they have a non-ACA (Affordable Care Act) compliant plan. That being said, ACA plans offer great cover with no medical history asked.
    Brits, Aussies, Canadians and other nationals with socialized healthcare who think they can just go home if something happens – think again. If you’re in that ambulance, they are not taking you to the airport.
    Three other people in that car accident in Jamaica were not airlifted to the U.S. like I was. They died as a result of their injuries. Needless to say I’m pretty passionate about helping people get the right health insurance.

  3. Maria Karlsson

    Starting Jan. 1, the Tax Cuts and Jobs Act of 2017 (TCJA) has eliminated the shared responsibility payment — more commonly known as the individual mandate — that penalizes U.S. tax-paying individuals not covered by a health care plan that provides at least minimum essential coverage, as outlined in the Affordable Care Act of 2010 (ACA). Individuals will no longer be penalized for failing to obtain acceptable health insurance coverage.
    This is great news for the yachting industry since most U.S. domestic policies are not flexible enough for our industry and lifestyle.
    U.S. domestic plans usually don’t cover work-related injuries and accidents on a yacht, nor do they offer in-network benefits outside the area or state in which you sign up, and coverage outside the U.S. is limited to emergency treatment, and if at all while spending extended periods of time abroad.
    Additionally, the U.S. deductibles, co-insurance and annual out-of-pocket max are outrageously high, and the plans are unaffordable, especially for families. The monthly premium is often comparable to a mortgage payment.
    Now, yacht crew can finally enroll into a health care plan that’s suitable for their needs, a policy that covers worldwide, while working onboard, taking courses, on vacation and between jobs. Furthermore, they will most likely have better coverage for lower premium.
    I urge all crew to review their policy wording carefully or ask a licensed insurance professional for assistance.
    Maria Karlsson, president
    Superyacht Insurance Group

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