Can Cayman residents be covered by US insurer?

| 18/07/2019
Ask Auntie, CNS Local Life, Caymanian status

I’ve just retired and my wife isn’t working. I have permanent residence and my wife is here as my dependent. After being on the SHIC plan through my employer for years and realising it barely covers anything, we were very worried about being able to afford our health insurance in retirement. But we found a fantastic policy through a reputable company in the US which offers exceptional cover, just a $500 annual excess and a zero co-pay. It covers Cayman and worldwide for less money for us as a couple than the SHIC would be for me alone.

We’ve both submitted claims this year and they’ve all been paid in full (none of the usual problems with getting back less than you expected because of the ‘usual and customary charges issue’ and all the other ways Cayman insurers somehow find to pay less than the full claim).

Everything was going well until we learned that it is compulsory for every resident in Cayman to have at least the SHIC policy through an ‘approved local insurer’. Even though our policy has hugely better coverage for a good price, now my wife and I are forced to buy the SHIC at a huge premium. We don’t want it, we don’t need it and we’ll never use it. It’s quite frankly a rip off and a useless insurance.

Now with these extra premiums we have to pay, our insurance cost has tripled and we can’t make ends meet on my pension. It all just makes no sense to burden retired people financially in this way, totally unnecessarily. Is there any way we can get an exemption to this rule if we can demonstrate that our own insurance cover is way in excess of the SHIC, so we don’t have to pay out for something we don’t need?

We’re worried we will lose our permanent residence if we don’t have the SHIC insurance.

Auntie’s answer: I’m afraid I do not have good news for you. The concise answer to your question is no, you cannot rely solely on a US insurer for your health insurance coverage. The reasons are embedded in the Health Insurance Law (2018 Revision), which were explained to me by a Health Insurance Commission official.

As a resident in Cayman, you need to be compliant with that law, and I will set out the relevant bits for you. Section 5(1) says, “Every person resident in the Islands shall… effect a standard health insurance contract in respect of himself and his dependants.” The parts I left out of that section refer to exceptions, such as being insured through your employer, which don’t apply to you.

The law defines a standard health insurance contract (or SHIC) as one “issued by an approved insurer to provide insurance cover in respect of the prescribed health care benefits…”. And, important to your situation, an approved insurer is defined as “an insurer licensed under the Insurance Law, 2010 as a Class ‘A’ insurer and approved by the Commission, under section 4A(3)(a) of this Law, to provide standard health insurance contracts”.

By those definitions, an insurance company, no matter how reputable, operating out of the US and so not approved locally by the HIC does not satisfy the legal requirements for your insurance as a Cayman resident.

There are also logistical reasons why only being insured by a US company would present problems for you. I understand that you have had no issues with making claims for Cayman medical services to your US insurer, which I take to mean that you have paid the full bill up front and then collected the money after filing the claim. And that seems to have worked out fine for you.

However, the situation would be different in an emergency. The HIC official explained that local health care providers are not obliged to accept the benefits provided by the US health insurance policy, and many do not because of the challenges in getting reimbursed (plus the Health Insurance Commission is not able to mediate in that situation since the insurer is not regulated in Cayman).

Therefore, in the case of an emergency, while local hospitals won’t turn you away, without coverage by at least a SHIC plan, you would be responsible for paying the full bill and then filing a claim, as would any visitor to Cayman when faced with similar circumstances. Judging by how you described your financial situation, laying out the funds to cover a hospital stay and waiting for reimbursement from your US insurer may not be feasible.

But regardless of your ability to pay first and then recover the cost of any medical expenses, the HIC official explained, “The Health Insurance Law is very clear; if he is residing in the Cayman Islands he is required to obtain, at a minimum, the SHIC. To do otherwise would be in contravention of the law.”

I also have to admit to being confused as to why you would, unfortunately, have to pay a “huge premium” for SHIC coverage, which normally is pretty cheap (a perfect example of “you get what you pay for”), unless you are dealing with pre-existing conditions. I can see you find yourself in a difficult position and I’m sorry that I can’t be more helpful.

The law mentioned above can be found on the CNS Library

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Category: Ask Auntie, Health Insurance Questions

Comments (26)

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  1. Norman says:

    Does this apply to Caymanians too or just expat residents?
    If expat residents only then the answer is to apply for status.

    • Anonymous says:

      It applies to Caymanians too, but the laws of corruption and incompetence exempt most of them from any enforcement.

  2. Anonymous says:

    I might be wrong but usually insurance is based on residency, so whilst if you hold a US address, and put that on the forms when taking out the insurance, you could be invalidating the cover if you don’t tell them that you have moved your permanent address. Having cover if you still live in the US for most of the year is probably OK, but if you’ve permanently moved you could find you aren’t covered. There are policies out there that would cover you, but as everything, the devil is in the details.

  3. Anonymous says:

    For me this is a simple fix. Get the absolute cheapest local health insurance you can find, and supplement this with proper health insurance coverage out of the US.

    – Maximus

  4. Anonymous says:

    Also, why does the Cayman Islands government continue to allow insurance companies to declare a lifetime maximum benefit on health insurance, where the US has prohibited them? For a child with a serious disease, the impact can potentially be terrible.

    • Anonymous says:

      If it’s gods will… who are we to second guess His decisions? Real Christians, which this island was founded by, believe that God and only God will heal us – we don’t need your fake medicines or unaffordable insurance plans that only make these non-Caymanian invaders rich by stealing our religion and money.

  5. Anonymous says:

    I don’t understand why these individuals need to use local companies. Neither are employed. Both retired. Why can’t they use who they choose? When someone is unemployed usually they don’t have insurance coverage at all.

    Who enforces the unemployed and retired to have insurance at all and who enforces the type of insurance they have.

    • Anonymous says:

      Yes that’s interesting. What is the penalty for refusing to take up the SHIC insurance if you already have a better policy? If the fine is less than the premium then it would make sense to ignore it.
      Although, the person asking is a permanent resident. They will probably be forced to take this insurance so they can be allowed to remain here. Talk about a hidden tax! Retired people need all the help they can get funding their healthcare. Forcing them to pay premiums for the terrible SHIC policy on top of their good insurance is horrible.

    • Anonymous says:

      This is Cayman. Effective and consistent enforcement is non existent.

    • Anonymous says:

      We all pay an indigent fee on our health insurance premiums which covers all of those who get Cinico for “free”.

  6. Anonymous says:

    Okay Cayman, we like to follow what the USA does, so why not do it with mandatory health insurance.
    President Trump made the individual compulsory mandate in the US, go away. People were getting penalized by the IRS for not having health insurance. Then President Trump pushed to remove the penalty and it is now gone.
    Lack of leadership here in Cayman, no moral courage to stand up and do what is right for the country.

  7. Anonymous says:

    Lets keep the health insurance laz-y boys out of the US

  8. Anonymous says:

    Don’t get me started on the Pensions Law!

  9. Anonymous says:

    The insurance cartels have the monopoly and as government continues to get their fat cheques and their cartels make their huge profits, why would they care about you or me?

  10. Say it like it is says:

    I was employed by an international bank which provided it’s own excellent medical insurance scheme.Some years ago the bank was forced to use a local insurance company where the benefits were far more limited. This insurance company along with all the other local insurance companies, courtesy of their government sponsored monopoly now make millions in profits.

  11. Anonymous says:

    Auntie is spot on. Your however free to top up your SHIC plan by purchasing a US expat health insurance plan (available to all those who are non resident in the US) which would in fact cover you for major medical in the US (which is where a SHIC plan falls short).

    • Anonymous says:

      The coverage the original poster has or an expat plan is very appealing to me, and as my local premium coverage has become cost prohibitive, I am considering a SHIC plan and a supplementary insurance, which will become my only insurance when this driftwood finally hits a rising tide.

      So any suggestions (other than don’t let the plane door…) greatly appreciated.

      • Anonymous says:

        Get the absolute minimum cheapest $ local health plan available as an almost throw away and then use the proper US expat plan as your main plan. The cheapest local plans aren’t too bad price wise. You’ll have to sort out issues with having two plans but we’ve never had an issue.

        • Anonymous says:

          Any ideas what IS the cheapest available local policy? We’ve asked for figures from Cinico and two other local insurers and never got any reply.

          • Anonymous says:

            BAF is one of the only ones which offers stand alone policies, I shopped around 2 years ago and they were the best price then. The premiums depend on your age etc and I was paying close to $400KYD per month as a relatively healthy person in their 30s, not cheap by any stretch of the imagination when you look at the benefits (or lack thereof).

  12. Burns says:

    The law defines a standard health insurance contract (or SHIC) as one “issued by an approved insurer [read Government Approved Cartel] to provide insurance cover in respect of the prescribed health care benefits…”. And, important to your situation, an approved insurer is defined as “an insurer licensed under the Insurance Law, 2010 as a Class ‘A’ insurer and approved by the Commission, under section 4A(3)(a) of this Law, to provide standard health insurance contracts”.

  13. Anonymous says:

    And there you have it. Cut off competition, make your service mandatory, and then milk the people for as much as you can get. No wonder the health insurance industry profits are so high, and the cost of living in Cayman, unsustainable.

    • Anonymous says:

      I did see “doctors visit” on the list of why Cayman is the most expensive place, i did not recall seeing Health insurance… Or school fees.

  14. Anonymous says:

    That can’t be right. Who do HIC and local health care providers think they are to dictate people HOW they would pay their bills. The purpose of their existence is to provide medical services.