As the days shorten and temperatures drop into the single digits, the thoughts of many Canadians turn to the idea of spending at least some part of the upcoming Canadian winter somewhere much warmer — most often, in one of the southern US states. And, while the less than robust state of the Canadian dollar relative to US currency has required Canadians to downsize some of those plans, it is still the case that thousands of Canadian “snowbirds” fly south during the worst of the Canadian winter.
Wherever they are going, and however long they are staying, it’s safe to say that the thoughts of those snowbirds are on enjoying the warm weather and the sunshine, and that the potential financial consequences or income tax issues raised by their trip down south are not top-of-mind.
Travel Medical Insurance
There is, however, one issue which every single person who travels out of the country — to any jurisdiction, for any length of time — must take care of, and that’s the need to obtain travel medical insurance. There are no circumstances in which it makes sense to leave Canada without such insurance in place.
A lucky few (and increasingly fewer) individual Canadians may already have the needed coverage through their employer or, for retirees, their former employers.
For those who don’t (or those who do but wish to augment such coverage), the solution is to obtain private travel medical insurance coverage. There is no shortage of companies offering such plans and the terms and conditions of different plans vary greatly. Consequently, it’s not really possible to provide one-size-fits-all advice with respect to obtaining such policies, with three exceptions.
First, it is critical to determine the extent of the coverage provided, particularly when it comes to pre-existing medical conditions. Coverage exclusions in travel medical insurance policies almost always relate to conditions which the applicant already has — and, of course, those are the conditions which are most likely to give rise to the need for out-of-country medical treatment.
Second, it’s important to be very clear on the requirements for information — particularly medical history — which must be disclosed as part of the application, in terms of both detail and time period. It was formerly the case that applicants for travel medical insurance were required to provide details of their medical history for the previous 12 or perhaps 24 months. However, those requirements have changed for some policies or some insurers, and it’s sometimes the case that an applicant is required to provide information ranging across his or her entire lifetime medical history. For any kind of insurance, coverage can be denied where the information provided on the application form is not accurate and complete, and insurers have denied coverage where medical history information was omitted, even if that information wasn’t even known to the applicant. In light of that, and given the potentially ruinous financial consequences of a denial of coverage, it’s not at all a bad idea to have an insurance broker or even a lawyer review one’s application for a travel medical insurance policy to make sure that there will be no unpleasant surprises when and if a claim for coverage is made.
Third, anyone applying for travel medical insurance should be clear on whether the issuer of a particular policy will pay out-of-country medical expenses directly, as they are incurred, or will require the insured to make payment upfront, and seek reimbursement after the fact. While the cost of a trip to an emergency department for a few stitches may be within the financial reach of most snowbirds, the cost of medical care for more serious events — like a heart attack or a stroke — can quickly run into the tens or even hundreds of thousands of dollars. Few individuals have the financial means to cover such costs out-of-pocket, even by using available sources of credit.
For snowbirds who are seeking the sun for only a few weeks, obtaining travel medical insurance is likely the biggest item on their to-do list before leaving. For those who are planning extended stays down south for a few months, or even the whole winter, other considerations can come into play.
If you have any questions about these considerations or how traveling South, for the winter, could affect your tax planning strategy, contact us today!
