Why You Should Become Familiar with Your Crew Health Insurance

15 September 2023 By Kate Lardy
iStock/SDI Productions

Kate got her start in the yachting industry working as crew. She spent five years cruising the Bahamas, Caribbean, New England, and Central America, then segued that experience into a career in marine journalism, including stints as editor of Dockwalk and ShowBoats International.

It was the chef’s third week on board M/Y Stressed Out and he was feeling insecure. The provisions he had been getting in the islands left a lot to be desired and he didn’t have a good feel for the boss’s tastes yet. The owner was kind of an angsty personality to begin with and was frugal in delivering the compliments the chef lived for.

Now with the yacht back in Florida, he was preparing for a dinner party, and again, nothing seemed to be going his way. As he opened the oven door and saw his soufflé fall, he suddenly felt crushing pain in his chest, like his heart was being squeezed. “Oh my god, it’s a heart attack,” he thought.

The captain drove him to the nearest hospital, where he was quickly admitted. He had begun to feel a bit better by then, but the ER doc wasn’t taking any chances. There was an EKG, then a blood test. The staff kept him there for hours, ran another blood test, then ordered a chest x-ray. In the end, they had some good news — it was not a heart attack.

The bad news came later. The yacht’s group health insurance rejected the entire claim because the chef had been taking medication for high blood pressure — something he hadn’t disclosed on his pre-employment questionnaire, and which showed the incident to be a pre-existing condition.

What would typically happen next in that scenario, says Mark Bononi of MHG Insurance, is the claim would go to the yacht’s protection & indemnity (P&I) insurance. “Well, then it goes back to what did the crewmember say on their employment form when they filled out the medical questions, and unfortunately, same thing, you find a situation where they didn’t disclose it. Now P&I is saying, ‘Sorry, we’re not covering it either.’ And then you have the worst-case scenario.” Our fictitious chef would be on the hook for thousands of dollars.

Bononi, who heads MHG’s yacht division, which provides health insurance to close to 600 yachts, has seen a couple similar scenarios recently where crew did not disclose a condition to their employer or when they applied for insurance, and then were denied when something happened.

Pre-employment medical questionnaires are becoming common nowadays, Bononi says. If the candidate is hired, there might be another questionnaire when applying for insurance. Most yachts have international policies, which cover crew on and off the yacht all around the world. It’s great coverage, but they underwrite people based on their medical history and have pre-existing condition exclusions and waiting periods.

Furthermore, plans have differing definitions of what constitutes a pre-existing condition. “Some plans will say breaking your leg two years ago is a pre-existing condition. Other plans will say it’s not because you haven’t had any treatment for it in the last six months,” Bononi says. “That is part of the reason why crew probably get confused. If they screwed up their knee two years ago, and it’s been fine for the last year, they may think I don’t need to tell anybody about that. Unfortunately, you still do.”

“Now, P&I is saying, ‘Sorry, we’re not covering it either.’ And then you have the worst-case scenario.” Our fictitious chef would be on the hook for thousands of dollars.

For crew with a potentially more serious condition, there’s a chance the boat’s P&I insurance won’t accept the risk, which most likely means the candidate would not be hired. But if P&I did accept it, that insurance would be the back-up if something happened during the health insurance’s waiting period.

Having to pay out of pocket in the U.S. is definitely the worst-case scenario. The country is infamous for having some of the highest medical costs in the world, and on top of that, superyacht-saturated Florida has the highest emergency room visit costs in the country, according to Hospital Pricing Specialists. Their comparison of billing from 4,500 nation-wide hospitals in 2020 showed the average moderate-severity ER visit in Florida costing more than $3,000.

To avoid any sticker shock, Bononi advises crew to become familiar with their insurance, particularly the exclusions (alcohol-related injuries is a common one) and to ask questions — of their insurance agent, of the department head, of the captain. “The more questions you ask the better in terms of protecting yourself as a crewmember. I think a lot of crew, especially new crew, are afraid to do that.”

He doesn’t really expect anyone to read their 40-page policy word for word, but, “All the policies now have short summary documents that show in a few pages what the coverage is. Read the highlights,” he says.

His final advice is: Unless it is an emergency, think before you act. “If your leg is hurting and you need to go to the doctor, make a quick call to the insurance company or agent to find out what the parameters are, [for instance whether you] need to go to a certain place. Reach out instead of just assuming. Take an ounce of prevention to save a pound of pain.”

This article was originally published in the June 2023 issue of Dockwalk.


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