Companies looking to restructure health insurance as costs rise

NEW DEHI: Amid rising healthcare expenses, many companies worldwide are looking to restructure medical insurance plans offered to their employees, says a survey.

As part of revamping medical insurance, many entities are increasingly asking their employees to make contribution towards the policies.

According to a study by insurance broker and risk advisor Marsh India, the average policy premium cost per employee has increased from Rs 6,800 in 2008/09 to Rs 9,300 in 2011.

The survey, covering 1,800 employees in 188 organisations, found that 42 per cent of employers saw an average of 20 per cent increase in the medical insurance premium as compared to 2008/09.

Besides, 92 per cent employers surveyed want to align their benefits to the market as compared to 58 per cent in 2008/09.

Almost two-thirds of surveyed organisations have already made at least one change to their benefit plan design in the last two years by requiring employees to make a greater contribution to the company benefits scheme.

"Plan design changes provide immediate respite from premium increase but it is not a sustainable strategy. Understanding the underlying cost drivers and adopting appropriate measures such as employee engagement and wellness initiatives will result in greater long-term suitability," Marsh India CEO Sanjay Kedia said.

The study highlighted the need to improve employee communication and engagement with 62 per cent of employees describing communication by their employers as either "average" or "inadequate," while 76 per cent of employees stated they have little or insufficient knowledge about their benefit plans.

However, 70 per cent of the employers surveyed believed that their existing communication efforts were clear and comprehensive.

Employers are beginning to respond to key health concerns with emphasis on wellness initiatives to help their employees improve their overall health and increasing medical costs. Nearly 83 per cent of respondent said that the use of wellness programs is a highly important benefits strategy to their organisation.