Expat Health Care Costs Increasing

26 July 2013

The cost of providing employee healthcare benefits for expats working overseas is steadily increasing – and for mixed reasons, according to a new survey.

Mercer Marsh Benefits looked at the costs of providing health-related benefits in Europe, the Middle East and Africa (EMEA) and found costs had risen and now account for an average of 3.6% of a firm’s payroll.

The year previously that figure was 3.4%.

The biggest reasons for costs to increase was that more people were using health services, the size of claims is increasing and some medical procedures are becoming complex and expensive.

David Levey, Mercer’s regional business benefits leader, said: “Companies working in several countries have different social care and health systems so have to tailor the health provision by market.

Health and benefits

“What is a surprise is that nearly 40% of companies do not have the data to help them understand their costs and how to control them.”

He added that firms were coming under increasing pressure to keep their costs low but having to adapt to a quickly changing health and benefits landscape.

For instance, costs are increasing in Spain, Portugal and the UAE because more people are utilising the health service.

In the UK the primary reason for costs increasing is that the size of claims is getting bigger while in France firms are pointing to the cost of implementing new legislative and regulatory demands.

Many French firms have also been particularly annoyed by a demand that they introduce an employee health benefit scheme if they don’t already have one.

The proportion of healthcare benefits on a firm’s costs vary between countries with those in the UAE saying they pay 5.9% of their payroll on healthcare, in Spain it is 4.2%, the UK it is 3.5% while in Germany and Poland it is 2.4%.

Concerns over who pays

In the US, by contrast, it costs 13% of payroll for employer-sponsored healthcare benefits.

Firms in EMEA also offer a variety of healthcare benefits.

Medical insurance is provided by 76% of firms to all employees and their dependents and while most of that is a subsidised health benefit – 26% of firms demand that employees pay for their dependents to be covered under their scheme.

When the survey asked the firms if they were planning to cut the cost of their healthcare benefits provision, only 12% said they had plans to restrict access while 17% said they would cut the range of benefits being offered.

Worryingly for employees, 16% of employers said they were planning for their workers to pay more towards their healthcare cover.

Source: iExpats

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