Employer-sponsored health insurance expenses to rise in 2024

Employer-sponsored health insurance expenses in India are expected to increase from 9.6 per cent in 2023 to 11 per cent in 2024, according to Mercer Marsh Benefits, a division of Marsh McLennan. The primary contributors to medical claims continue to be non-communicable diseases such as cardiovascular disease and cancer.

This isn’t only seen in India, but even globally, the rising cost of medical care is a significant concern, and over half of countries are forecast to see double-digit rate increases on average over 2022, 2023, and 2024 for employer-sponsored health insurance.  

The report collects data from 223 insurers across 58 countries and analyses the key trends shaping the future of employer-provided healthcare globally.

Based on the findings, plan improvements and delivering increasingly sought-after ailment and demography-specific employee health benefits will be the key drivers in cost containment next year, with half (57 per cent) of insurers globally expecting plan improvements to take precedence over cost-cutting measures. 

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On the contrary, proptech unicorn NoBroker claims to have recorded a decline in its insurance expenses. “Our claim-to-premium ratio has declined this year compared to previous years. It is now 75 per cent compared to over 100 per cent in earlier years. So our insurance expenses have decreased,” said Amit Agarwal, co-founder and CEO. This year, the major health claims were from accidents and injuries, genitourinary, respiratory, pregnancy, and digestive issues.

It attributes the decline to two reasons--drop in Covid related claims and its its consistent focus on overall wellness of the employees through health awareness sessions, promoting better work life balance and promoting fitness initiatives.

Transformational solutions

Even the report states that transformational healthcare solutions such as digital outpatient services and virtual tools—including tele/video consultations with doctors, wearable devices, and remote patient monitoring—are contributing to improved accessibility and affordability for both employees and organizations.

“Organisations in India are faced with mounting financial pressures associated with rising premiums. This is necessitating a renewed focus on balancing cost containment in the short term with the provision of high-quality benefits that support the needs of an evolving workforce and aid talent attraction and retention in the longer term,” said Prawal Kalita, Employee Benefits Leader, Marsh India.

In fact, data shows that 50 per cent of insurers surveyed across Asia, including India, are already using these tools to deliver greater programme efficiencies for their clients. Further, 70 per cent of insurers surveyed globally expect the future use of artificial intelligence for first-line diagnosis and/or navigation to have a transformative impact on employer-sponsored healthcare over the next five years.

Given the growing disease burden in the country, another start-up, Simpl, which is a checkout network, has recently increased its health insurance limit from ₹7.5 lakhs to ₹10 lakh annually, reflecting its understanding of the evolving needs and challenges faced by its employees, explained Sneha Arora, CHRO, Simpl.

The research also found that, despite insurers globally extending coverage for under-represented groups, with 31 per cent considering adding diagnosis, learning support, or occupational therapy to support neurodiversity, diversity and inclusion gaps continue to persist in India, especially for benefits relating to mental health, women’s health, and people with disabilities.

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