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The burden of group health insurance on companies is getting heavier.
Costs on this count have increased 20 per cent in 2011 for a majority of the employers, said a survey on employee benefits conducted by Marsh India, an insurance broker and risk advisory firm.
The average policy premium cost per employee has increased to Rs 9,300 in 2011 from Rs 6,800 in 2008-09. In the same period, the average sum assured under the group medical cover offered by companies has come down by 40 per cent — to Rs 300,000 from Rs 500,000 — over the last two years.
The spiralling health insurance costs and high claim ratios have forced a majority of the companies to rework their benefits design plan in the last two years.
According to the survey, two-thirds of the surveyed organisations have already made at least one change to their benefit plan design in the last two years.
Co-payment arrangements which require employees to pay a part of the claim have become common. 33 per cent organisations have applied co-pay on claims as compared to 13 per cent last year.
Parental Cover Shrinks
Other cost containment measures that companies have adopted are capping room rent, making the employee pay a portion of the claim and removing parents' cover. “The parental coverage which was fully funded by 51 per cent of the organisations last year has come down to 40 per cent this year,” said Mr Sanjay Kedia, CEO of Marsh India.
“Companies are realising that it is not sustainable to provide this cover. Going forward, we expect this trend to continue and companies to continue to implement this,” Mr Kedia added.
The survey covered 1,800 employees in 188 large organisations such as Hyundai, Samsung, Wipro, Titan, Kotak Group, and Johnson & Johnson.
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