Expat employee healthcare costs increasing

cost employee health benefits

The cost of providing employee health benefits is rising across Europe, Middle East and Africa.

The cost of providing healthcare benefits to expatriate employees is increasing, according to a new survey.

Mercer Marsh Benefits looked at the costs of providing healthcare benefits for employees in the EMEA (Europe, Middle East and Africa) region. The study found health benefit costs now make up an average 3.6 percent of a firm’s payroll. This has increased from 3.4 percent in the previous year.

There appear to be several reasons for this increase. The main causes cited are, more people using health services, the size of claims are increasing and some medical procedures are becoming more 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.”

Varying costs across countries

He went on to say it was “surprising” that nearly 40 percent of companies don’t have the data to understand and help control their costs. Companies are under pressure to cut costs, while adapting to rapidly changing health and benefit environments.

For example, costs are increasing in Spain, Portugal and the UAE because more people are using the health services. In the UK the cost of claims are getting bigger, which is increasing company costs.

In France, companies said implementing new regulatory demands is driving up costs. Many French firms have been affected by a new law stating they must implement a minimum health benefits scheme if none is currently in place.

The proportion of healthcare benefits which make up a firm’s costs vary between countries, with those in the UAE saying they pay 5.9 percent of their payroll on health care, in Spain it is 4.2 percent, the UK is 3.5 percent while in Germany and Poland it is 2.4 percent. By contrast, in the US, employer-sponsored health benefits make up 13 percent of a company payroll.

Better use of data will help companies manage costs, says Mercer Marsh Benefits, who believe data usage will improve. A lot of new legislation is increasing the obligation of corporate health care provision. This, says the consultancy, will make management of health care costs a priority.