In order to manage the rising cost of health care, a lot of corporates have made changes to plan designs in the last two years. For instance, 60% of the companies say that they will re-evaluate the employee contribution and 55% plan to introduce preventive care going forward.
A report released by Marsh further indicates that, 90% of employers have adopted some form of cost containment measures in their benefits plan. 14% employers are likely to introduce cost containment measures for parental coverage, 11% are likely to re-look at room rent restrictions, whereas 32% have applied co-payment on claims. Marsh conducted this survey across 300 organisations covering 1.5 million people.
“Few corporates have started implementing and tweaking their group health plans for their employees. This not only helps them with a sufficient cover, but also gives them the flexibility to increase or decrease their cover in whichever segment they require,” says Sanjay Kedia of Marsh India.
Faced with rising insurance costs, companies may move away from 'defined benefits' to 'defined contributions'. This will help the company to keep the per person cost constant, while giving the employee the flexibility to select the cover they require.
While now the sum assured is fixed with the company either paying the premium in full or part of the premium, under the flexible scheme the company may pay a certain portion of the premium and allow the employee to fix the sum assured. So, the employee will have to bear the additional premium depending on the cover he or she chooses.
Going ahead it is possible that insurance companies may tailor schemes to offer specific add on covers or meet requirements of companies and employees in case of flexible insurance schemes.
For instance, a younger employee may who travels long distances by two wheeler, may opt for a higher personal accidental cover. While a senior employee may opt for larger cardiac care cover as part of the whole cover. However, this will be after a certain minimum cover is already provided. While this is a common practice in the West, the flexible insurance schemes are yet to become popular in India.
The employer's medical claim cost over life has risen to 92% over the last five years. Key factors that have negatively impacted employers health care costs are medical inflation, room rent, cost variants across geographical locations and other health risks.
Over the years, insurers have increased the percentage of co-pay on claims. Co-pay on claims has increased to 32% in 2012 from 6% in 2009. 36% sponsor parents premium as compared to 40% last year. Hence, due to the rising cost, the number of companies sponsoring parent's premium has been dropping every year.