Expat Healthcare Costs
New research suggests that the cost of private health insurance for expatriates may have risen by an average of 3.6% last year as a result in an increase in the numbers of people who are making claims.
The EMEA Health Care Survey, which examined the cost of private expatriate medical coverage from 500 organizations across 16 different countries in Europe, the Middle East and Africa, found that more and more expatriates are making claims on their health insurance and that this has directly contributed to an increase in the price of premiums.
The study, which was completed by Mercer, found that the cost drivers that contribute to health insurance premiums within various countries around the world were different between countries, with expats in Britain making larger claims, while those in Spain, Portugal and the UAE were making claims more frequently. The research also revealed that the highest average healthcare costs as a percentage of payroll were in the UAE (5.9%), followed by Turkey (4.5%), Spain (4.2%) and the UK (3.5%). Outside of EMEA, employer-sponsored health benefits account for about 13% of total payroll cost.
Discussing the survey results, David Levey, the regional business leader for Mercer Marsh Benefits, said: “Companies across EMEA are under pressure to keep costs low but they are also responding to a rapidly changing health and benefits landscape.
“Companies that operate across multiple countries with different health and social care systems and different workforce demographics have to tailor their programs by market.
“What is surprising to us is that, despite all this, nearly four out of 10 companies lack the data needed to provide them with an understanding of what is driving their costs and how they can control them.”
The survey also sought employers’ opinions on the expat healthcare costs associated with recruiting expatriate workers. Of those organizations surveyed, few claimed that they would stop providing healthcare as a benefit to their expatriate employees (just 12%), but 17% did say that they had plans to reduce benefits packages and 16% revealed that they may ask the employees to contribute toward their own private health coverage in the future.
In an attempt to control expenditure on health care claims, 40% of employers have introduced education and training in the form of wellness programs. However, some employers did express concerns that reducing benefits may serve to put employees off relocating overseas. Discussing this, Levey said: “Organizations are caught between two stools. They need to keep medical benefit costs low, but care costs are rising and many are worried that if their package is uncompetitive, employees will opt to go elsewhere.
“One of the problems is monitoring expat healthcare costs and features provided by cover across different locations. Organizations cannot buy a one-size-suits-all package but have to tailor their package to each expat in each location.”