Small to medium sized companies are facing higher premiums for providing their staff with private medical insurance in 2011, according to international brokers Mercer. On average, premiums for companies employing up to 200 employees have increased by 10% since 2010. By contrast, large companies in the UK are experiencing increases of 4.9%.
Small businesses are now paying average annual premiums per employee of £1532 compared to £1499 in 2010. Per employee, annual premiums have increased by an average of £78.
Data was analysed from a specialist service from Mercer that enables businesses to provide employee benefits of a standard only usually available to larger companies. The findings on costs were taken from 136 companies renewing their private medical insurance for 2275 employees during the first quarter of 2011.
The increase in premiums is driven by a variety of factors- including the increases set by insurers now looking to regain margins that were eroded in the recession, when premiums were dropped in order to retain business. In the background rising costs of healthcare, concern over the impact of NHS Reform and an aging workforce are adding to the upward pressure on the cost.
Mercer says businesses can mitigate these increases by looking for the best deals on the market.
Medical cost increases have been a feature of the business landscape for several years now as advances in medical research and technology results in development of ever more effective and expensive diagnostic tools and medical procedures. In addition, aging populations and financial uncertainty mean that governments are cutting health-care benefit protection levels in response to shrinking public spending budgets, increasing usage of company plans.
Private medical insurance news: 17 June 2011