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Employee health care costs rise across EMEA, Mercer research finds

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The cost of providing health-related benefits for companies in EMEA (Europe, Middle East and Africa) rose by an average of 3.6% in 2012, according to a survey conducted by Mercer Marsh Benefits.

The report found the biggest drivers of cost in 2012 were the increasing utilisation of health services, the growing complexity and expense of medical procedures and the impact of large claims, such as those for cancer treatment.

The EMEA Health Care Survey, solicited responses from more than 500 companies across 16 countries in EMEA, and found cost pressures varied across the surveyed countries.

The rising use of health services was the most commonly cited reason for cost increases by respondents in Spain, Portugal and the United Arab Emirates (UAE).

The majority of UK respondents attributed the cost increase to the impact of large claims.

Companies in France pointed to the impact of regulatory and legislative changes as having the most impact – a new law in France obliges companies to implement a minimum supplementary health scheme if nothing is in place.

The report also found health benefit costs as a percentage of payroll averaged 3.9% in 2011. Respondents in the UAE reported significantly higher average costs (5.9% of payroll), followed by Turkey (4.5%), Spain (4.2%) and the UK (3.5%). France (3.3%) Portugal (2.9%) and Italy (2.8%) reported the next highest cost, but were below the regional average.

Germany and Poland both spent around 2.4% of payroll on health benefits costs. By contrast, in the US, employer-sponsored health benefits account for about 13% of total payroll cost.

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 programmes by market.

Levey added: "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."