Companies cut staff medical benefits to reduce costs | mumbai | Hindustan Times
Today in New Delhi, India
Dec 04, 2016-Sunday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Companies cut staff medical benefits to reduce costs

mumbai Updated: Dec 14, 2011 00:49 IST
Prachi Pinglay
Prachi Pinglay
Hindustan Times
Highlight Story

More than 60% of 188 Indian companies, interviewed for a survey, curtailed medical benefits given to employees to reduce the cost of group medical insurance in the past three years. The survey titled 'Employee Benefits Study', carried out by Marsh India, an insurance broker and risk advisor firm, was released on Tuesday.

The 188 companies included large corporations such as Britannia, Ernst & Young, Hyundai, Samsung, Wipro, Titan, KPMG, Kotak Group, Dell and Johnson& Johnson. Together, the 188 companies employ 5.49 lakh employees.

The companies admitted to having reduced medical cover for employees' parents, set limits on hospital room charges and introduced co-payment on claims where the insurer and employee share the medical expense.

The survey indicated that in the next three years employee benefits were likely to be reduced further or offered selectively. “The cost of employee benefits has more than doubled from 2% to 3 % in 2008-2009 to 6% to 7% this year. Health insurance accounts for 90% of this,” said Sanjay Kedia, chief executive officer, Marsh India.

The study also included 1,800 employees, of which 40% said their benefits had been reduced significantly compared to last year. Eighty six per cent said they gave equal importance to medical benefits and salary offered while taking up a new job.

Experts said medical inflation is usually 40% to 50% higher than regular inflation and rising medical costs have led to higher premiums on insurance policies. The study revealed that annual premium went up from Rs 4800 per employee in 2006 to Rs 9300 in 2011.