Despite hike in the health premium costs, over 40% of Indian companies consider health care cover as a value differentiator for employees, and use it in the hiring and retention strategy, a survey said.
"Rising premium costs have not reduced the importance of health care cover as an employment value differentiator, and Indian companies continue to use it as a part of their hiring and retention strategy," Watson Wyatt, a global consultancy firm said in its Health Care Benefits survey.
"Almost 41% of the companies use health care cover as a talent attraction and retention tool, while 11% use it to minimise losses arising out of employee health issues," the survey said.
The survey covered 125 of India's largest employers across industries, mainly from the private sector, reporting an average revenue of more than Rs400 crore.
According to the survey, most of Indian companies providing health care cover to their employees are grappling with an average 10% rise in premiums over the last three years.
"Rising health care costs are making corporates strive to strike the balance between increasing premium costs and their talent management strategies," Watson Wyatt India head of Benefits Practice, Kulin Patel, said.
To achieve this objective, it is crucial that companies constantly review and customise health care plans, Patel said.
"It is vital that employers design appropriate health care plans, employ efficient ways to manage them and ensure that employees understand their value," Patel said.
Corporates are constantly devising different strategies to control health care costs, the survey said.
The survey found that 74% of the companies are stressing on employee education around health care.
Inspite of rising premium costs, economic turbulence and the difficulty in maintaining an affordable health care cover, 58% of the companies surveyed did not deduct any premium costs out of employee salaries, it said.
"Importantly, over 46% of those surveyed did not plan to share the costs with the employees even in the coming year," the survey said.
It revealed that only 17% of the companies cover post retirement medical expenditure.
Post retirement medical benefit is mainly provided by companies in the public sector, while a very small proportion of private sector companies provide such long term benefits.
Commenting on rise in premium, the survey said one of the main reasons for the rise was the advent of sophisticated medical technologies. However, employees seeking excessive care and malpractices like over-recommendation of services are also the contributors, it said.
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