Bangalore: Indian companies are increasingly reducing the health insurance benefits of employees because of the increasing cost of medical insurance, reveals 'Employee Benefits Study', by Marsh India, an insurance broker and risk advisor. As per the survey, Indian companies need to focus on the rising costs of health insurance.

The survey has covered 188 organizations, including major industries where the employees’ strength is above 15,000. More than 90 percent of the companies use health benefits as a medium to attract employees and 80 percent of them use this to boost up employees and to maintain loyalty.

According to the survey, it is expected that employee benefits will come down more or will be offered selectively in the next three years. “The cost of employee benefits has more than doubled from 2 percent to 3 percent in 2008-2009 to 6 percent to 7 percent this year. Health insurance accounts for 90 percent of this,” said Sanjay Kedia, Chief Executive Officer, Marsh India, reports Hindustan Times.

Many Indian companies are in the process of implementing new strategies in their health benefit plans which they offer to the employees. About 90 percent of employees have designed some measures to control the expense in their benefit plans compared to 81 percent in the previous year. Employees are asked to share the amount of health insurance which the company offers for parents and spouse. Also the parents’ coverage on health insurance has reduced to 40 percent from 51 percent. "Some of the changes such as co-pay are aimed at having some kind of reasonable behavior among those covered. Or else, there is a tendency to go for the most expensive room at the costliest hospital," reveals Sanjay Dutta, Head of Underwriting and Claims at ICICI Lombard General Insurance to Times of India.

As per the survey, communication gap also exists between the organization and the employees. About 62 percent of the employees responded standard or poor and 76 percent responded as unsatisfactory when it comes to communication with the organization about the benefit plans. Whereas, 70 percent of the organization assumed that communication with the employees are satisfactory.