The cost of private health insurance premiums has shown a dramatic increase as companies struggle to cover the rising charges. Insurance broker Lockton issued a caution that the cost of some policies have surged by up to 20% over the preceding 12 months.
The Health Insurance Authority’s statistics from the spring divulged that private health insurance premiums rose by 10 per cent in 2022, or about €500, leading to an average cost of €1,594. The first quarter of 2024 witnessed an escalation in this trend, with an upshot of 13 per cent in comparison to the initial three months of 2023.
Major insurance providers such as Irish Life Health, Laya, and VHI have disclosed additional price rises in 2024. This implies that the expenses incurred by employers to fund some sponsored schemes will have mounted by up to €200,000 in the recent past, according to Dermot Goode from Lockton Insurance Brokers. This can represent a hike of up to 20 percent on an annual basis in certain instances. Lockton further highlighted the potential for more increases within this year.
Goode noted the substantial fiscal predicament for companies eager to maintain this benefit for their workforce but struggling with the escalating charges. He pointed out that these unexpected increases are thrice what most companies had accounted for based on medical inflation.
Around 520,000 individuals are currently having their health insurance costs fully or partially undertaken by their employers, as per Lockton. Given the climbing costs, companies are left with no other option but to seek similar coverage that matches their budgetary constraints, warned the firm.
Despite this, Goode emphasized that the hunt for a lower-priced alternative plan might present challenges. The restricting factors could include existing employment contracts and possible resistance from employees to any decline in employment benefits. Lockton highly recommends expert advice to circumnavigate any common obstacles with adjusting benefits.
The firm also suggested that employers might need to impose financial restrictions on the quantity of coverage provided for employee premiums. It further highlighted the need for employers to negotiate maximum discounts from insurers and enforce defined eligibility rules. Additionally, employers may need to reassess spending on other advantageous schemes if they’re paying twice for initiatives such as health screening or company-sponsored healthcare.
Mr Goode emphasised the burgeoning expenses linked to healthcare and claims, projecting a subsequent surge in private health insurance premiums. He hammered home that companies must prioritise seeking strategies to curb these skyrocketing health insurance costs to ensure they can persist in extending this perk to their employees.