Employers in the region are investing more in the health of their employees as many GCC countries have implemented legislation on employee healthcare coverage. However, a substantial proportion still do not fully understand the details of the requirements to comply with the laws, and nearly half (49%) of the respondents do not know how much healthcare costs represent as a share of total employee costs, a study by Towers Watson has shown.
Mr Steve Clements, Director of Health and Group Benefits at Towers Watson, said: “It was concerning to learn that more than a third (37%) of employers in the UAE stated they did not fully understand the requirements of the new legislation, with the figure rising to 44% and 52% in Saudi Arabia and Qatar respectively.”
Moreover, soaring health insurance prices are clearly a concern to employers — almost half expect medical cost inflation will be over 10%, with 15% expecting prices to rise over 20% over the next three years. The average inflation expectations ranged between 11% and 12%. This is more than double the rate of salary inflation and will make health insurance benefits in their current form unsustainable for some companies.
“Our study showed that, in order to keep the benefit affordable, many companies are already turning to strategies such as cutting back on the scope of cover, or cost sharing with employees. The danger is that this will erode the value of the benefit and so others are turning to potentially more sustainable solutions such as flexible benefits programmes or investing in workforce health initiatives,” said Mr Clements.
While the majority of firms (75%) do not have a clear and continuous strategy to improve health and productivity in the workplace, they did offer some individual programmes during 2014. Half of responding organisations indicate they currently do not have a strategy to encourage healthy behaviours, yet almost three-quarters plan to have one over the next three years.
The study also showed that employers consider stress to be the top lifestyle risk factor of the Middle Eastern workforce. Other risk factors highlighted were lack of physical activity, tobacco use, obesity and unhealthy eating habits.
The Towers Watson Middle East Healthcare Survey 2014/15 was fielded towards the end of 2014 in 10 markets in the Middle East: the UAE, Saudi Arabia, Qatar, Oman, Kuwait, Lebanon, Jordan, Egypt, Bahrain and Algeria. It includes responses from 73 participating organisations.