UAE. The latest Towers Watson survey on Health Benefits reveals that employers are investing more in the health of their employees as many Gulf Co-operation Council (GCC) countries have implemented new legislation and amendments to laws that deal with mandates for employee healthcare coverage.
These changes are already in effect or will come into effect in phases over the next few years and will implicitly impact employers.
However, while this new legislation is being implemented, which will potentially increase costs for some employers, the study revealed that a substantial proportion of employers still do not fully understand the details of the compliance requirements, and nearly half (49%) of the respondents do not know how much healthcare costs represent as a share of total employee costs.
Steve Clements, Director 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”, added Clements.
By focusing on prevention rather than treatment, employers can not only control healthcare costs, but they can also increase employee productivity. From the point of view of the employee, the development of health and wellness programmes supports their sense of wellbeing and engagement with their employer.
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 programs 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.
This suggests that, going forward, organisations in the region are realising the value they can reap from a healthy workforce and consequently understand the role of health and wellness strategies in their employee value proposition.
The study also revealed 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 problems associated with most of these risk factors are well documented, but stress is potentially a hidden issue of the region”, commented Steve Clements.
“Until now stress has not been widely acknowledged as a serious issue for employers. This may be partly because employees are reluctant to formally report feeling under pressure, and also partly because stress is rarely in itself categorised as a cause of medical claims. However, some of the most prevalent claims, such as cardiovascular disease and musculoskeletal conditions, can be caused by, or exacerbated by, stress”.
The top factors causing stress in the workplace were considered to be the erosion of work/life balance, especially with technologies that require employees to be available after working hours, together with unclear or conflicting job expectations and inadequate staffing.
“A robust Healthcare and wellbeing strategy should be high priority for any organisation, and this study confirms that many employers are now starting to embrace this approach. The emergence of stress as a serious health risk factor further reinforces that a holistic approach is needed that goes beyond targeting physical conditions to embrace broader wellbeing issues. This can be a real win-win opportunity for employers and employees alike”, Steve Clements added.
Towers Watson fielded the Middle East Healthcare Survey towards the end of 2014 in an attempt to better understand how the recent changes in healthcare legislation can be expected to affect employers and their health related benefits trends in this region.
The findings of the survey were officially launched at the Global Health and Group Benefits Launch Event which took place recently in Dubai. .
Photo Caption: Steve Clements, Director Health and Group Benefits at Towers Watson
About the Survey
The Towers Watson Middle East Healthcare Survey 2014/15 was fielded towards the end of 2014 in 10 markets in the Middle East; including United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, Lebanon, Jordan, Egypt, Bahrain and Algeria. It includes responses from 73 participating organisations. The participants represent a wide range of industries and geographic regions. For more about the survey, click here.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 15,000 associates around the world, the company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management.
Learn more at towerswatson.com.
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