Small and medium enterprises (SMEs) face higher premiums for providing private medical insurance (PMI) to staff in 2011, according to data released by Mercer.
The data found that, on average, PMI premiums for SMEs have increased by 10% since 2010, while large firms have seen an increase of 4.9%.
SMEs pay an average annual PMI premium per employee of £1,531, up from £1,499 in 2010.
According to Mercer, the increase in PMI premiums for SMEs is driven by a variety of factors, including the increases set by insurers now looking to regain margins that were eroded in the recession, when premiums were dropped in order to retain business.
However, rising costs of healthcare, concern over the impact of NHS reform and an aging workforce are adding to the upwards pressure on the cost of PMI.
Donna Biggs, principal at Mercer, said: “We push our financial advisers for the best deals in our personal life but SME owners seem to largely forget these lessons when assessing PMI for their staff.
“Organisations should look at their broker and challenge it to see if they are capturing the best deals on the market.
“While NHS reform is on hold, the long-term trend is towards increasing expense of private plans, so managing this cost is essential.
“PMI is highly valued by employers and a useful tool in attracting and retaining staff.”
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