Employers have shifted rising medical costs to their employees over the past 10 years, and are increasingly reluctant to fund retirement health benefits, Old Mutual’s latest health-care survey finds.
However, the survey also notes that employer attitudes towards HIV/Aids among their workers has improved.
The survey was conducted among 800 employers in the state, semi-state and private sectors, including, for the first time, small and medium enterprises. Together they represent 700 000 members and their dependants.
Old Mutual says that in 1994 the employer contribution to medical aids accounted for between 8% and 11% of the payroll, but now accounts for an average 8,5%.
A decade ago 80% of employers interviewed planned to make changes to schemes in an effort to bring down costs. However, the past 10 years have shown that, “instead of reducing costs, a large proportion of medical expenses have simply been shifted to employees”.
Pat Sidley, communications manager at the Medical Schemes Council, noted that part of the blame lay with employee benefits consultants, a service — ironically — that Old Mutual provides.
“[Consultants] have advised employers to capitalise on tax benefits and cap their liability,” Sidley said this week.
The survey also found 59% of respondents believe medical schemes in their current form will not provide adequate sustainable health care for their members.
There is also an increasing wariness in shouldering the burden of the elderly. In 1995 89% of employers were funding pensioners’ medical benefits. The figure now stands at 43%, with only a quarter of all surveyed organisations saying they are willing to maintain the practice.
Sidley ascribed this partly to a change in accounting practices. In recent years companies have been required to account separately for pensioners’ medical aid liability, making a huge dent in the balance sheet.
Employers now simply offer contracts that do not compel them to cover medical aid in retirement or to cap their contribution.
The survey finds that family size, rather than income, is now the dominant criterion in determining the employer contribution. Sidley said to prevent schemes from excluding potential members on the basis of age or health status, these were the only criteria permitted by the Medical Schemes Act.
The survey emphasises that employers’ response to the Aids epidemic has changed since 1994. Then, 44% of employers had no measures in place to manage the impact of the disease. By 1997 5% of employers actually prevented infected employees from joining medical schemes.
Presently, 36 respondents either offer, or plan to offer, benefits to cover the cost of treatment, while 26 respondents provide access to disease management.
Employers have found employees reluctant to use available programmes because of fear of losing jobs, the stigma attached to HIV/Aids and affordability. An average 15% of the workforce was found to be HIV- infected.
The survey also found that 30% of employers did not believe they should provide anti-retrovirals, while 49% believed they should. Of these, 67% believed this should be done through medical schemes.
Sidley said that the prescribed minimum benefits in the Act demand that schemes should cover the costs of treating opportunistic infections.