As if the health care reform law in the United States wasn’t enough for HR/benefits pros to worry about, now new analysis from Mercer concludes that multinational employers will need to keep close watch over international benefits due to health care reform in foreign countries.
This is one of those times when the phrase, “When in Rome … “ is the last thing you probably want to hear.
That said, according to Mercer, multinationals should change the way they supervise private health care provision in light of the reforms taking place across Europe. Global employers may want to establish regional governance and risk management structures, the consulting firm suggests, to ensure compliance with Europe’s complex health care reforms and to mitigate employers’ financial impact — especially for multinationals operating in:
• Austria. Health care reform planning already is underway and expected to continue through 2013, according to Mercer. Key goals of health care reform include focusing on prevention and health promotion, and developing programs for people with chronic diseases and tools to measure the quality of the health system.
• Denmark. Health care is now financed by a combination of national “health taxes,” which are redistributed in terms of block grants to regions and municipalities. The state will fund 80% and the regions 20%. The idea behind the regional co-financing is to create incentives for municipalities to increase preventive services, Mercer concludes.
• France. In January, a new 3.5% tax and an increase on the private health insurance premium tax (now 6.7%) were introduced.
• Germany. In 2010, Germany's cabinet approved a controversial health care reform bill that would raise employer and employee contribution rates as of Jan. 1, allowing insurers to increase employee premiums as needed, Mercer reports. Under the proposal, employers’ contributions would increase to 7.3% and employees’ contributions would increase to 8.2%. This higher rate would be frozen, although health insurers would then be allowed to set additional premiums to cover expenses.
• Ireland. 2011 marked the single biggest price increase in the history of the markets — premiums for employers and individuals using the Voluntary Health Insurance program will rise by up to 45%, Mercer reports. This increase will be passed on in the form of a price increase to subscribers.
• Netherlands. In 2006, the mixed social/private insurance funded model was abolished in favor of a mandatory scheme for all residents. Some reforms to improve the health care system are scheduled to continue into 2012.
• Portugal. Tax deductions for health care costs have been limited, Mercer finds. In addition, the health care system for state employees assumed a complementary role to the National Health Service (NHS). Meantime, the NHS budget decreased by 12%, and 10 separate measures seek to reduce NHS expenses.
• Russia. Prime Minister Vladimir Putin has and pledged to allocate more than $10 billon in the next few years to improve Russian health care, according to Mercer. The government plans to allocate $824 million to health care efficiency and access to medical services, and $4.7 billion to raise salaries of medical personnel, provide patients with medicine and food and purchase diagnostic equipment. These measures will be financed through an increase in the obligatory medical insurance tax paid by companies, which this year will increase from 3.1% to 5.1%.
• United Kingdom. Under reform plans, family doctors would be given much more responsibility for health spending, thus enable the government to cut the cost of administering the health service by eliminating regional administration structures, according to Mercer. Rules capping revenues that public hospitals can earn from private patients also would be scrapped, enabling a more competitive market for private care.
So, what’s a multinational employer to do? Mercer suggests that, in many cases, a regional committee may need to be established, most likely chaired by the regional benefit manager from the largest market and meeting bi-annually. The role of the committee would be to formulate corporate policy on the levels and principles of healthcare provision, establish guidelines for managing costs and ensure local compliance. The actual implementation of the strategy and negotiation with healthcare providers would be handled at a local level.
Sounds even more complicated than PPACA to me, if that’s possible.
What do you think? Are multinationals being “punished” for their globalism, or can this type of increased oversight end up being a good thing for global companies? Share your thoughts in the comments.
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