Small firms that offer staff members a medical benefits package could see the cost of providing it rise by 60 per cent in the next five years, new figures show.
The rising costs, rising concerns: Medical inflation report, published by Mercer HR Consulting, reveals that the cost of group medical cover has increased by two-thirds since 1999.
While the average wage has increased by four per cent, the rise in cost of medical cover averages out at six per cent a year.
Steve Clements, a spokesperson for Mercer, said: "If the current rate of inflation continues, we may see medical plans undergoing the same process experienced by pension schemes in the move from defined benefit to defined contribution arrangements."
Firms in the US and UK are starting to look at the viability of personal account-based medical schemes, he added.
Earlier this week, Brendan Barber, general secretary of the Trades Union Congress, stated that salaries should keep pace with the "soaring" cost of living.
