1. www.mercer.com Pan-European Employer Health Benefits Issues 2008 Survey Report Steve Clements, London

2. About the Survey

3. 2 Mercer About the survey  Mercer’s second Pan-European health benefits issues survey  Online survey, May – June 2008  7 languages  Open to employers in 24 countries  Completed surveys were submitted by over 800 employers Distribution of survey respondents across industry and employer size categories* Industry Manufacturing Services Financial services Wholesale/retail Health care Other 36% 24% 12% 11% 6% 12% Employer size Fewer than 250 employees 250-999 employees 1,000-4,999 employees 5,000 or more employees 25% 21% 34% 21%

4. Key Findings Health-related benefits

5. 4 Mercer Percent of respondents rating objective as important/very important Attraction & Retention tops employers list of objectives for providing health benefits

6. 5 Mercer The organization would struggle to retain top employees without offering current benefits, by country Percent of respondents that strongly agree/agree with statement

7. 6 Mercer The organization would struggle to retain top employees without offering current benefits, by country Percent of respondents that strongly agree/agree with statement

8. 7 Mercer Social welfare reforms will increase pressure on employers to provide private health benefits Percent of respondents that strongly agree/agree with statement 15% 31% 24% 44%

9. 8 Mercer Cost of health benefits as a percentage of total payroll cost, by country Ireland Russia Italy France Hungary Finland Netherlands UK Turkey Romania Bulgaria United States All European respondents Czech Republic Norway Poland Germany Sweden Belgium Spain Portugal Eastern Europe 5.1%

10. 9 Mercer Cost is rising fast Change in per-employee cost from 2006 to 2007 All countries Average increase: 5.0% Bulgaria Average increase: 10.6% Cost increased Cost decreased Cost stayed about the same Percentages do not sum to 100 due to rounding Eastern Europe Average increase: 6.9%

11. 10 Mercer Majority of employers expect to take action if cost increases continue at current rate Percent of respondents “very likely” or “likely” to take action

12. 11 Mercer Overall fewer than half of respondents require employees to contribute to cost of benefits Employees do not contribute Employees pay 1 − 10% Employees pay 11 − 30% Employees pay 31 − 50% Employees pay more than 50% All countries Average employee contribution: 13% of total cost Bulgaria Average employee contribution: 9% of total cost Percentages do not sum to 100 due to rounding

13. Key Findings Absence Issues

14. 13 Mercer Concerns for the Board of Directors Percent of respondents that believe their Board of Directors is concerned/very concerned with…

15. 14 Mercer Type of health benefits provided All respondents Bulgaria Eastern Europe Company sick pay71%23%49% Private medical plans65%46% Flexible working57%8%42% Individual health screening54%69%45% Long-term disability income support 51%38%30% Flexible holiday50%23%39% Dental benefits37%23%33% Gym/fitness33%15%38% Employee Assistance Program 29%0%16% Smoking cessation26%15%17% Dietary advice14%0%10%

16. 15 Mercer Average number of days absent due to sickness Percentages do not sum to 100 due to rounding All countriesBulgaria Median days absent : 5 days No specific absence management program : 20% Median days absent : 10 days No specific absence management program : 38%

17. 16 Mercer Leading causes of long-term absences Percent of respondents reporting each condition as among their top three causes

18. Conclusions  Health benefits help attract & retain key staff  Cost and risk is increasing  Welfare reform is shifting cost  Review your healthcare strategy now  Healthy workforce = productive workforce

19. 18 Mercer Insurer/ supplier network Health and absence strategy WELL PERSON  Pre-employment health assessments  Well person screening  Health promotion initiatives  Organisational health policies  Healthy infrastructure ILL PERSON  Absence reporting services  Absence case management  Fast track access to healthcare  Private medical insurance  Independent medical assessments  Primary care services LONG TERM SICK PERSON  Ongoing case management  Independent medical assessments  Long term disability insurance  Vocational rehabilitation services  Long term case review Key messages

20. www.mercer.com Any questions?? steve.clements@mercer.com