Medical costs in Ireland rose by 4.2% last year, according to a new report.
Mercer's survey revealed that this was six times higher than the rate of inflation, which stands at 07.%.
The report found that global medical costs are outpacing general inflation by nearly three times.
The top factors behind the increase are heart, dietary and mental health issues.
The study found that organisations are placing an increasing focus on mental wellbeing initiatives and preventative wellness programmes.
Mental health and emotional risks were identified as the second biggest factor influencing the costs of employer-sponsored health schemes in European countries.
The survey also claims all three Irish health insurers have significantly increased their premiums this year.
"The global trend is that medical costs are rising at a much more rapid rate than general inflation, and Ireland is no exception," said Aisling Kelly, a consultant at Mercer Marsh Benefits.
"Increasing costs are feeding through into higher health insurance premiums.
"One approach employers in Ireland are taking to contain costs is to place increased focus on mental wellbeing initiatives and preventative wellness programmes.
"By embedding wellness in the organisational culture, with strong support at all levels, companies can improve their employees’ health, reduce absenteeism through sickness, and help to address the issue of rising premiums."