So currently I believe there is a flat regen of +5 hp per second after a few seconds of not taking any damage…
+5 is not particularly fast and that is why I believe its working ok…
However, I feel shaking up the regen based on Max HP or Size/Speed could allow for some more interesting balancing. Personally, I would like to see larger mercs (Rhino, Fragger and Thunder) regen HP at a much slower rate but start the regen much faster. On the other side I would like smaller/medium mercs to be a little different. Smaller mercs could regen HP much faster but after a longer period of time.
Example…
Proxy has 90hp
Regens at +7hp per second
Regen starts after 6 seconds
Thunder has 160hp
Regens at +3hp per second
Regen starts after 2 seconds
Stoker has 110hp
Regens at 5hp per second
Regen stats after 4 seconds
The idea here would be to basically keep the mediums Mercs around where they are now but change the Heavies and Lights in order to better balance the game AND cater to a Mercs needs.
Right now, Heavy Mercs are VERY strong and due to the universal health regen + long reload times, they are ducking into cover to reload and getting a fair amount of HP up before popping back out. Basically enabling a very strong Merc work quite well solo.
On the other side we have the Light Mercs that are also quite strong but due to their speed more solo characters by design (scouts, run bys) These mercs are less likely to have support from a Medic than a Heavy set Merc would (just look at TF2 when Heavies are on the field and its almost impossible to get a Medic to heal your scout or solly). The speed of lighter Mercs also give them the ability to escape fire and be safe easier than the other builds. So requiring them to do so (not take damage for a long time) but quickly heal once regen starts. You end up with a more duck and dive class.
This should in theory increase the need for Medic support as a heavy class… If they do not run medics you they will be slowly broken down over time as they are unlikely (less likely) to reach full hp solo.
Just an idea anyway,
Have fun with it 
Would like to see medics get some more poweh but without elevating them to rambo status (a big ask).