By Pam Mortenson, Health Advocate Solutions
Part one of this blog focused on the mind-body connection. We shared several ways to create a wellness program that takes a holistic view to improve employees’ health and well-being, rather than a cookie-cutter approach. This includes the mental and emotional components of health, which have the potential to exacerbate chronic conditions including hypertension, stomach ulcers, and migraines.
When it comes to the mind-body connection, mental and emotional stress can sometimes be brought on by financial stress, and with annual salary budgets capped on average at 3 percent a year, employers are looking to help employees more effectively manage their money.
Historically, employers have primarily been involved with employees’ financial futures through retirement programs. The vast majority of retirement accounts have shifted away from defined benefit plans (pensions) to defined contribution accounts (401ks) that require employees to have more knowledge about how to invest.
This has exposed employees to a lot more risk through the ups and downs of the stock market and has caused considerable stress since the Wall Street crash in late 2008. Workers with at least $200,000 saved in 401ks lost an average of 25 percent of the accounts’ value during 2008 (source: EBRI).
Employers are increasingly reaching out to counsel employees on how to prudently choose the best retirement investments for their time horizon and risk tolerance. Retirement counseling services should target all employees, even Millennials, rather than wait until employees are already close to retirement, when their decisions will have little impact on the overall value of their retirement account.
Another factor that has increased employers’ involvement with employees’ finances is the skyrocketing cost of healthcare over the past decade, which has created another source of financial stress. Employers and employees bear the brunt of these increases. Last year the average deductible rose 12 percent to $1478, according to the Kaiser Family Foundation’s 2016 “Employer Health Benefits Survey.” According to a recent claims cost survey by Wells Fargo Insurance, prescription costs are rising by an average of 13.9 percent year over year in 2017, due in large part to higher drug prices and increased use of expensive specialty drugs.
High deductibles, co-insurance, and higher co-pays can all add up to unexpected bills employees are ill prepared to pay. The 2015 Report on the Economic Well-Being of U.S. Households showed that less than half of employees report they can handle an unplanned $400 emergency bill, let alone a $5,000 deductible. Therefore, many employers are starting to expand their well-being programs to offer financial education and resources that can help employees feel more in control of their finances, especially medical bills.
While many companies offer education about health plan options at open enrollment time, a financial well-being program could offer tips throughout the year to help employees better manage healthcare costs.
For instance, some employers are offering programs to help employees lower larger medical bills. These services include specially trained negotiators who work with providers to reduce employees’ uncovered medical bills by leveraging industry pricing data and resolving disputes so providers are paid quickly. By incorporating medical bill negotiation into an overall well-being program, it’s possible to help employees understand the outcome of the negotiation and their total savings versus the initial bill. These types of services can help increase employee productivity by saving time otherwise needed to make multiple calls to insurers and providers. Further, it can reduce the burden on human resources staff who may be peppered with complex questions about health benefits coverage and work costs.
Putting it all together
A truly comprehensive financial well-being program certainly includes broad coverage of retirement and healthcare issues. But cutting-edge employers are also looking for other ways to help employees increase their financial literacy and feeling of stability. These may include services designed to support employees in the following areas:
Many employees live paycheck to paycheck. According to the 2015 Federal Reserve Report on the Economic Well-Being of American Households, adults who could not cover an emergency expense costing $400 would pay it by selling something or borrowing money. Giving employees tools to track and improve their spending habits is one way to help employees rein in money worries.
- Non-retirement savings
Educating employees on the importance of shorter-term savings, as well as retirement savings, can help them avoid a crisis when unplanned expenses emerge. For instance, employers can do more to educate workers on the benefits of Health Savings Accounts to use pre-tax dollars to help manage out of pocket healthcare expenses. If employees have emergency savings, and other ways to handle one-time expenses, they will be more financially secure at every salary level. Financial well-being programs should also offer advice on saving for mid-term goals such as paying for college or a down payment on a house.
- Debt Elimination
Whether it’s credit cards or onerous student loans, employees carry a tremendous amount of debt. Consumer debt now accounts for 24 percent of take home pay for the average worker. This can have a knock-on effect for employees’ ability to contribute to retirement savings, among other financial priorities. The financial component of a well-being program should include debt counseling for those employees who are looking for advice on reducing debt. Such counseling should also include information on building good credit in the future.
Medical Bill Saver service from Health Advocate Solutions provides comprehensive, turnkey communications to educate employees about covered and non-covered services, encourage smart decisions about healthcare, reduce medical claims, lessen the burden on human resources staff, and increase employee productivity.