Integrated Absence Management: Reducing Employee Financial Stress

DMEC Staff@Work

Reducing Employee Financial Stress for a Healthier Workforce and Bottom Line

By Eli Oake-Libow

Key Relationship Mgr., Employer Broker Relations
Liberty Mutual Insurance

A recent survey shows that employees spend five to 13 hours per month worrying about their personal finances while at work. For employers, this translates into a nearly $250 billion loss in healthcare, productivity, and lost wages every year.1

Financial stress is at its highest level in five years.2 Exactly what are employees feeling stressed about? While every situation is different, the most common monetary challenges facing employees typically include:

  • Heavy debt
  • Vanishing pensions
  • Retirement savings
  • High student loan debt
  • Increasing healthcare premiums
  • Out-of-pocket health expenses such as deductibles, copays, and coinsurance

Ways Employers Can Help Reduce Employee Stress

Employers can help employees better manage this concern with a mix of financial wellness programs and quality voluntary benefits.

Financial Wellness Programs

Gaining in popularity, financial wellness programs have become a key workplace trend in 2017.3 They can meet the needs of employees by educating them on how to manage and overcome personal finance issues. Some of the more popular financial wellness programs include:

  • Debt management and reduction
  • How to use budgeting tools and resources
  • Investing and financial market basics
  • Asset management and saving for current and future needs such as purchasing a home, financing a child’s college education, or preparing for retirement

The key takeaway for these types of programs is to select the right financial wellness program that addresses the specific needs of your workers and offers them resources they find of value.

Voluntary Benefits

A thoughtful mix of voluntary benefits can help employees better manage unexpected medical costs associated with a critical illness or accident. Voluntary benefit plans are easy to implement and cost-effective for employers as the employee typically selects the plan and pays the premium. Three of the most popular voluntary benefit product offerings are:

  • Accident: Provides a lump-sum for a wide range of covered accidental injuries from simple fractures to third-degree burns
  • Critical illness: Provides a lump-sum benefit if an employee is diagnosed with a covered critical illness
  • Hospital indemnity: Provides a lump-sum when a covered illness or injury results in hospitalization

Key advantages to voluntary benefits, include:

  • Most policies are portable
  • No copays, deductible, or coinsurance
  • Benefits are paid directly to the employee
  • Employer group rates are generally lower than an employee can purchase separately

Employers can provide employees with special financing vehicles that may have tax advantages, including: health flexible spending accounts (FSAs) using pre-tax dollars to pay eligible healthcare expenses, dependent care FSAs for eligible dependent care services, and a health savings account to help employees pay expenses in a high-deductible health plan.

Conclusion

Sixty-two percent of Millennial and 50% of Gen X employees say that their loyalty to their company is influenced by how much the company cares about their financial well-being.2 Employers with the resources to help employees better manage their finances and associated stress can make a positive impact in the workplace that benefits everyone.

References

  1. Mercer Survey. “Inside Employees’ Minds – Financial Wellness, Volume 2.” 2017. Retrieved from https://www.mercer.com/content/dam/mercer/attachments/global/inside-employees-minds/glb-2017-inside-employees-minds-volume-2.pdf
  2. PwC. Employee Financial Wellness Survey. 2017. Retrieved from https://www.pwc.com/us/en/private-company-services/publications/financial-well-being-retirement-survey.html
  3. S Miller. Is 2017 the Year of Employee Financial Wellness Programs? Society for Human Resource Management. Jan. 17, 2017. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/financial-wellness-trend.aspx