Employers Should Offer More Financial Health Support, Study Shows

Nearly one in three employees want their employers to provide increased financial health support, and more demand additional mental health support, said a report by the National Business Group on Health (NBGH) sent to HealthPayerIntelligence.com via email.

The survey of 2,210 employees found that 32 percent said financial health was the one dimension of well-being they wanted their employer to better support. Twenty-seven percent were looking for more mental health support.

“The message from employees to their employers on well-being is loud and clear,” said Brian Marcotte, president and chief executive officer of NBGH.  “Employees are looking to their employer to provide support on all areas of well-being – not just physical health programs focused on losing weight or understanding health risks – but those designed to help employees meet their financial, mental, community and social health goals.”

Employers demonstrate strong awareness of the need to support their employees’ physical and mental health. Over 70 percent of employers invested in their mental and physical health. 

But when questioned on their employers’ investments in their social or community health, employee answers were not as strong. Only around 35 percent said their employers contributed in these respective areas.

It should come as no surprise that employees are looking for greater employer investment in their financial health, given that employees of all ages reported financial health as a significant factor in their overall well-being.

According to a 2017 study by PwC, half of the employees who worry about their financial health miss work occasionally and use at least three hours of work time for addressing their personal financial health concerns. That can cost a large company of 10,000 employees up to $3.3 million dollars in lost productivity and $166,000 due to absenteeism annually.

The NBGH report found that, despite the strong demand for greater financial health support, 61 percent percent of employees reported that their employer already was investing in this area. Employees perceived it as the third largest investment, after mental health and physical health. 

The survey shows that most of the employers’ investments are going into the same two facets of financial health: retirement and health savings accounts.

The top area in which employees sought more assistance was healthcare and prescription costs. Thirty-four percent of the respondents wanted greater employer financial health support in this area—an area which around 70 percent of employers failed to adequately address according to employees.

Furthermore, although housing was one of the top two areas in which employees would like to see more employer involvement, only nine percent of employees said that they received financial health support from their employers to address housing costs.

Additionally, less than thirty percent of employees reported their employers supporting them in any of the following financial health areas: lowering healthcare and prescription costs, child care, budget planning, transportation needs, early access to earned wages, and student loan debt.

Employers need to start providing financial education to their employees, the Society for Human Resource Management (SHRM) urged in 2017.

"If employers don't help their employees to deal with this, no one else will," Meghan Murphy, a director with Fidelity Investments in Boston, told SHRM.

Employers can identify employees who are at risk of rocky financial wellness by checking the frequency and amount of loans and hardship withdrawals from 401(k) accounts.

Employers should then seek to establish a financial wellness plan for their employees—not merely by increasing their “financial literacy” but by providing personalized tools that speak both to employees’ needs both fiscally and emotionally.

"Traditional financial plans are overwhelming in scope and packed with confusing financial jargon," Carla Dearing, chief executive officer of SUM180, said to SHRM. "To prompt behavioral change, financial advice needs to be personalized. An employee should be able to recognize, 'This feels right for me. I can do this.' By giving employees only their few most important next steps, in manageable bites that can be accomplished in a period of months, they are empowered to focus and act."

Some employers have also started offering reduced health insurance premiums for employees’ efforts to achieve financial wellness.

While employers play a key role in ensuring their employees’ financial health, health payers are well-positioned to support employers in addressing these areas of growth.

The health payer industry is acutely aware of the effect that social determinants of health can have on an individual. Whereas these areas of financial support—child care, transportation needs, housing—may be new considerations for many employers, health payers have already fashioned tools to assess these needs. As employers start veering away from health payers and establishing their own health plans, this is an area where payers and employers can potentially collaborate and rebuild trust.