How Providing Financial Wellness Benefits Can Help Lower Your Health Plan Expenses

why financial wellness is a must have employee benefit

As most human resources professionals know, employer-sponsored health coverage costs are on the rise. According to the Kaiser Family Foundation’s annual survey on employer benefits, 2021 average annual premiums were over $22,200 for families and $7,700 for individuals, marking a  4 percent surge from 2020. And the sharp increase over the past year doesn’t amount to an isolated incident, either – in fact, the average premium for family coverage rose an astounding 22 percent over the last five years. With health insurance premiums climbing, employers may reasonably be wanting to scale back on the provision of certain medical benefits, swapping a few items out for other equally appealing perks.


The Tradeoff Between Medical and Financial Wellness Benefits: 


To deal with rising premiums, employers have a few options: they can (A) narrow the allowances of their health plans to reduce costs, i.e., offer a smaller provider network or require a higher deductible; (B) increase the percentage of the premium that’s paid by the employees themselves; or (C) explore less expensive alternatives to health insurance in the medical benefits space. 


For more information about medical benefits as alternatives to traditional health insurance, check out this blog post. No matter what route an employer takes, in a competitive talent market, they’ll need to balance out a reduction in health benefits with other valuable offerings. 


Enter financial wellness benefits, an item that employees have shown they want and value. A study released by Morgan Stanley and the Financial Health Network found that most employees, (74 percent, to be exact) say they want financial wellness benefits from their employers; 60 percent of employees even said their decision to stay at a job would be easier if their employer offered benefits to help them manage their finances. The study of over 1,000 full-time employees of mid-sized and large U.S. firms indicated that financial wellness programs have been affirmatively shown to “reduce employee stress, improve retention and engagement and help a company stand out in the marketplace.” 


Why Financial Wellness is a Must-Have Employee Benefit: 


According to a study released by Morgan Stanley, finances are the greatest source of stress for employees, with 78 percent of employees reporting that their finances cause them stress that distracts them at work.  50 percent of employees report worrying about credit card balances, 27 percent report student loans to be an issue, 22 percent struggle with outstanding medical bills, and 10% are concerned about the cost of eldercare. 


With these statistics in mind, the addition of financial wellness benefits such as financial planning, eldercare stipends, and student loan repayment plans, in particular, may be worth considering.


The Correlation Between Financial Wellness and Employee Health: 


According to ADP, “when employees experience financial stress, it can negatively affect your business via lost productivity, reduced engagement, and increased health care costs. Workers who can’t adequately save for retirement may stay in the workforce longer, which can limit advancement opportunities for other workers and increase health care costs for businesses.” 


It makes sense that when someone is facing financial struggles, their mental and physical health can decline, too. A 2019 survey by Bankrate survey showed that 78 percent of U.S. adults routinely lose sleep worrying about everyday expenses, retirement savings, and healthcare costs. According to Perdue University, high levels of financial stress often show themselves through physical symptoms such as: 


  • sleep loss
  • anxiety 
  • headaches/migraines
  • compromised immune systems 
  • digestive issues
  • high blood pressure
  • muscle tension 
  • heart arrhythmia 
  • depression 
  • feeling of being overwhelmed


Perdue reports that individuals who carry high levels of financial stress are twice as likely to report poor health overall and are four times more likely to complain of ailments. 


If underlying problems aren’t addressed, this issue can turn into a vicious cycle. Employees with financial stressors may avoid seeking healthcare, leading to worse (and more expensive) health problems later. The result of ignoring the importance of financial wellness for your employees can translate to higher healthcare costs and increased absenteeism in the long run.


How Employers can Help: 


A complete suite of financial wellness benefits may include tools and support to help employees manage their personal finances, make the most of their salary and wages, plan for future goals, and save for retirement. You may be able to contract with a payroll service provider who can also offer a financial wellness program for your employees. (More on that here). 


Some popular financial wellness benefits include: 


  • Retirement planning options with matching
  • Tuition reimbursement or student loan repayment plans
  • Life and disability insurance
  • Emergency savings account funded through payroll deductions
  • Childcare and eldercare stipends
  • Professional development stipends
  • Commuting cost stipends
  • Financial planning
  • Stock options


Need Help Choosing Financial Wellness Benefits for Your Employees? Partner with the Employee Benefits and Wellness Experts at Benely. 


At Benely, we know that employee wellness is about so much more than physical health, it also extends to mental and financial wellbeing, too. You value the overall health of your employees. Benely can help you support them through the creation of a comprehensive employee benefits package and an employee wellness program. 


Benely partners with Wellworks For You, a leading provider of wellness programs that motivate your employees and produce excellent return on investment time and time again. We also offer an extensive Employee Assistance Program (EAP). Our wellness team will set up your company on an Employee Assistance Program to provide full support for the mental wellbeing of your employees. Our EAP Program includes in-person visits with live therapists and counselors, work-life resources, and even legal and financial for employees. 


If your organization could use a hand implementing or revamping your employee wellness program, the employee benefits and wellness experts at Benely have you covered.


Want to learn more? Contact Benely or request a free demo today to get started.