Guess What’s Taking a Toll on Financial Wellness?
Employers are taking steps to improve the financial well-being of their workforces — but there’s evidence that some of their efforts could actually be creating more financial stress for workers.A new report f
rom the nonpartisan Employee Benefit Research Institute (EBRI) notes that move toward consumer-driven health plans (CDHPs) and high-deductible health plans (HDHPs) may be causing financial stress for the same workers that employers are targeting with financial wellness programs.
The report explains that there is evidence that higher health care costs cause many workers to report signs of financial struggles. Of the workers reporting cost increases in their health care plans in the past year, a quarter (26%) state that they have decreased their contributions to retirement plans, and more than 4 in 10 (43%) have decreased their contributions to other savings. Moreover, 27% have delayed retirement, and 15% have taken a loan or withdrawal from a retirement plan.
Additionally, according to the report:
28% have had difficulty paying for basic necessities such as food, heat and housing
36% have had difficulty paying other bills
30% have used up all or most of their savings
34% have increased their credit card debt
22% have borrowed money
27% have delayed retirement
19% have dropped other insurance benefits
15% have taken a loan or withdrawal from a 401(k) or IRA
13% have purchased additional insurance to help with expenses
Ironically, the report notes that employers offer financial wellness programs for a number of reasons, including to address concerns that financial stress may be reducing employee productivity and engagement, and to reduce overall use of health care services and spending due to financial stress.
In short, the report notes that employers’ movement toward CDHPs and HDHPs as part of a larger goal of increasing consumer engagement through health care plan design might be making it more difficult for financial wellness programs to succeed.