Open enrollment this year runs from November 1 to December 15. HR professionals and senior leadership alike are making important decisions about what health care benefits they can and should be providing next year. And, some are rethinking their approach to health care benefits altogether.
That’s because many are considering adding financial wellness benefits to their overall packages. Financial anxiety is increasingly negatively affecting employee productivity and, more importantly, physical and mental health. Employers are taking a more holistic approach to employee well-being by providing additional resources to employees through their benefits packages, including financial benefits and wellness programs.
Despite concerns about a near-future recession, the labor market continues to tighten. Average monthly job gains of 158,000 this year may be down from last year, but “the pace is still more than enough to keep pace with population growth,” according to Bloomberg. As a result, financial wellness benefits are becoming key differentiators for recruitment and retention.
How bad is the problem of stress–especially financial stress–for employees? For one thing, overall consumer debt reached $13.3 trillion in the last quarter of 2018. There’s a clear link between illness and financial stress, with an estimated 60 percent of illnesses being directly or indirectly caused by financial stress, and 75 percent of doctor’s visits reported as being stress-related. It’s also directly impacting worker productivity, making for a less efficient and more tense office culture across industries and work environments: 21 percent of employees spend five or more hours on personal financial matters each week, and 53 percent of employees report that financial stress interferes with their ability to focus and be productive at work.
More companies and organizations are seeing their employees impacted by the growing crisis around financial stress and, particularly, the student loan debt crisis. As a result, an increasing number of employers are offering financial wellness benefits like higher 401(k) matches so that employees are better equipped to save for retirement; 529 contribution plans that facilitate more savings for a child’s college education; debt counseling and resources for individuals already suffering under the weight of credit card or other debt; and student loan refinancing programs, through which employers make contributions directly toward employees’ student loans.
Currently, 8 percent of employers offer a student loan repayment program as a benefit. And the number will surely rise if Congress passes tax legislation making such contributions tax-free. The “Employer Participation in Repayment Act” would, in fact, expand the existing tax-free assistance program that currently reimburses employees who spend their own money on education, and it is currently working its way through lawmakers in the House and Senate.
While employees may continue to experience stress around work and finances for the foreseeable future, employers have more and more tools to provide relief and ensure employees can be their best selves in the office through financial wellness benefits. Not only will employees benefit from reduced stress, but employers will see employees that are more focused, happier and healthier.
David Chang is CEO Gradifi.
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