Employers ramp up efforts for financial wellness

Employees are increasingly looking to their employers for support in achieving financial wellness. With predictions of a potential recession looming in 2025, concerns about financial stability are rising. A recent report by the American Bankers Association suggests tough times ahead. Still, regardless of economic conditions, employees are keen on improving their financial well-being and expect their employers to play a role in this endeavor. According to the 2024 Wellbeing and Voluntary Benefits Survey by Buck, a Gallagher company, an overwhelming 92% of employees seek enhanced financial well-being resources from their employers. Nearly three-quarters of employers plan to address financial wellbeing this year. Tom Kelly, a voluntary benefit consultant for Gallagher, emphasizes the importance of this initiative, especially if a recession materializes. Kelly recommends employers focus on various benefits to support their employees’ financial health. These include financial coaching, which provides personalized guidance to help employees manage their finances effectively, and credit improvement programs that offer tools and resources to assist employees in improving their credit scores. Additionally, supplemental medical benefits ensure employees can access additional healthcare options beyond standard medical insurance. In a recent video interview, Kelly shared further insights into how HR leaders can use these and other programs to alleviate employees’ financial pressures. By prioritizing financial wellness, HR can significantly positively impact employees’ overall well-being, fostering a more supportive and resilient workforce in the face of economic challenges. One key strategy for maximizing financial benefits in healthcare is utilizing tax-advantaged accounts like flexible spending accounts (FSAs) and health savings accounts (HSAs).

Employers prioritize financial well-being resources

FSAs are flexible and can be used with any health plan, allowing employees to allocate pretax dollars for various out-of-pocket medical expenses. HSAs require a qualified high-deductible health plan (HDHP) but offer tax-free growth and withdrawals for eligible expenses. Effective communication and education about these accounts are vital for employees to leverage their savings potential fully. Alternative funding arrangements, such as health reimbursement accounts (HRAs), level funding, and self-funding, can also offer cost-effective solutions for employers. These strategies can empower employers to manage costs more effectively by taking on greater risk, often securing lower premiums without compromising comprehensive coverage for employees. In a high-interest-rate environment, brokers and advisers should explore the market for better rates on life and disability insurance. Insurance companies often offer lower rates by investing premiums in short-term vehicles like U.S. Treasury bills, which yield higher returns. By shopping around, employer clients can significantly reduce costs while providing essential employee benefits. Balancing health benefits with financial wellness amid budget constraints requires innovative strategies and collaboration. Brokers and advisers play a crucial role in helping employers navigate these complexities. Employers can offer valuable benefits while maintaining financial stability by surveying employee preferences, leveraging tax-qualified accounts, and exploring alternative funding. The goal is clear: to foster a financially fit and literate workforce that feels supported and valued, benefiting both individuals and the organization.