How to Build Financial Wellness into Your Employee Benefits Package


Posted by: Altura Benefits in Money

financial wellness
Many of your employees are worried about money. As a result, they’re losing sleep, they’re distracted at work, and they may even be looking for a better paying job. You can help your employees by building financial wellness into your employee benefits package.

Money Stress Is Plaguing U.S. Workers

Financial stress can impact many aspects of a person’s life. In a PwC survey, 56% of people said financial stress has negatively impacted their sleep, 55% said it has negatively impacted their mental health, and 44% said it has negatively impacted their physical health.

Financial stress also tends to impact work performance and productivity. A 2022 study from Ceridian found that 82% of North American workers think about their personal finances while they’re at work, which results in productivity losses of approximately $664 billion. The study also found that 61% of workers were more stressed about finances than they had been one year earlier. Likewise, a study from SoFi found that 75% of U.S. workers are under financial stress and 51% feel more stressed about finances than ever before. Each week, workers spend an average of 9.2 working hours dealing with their personal finances.

Financial stress can also drive people to quit jobs they like to search for higher pay. This means that financial stress isn’t just bad for employees – it’s also bad for employers. But your employee benefits package can help.

Offer Financial Benefits

The most obvious way to build financial wellness into your employee benefits package is to offer benefits that directly target financial health.

  • Retirement Benefits – Employers can offer different types of retirement plans, including 401(k)s, IRAs, and pensions. According to the U.S. Department of Labor, there are two main categories of retirement plans: defined benefit plans, which promise a specific monthly benefit at retirement, and defined contribution plans, which promise a specific contribution during working years. Both employers and employees can make contributions – some employers match employee contributions. There are also tax benefits to offering retirement plans – the IRS says employer contributions are tax deductible.
  • Student Loan Repayment Benefits – The Education Data Initiative says 43.6 million borrowers have student loan debt. The average public university student took on $25,969 in debt to obtain a bachelor’s degree. Student loan repayment benefits can help workers manage their loans.
  • Identity Theft Protection – With data breaches exposing consumers’ personal information to scammers, many people are worried about identity theft. Identity theft insurance can protect people from financial loss, whereas identity theft monitoring can help people keep their accounts safe.
  • Financial Coaching and Tools – Some of your workers may be struggling to stick to a budget or balance competing financial goals. A session with a financial advisor or access to budgeting apps and educational resources could help them. Some financial organizations offer online financial courses that you can make available for team members. Examples include YourMoneyLine and Ramsey Smart Dollar Wellness (Please note that we do not endorse these resources in any way.)

Offer Benefits to Help Employees Prepare for Financial Hardship

According to CNBC, 53% of Americans say they don’t have any emergency savings. Workers who are surviving paycheck to paycheck may worry about how financial hardship could set them back. However, employers can help workers prepare – and give them peace of mind – by offering the right employee benefits.

  • HSA – Some of your workers may prefer to enroll in high-deductible health plans because these plans tend to have lower premiums. However, if these individuals or their families have unexpected medical costs, they’ll have to pay a large deductible out of pocket. A health savings account (HSA) can help workers set money aside in case they have unexpected health costs. If they don’t use the funds for health expenses, they keep the money in their HSA to grow tax free.
  • Critical Illness Insurance – If your workers don’t have or don’t qualify for HSAs or if they just want a different way to save up for unexpected healthcare costs, critical illness insurance is an option. If the policyholder experiences a covered illness, the policy pays a lump sum that helps cover lost wages and other costs.
  • Life Insurance – Many of your employees likely have dependents, including young children, spouses, and aging parents. Life insurance can provide them with peace of mind that their loved ones will be taken care of financially should the worst happen.
  • Disability Insurance – People often assume they’ll be able to keep working until they reach retirement age, but illnesses and injuries can force them to stop working. Short-term disability insurance covers temporary disabilities that last for less than a year. Long-term disability insurance has longer benefit periods and can cover more serious disabilities.

Help Employees Make the Most of Their Benefits

What if you’re already offering all these benefits but your employees are still struggling financially? Apart from increasing their salaries – something that might not be feasible – you may be wondering if there’s anything you can do.
The answer is to provide education to help employees make the most of their benefits.

  • Define Insurance Terms. Let’s say one of your health plan options is a high-deductible health plan but some of your employees don’t know what a deductible is. If they enroll in this plan, they may regret the decision. Help your employees by providing clear definitions of common insurance terms, such as deductible, copay, and network.
  • Explain the Benefits You’re Offering. Employees who don’t understand their benefit options may enroll in plans that don’t fit their needs. Plus, they may leave benefits on the table because they don’t know what these benefits are or how to use them. Help your employees by providing bite-sized pieces of information explaining the benefits you offer. For example, if you have more than one health plan option, break down the key differences and the pros and cons of each. If you offer voluntary benefits, explain what they do and how they provide value.
  • Educate Employees on How to Compare Costs. Healthcare costs are a major expense for many families. Some people overpay because they don’t know how to shop around for the best prices on prescription drugs and medical procedures. You can help your workers save money by showing them how to be smart comparison shoppers.

Do You Need Help Managing Benefits?

Financial wellness is important for your employees – but it’s only one thing you need to keep in mind. In addition to focusing on ways to help your employees thrive, you need to think about your company’s bottom line while complying with federal and state regulations. Altura Benefits can help by providing benefit options that meet the needs of your company and employees. We also offer HR support and technology, compliance assistance, and payroll consulting. Learn more.