Workers are increasingly turning to their employers for aid in achieving financial well-being. As fears of a possible recession in 2025 grow, worries regarding financial security are becoming more pronounced. A recent analysis from the American Bankers Association indicates challenging times are forthcoming. Nevertheless, despite the economic climate, employees are eager to enhance their financial health and anticipate their employers to contribute to this effort.
The 2024 Wellbeing and Voluntary Benefits Survey conducted by Buck, a part of Gallagher, reveals that an astounding 92% of employees are seeking improved financial well-being resources from their organizations. Almost 75% of employers intend to prioritize financial well-being initiatives this year. Tom Kelly, a consultant at Gallagher focusing on voluntary benefits, highlights the significance of this initiative, particularly if a recession occurs.
Kelly advises that employers should concentrate on various benefits designed to bolster their workers’ financial health. These options encompass financial coaching, which delivers tailored assistance to aid employees in effectively managing their financial situations, and credit enhancement programs that provide tools and resources to help improve employees’ credit ratings. Furthermore, supplementary medical benefits guarantee that employees have access to extra healthcare choices beyond regular insurance plans.
In a recent video discussion, Kelly elaborated on how human resources leaders can implement these programs to mitigate employees’ financial strains. By emphasizing financial wellness, HR can profoundly enhance employees’ overall health and create a more supportive and resilient workforce, especially during challenging economic periods. A crucial approach to optimizing financial benefits in healthcare involves using tax-advantaged accounts like flexible spending accounts (FSAs) and health savings accounts (HSAs).
Employers emphasize resources for financial well-being
FSAs are versatile and can be applied with any health coverage, enabling employees to allocate pretax funds for various medical expenses incurred out-of-pocket. HSAs necessitate a qualifying high-deductible health plan (HDHP), but they offer tax-free growth and withdrawals for appropriate expenses.
Effective communication and education surrounding these accounts are crucial for employees to maximize their savings opportunities. Alternative funding methods, such as health reimbursement arrangements (HRAs), level funding, and self-funding, can also provide cost-effective options for employers. These strategies can empower employers to manage expenses more efficiently by accepting greater risk, often resulting in reduced premiums without sacrificing comprehensive coverage for their employees.
In an environment of high-interest rates, brokers and advisors should investigate the market for better pricing on life and disability coverage. Insurance firms frequently offer lower premiums by investing in short-term options like U.S. Treasury bills, which yield higher returns. By seeking out better rates, employer clients can significantly cut costs while still offering essential benefits to their workforce.
Finding the right balance between health benefits and financial wellness amidst budget limitations requires creative strategies and collaboration. Brokers and advisors are instrumental in guiding employers through these complexities. Employers can provide valuable benefits while ensuring fiscal responsibility by assessing employee preferences, utilizing tax-advantaged accounts, and considering alternative funding models.
The objective is evident: to cultivate a financially knowledgeable and stable workforce that feels supported and appreciated, resulting in advantages for both individuals and the organization.
