As more employers consider offering financial wellness programs to employees, they can reframe many types of employee benefits as broader financial wellness help, said Heather Coughlin, the U.S. solution leader for financial wellness at Mercer, in a webcast sponsored by Mercer and hosted by the Society for Human Resource Management (SHRM).
Student loan debt, overall debt, health care costs and retirement savings are just a sample of the financial issues and stresses that employees are dealing with, she noted. “How, outside of defined contribution [DC] plan loans, have employers helped with employee debt and other financial issues?” she asked.
Coughlin pointed to Mercer’s Healthy, Wealthy and Work-Wise study that found 70% of employees say benefits they receive at work help relieve their financial anxiety.
Brian Russell, a principal consultant with Mercer Health & Benefits and the national leader for the Voluntary Benefits Solution Development Center, said employers are leveraging voluntary benefits to address employee financial needs. Voluntary benefits provide an expanded option of low-cost benefits to help employees get where they need to be financially, to help protect them from major cost exposures and keep them from tapping into retirement accounts.
Mercer found 90% of employees consider voluntary benefits to be a part of a comprehensive benefits package. Russell said these benefits can be positioned as financial protection in employee communications and tied to a “peace-of-mind” value.
Examples of voluntary benefits include supplemental health coverage, such as accident insurance, critical illness insurance, and hospital indemnity plans. These help employees mitigate cost exposure. Russell noted that these are excepted benefits from the Affordable Care Act (ACA) and are not tied to a health plan offering. Financial protection may include identity theft protection, disability, long-term care and life insurance. Overall wellbeing benefits may include a student loan refinancing/repayment benefit, auto/home insurance, financial coaching, online discount and purchase programs and legal services.
Russell said there are three fundamentals to a successful benefits strategy:
- Valued services and products—He said the key is to align employers’ benefits offering with the unique fingerprint of their employee base to meet employees where they are and as they move through various stages of life;
- Communications—He said employers should pay attention to digital evolution and distinct preferences of today’s multigenerational workforce for how they want to be educated, leveraging a blend of communication channels in addition to traditional open enrollment booklets, such as emails, texts, websites, etc.;
- Simplified employee experience—He said employees typically only spend 14 minutes on enrolling in benefits, so some may not even see what valuable benefits are being offered, so employers should provide meaningful decision support and a way to take action.
Though voluntary benefits are typically employee-paid, Russell said employers should consider paying for voluntary benefits. He noted that since passage of the Tax Cuts and Jobs Act, nearly 33% of employers plan to redirect tax savings to employee rewards. In addition to one-time bonuses or an increase in DC plan contributions, employers are planning to pay for the cost of additional benefits. Russell said employers can pay for supplemental health coverage, and it only costs about $60 per employee per year for identity theft protection.Coughlin added that financial concerns vary by generation, and employers should ask whether their benefits strategy delivers on those various needs.