The American Dream has always suggested that hard work will earn you enough money to support your family and build a good life. If that’s true, then why are 97% of full-time employees — ostensibly hard-working folks — feeling financial stress?
A 2022 Harris Poll discovered that an astounding 65% of respondents earning an annual salary of less than $50,000 struggle to pay their monthly bills on time; nearly 40% worry about not having adequate emergency funds to cover unplanned expenses such as a health event.
Regardless of whether you realize it, you likely have employees struggling with medical debt. That might not sound like a pressing concern, but the impacts of the resulting financial stress are expansive.
Per KFF, more than 50% of Americans have gone into debt over the past five years due to prohibitive medical or dental bills. Respondents said those bills have forced them to drain their savings accounts (48%) and cut spending on basic necessities (63%). That looming fear of debt has even caused two-thirds of Americans to delay or skip important medical care, and about 15% of people who had medical debt said they were denied care due to unpaid bills.
Unsurprisingly, that financial stress also carries over to the workplace. Per the Harris Poll, nearly 30% of employees say financial stress has affected their capacity to focus; about 25% say it has reduced their on-the-job satisfaction, and 21% say it has hurt their productivity.
It’s not all bad news, though. Workers are optimistic that things will get better, but that doesn’t mean employers are off the hook: 72% of employees expect their employers to help right the ship.
Using Financial Wellness Programs to Reduce Employee Stress
In some ways, it makes a lot of sense that employees expect their employers to address medical debt-related financial stress. After all, employers are Americans’ main source of health insurance. Every year, millions of people sign up for their employer-sponsored group plans so they can access the healthcare they need without having to pay for that care out of pocket.
Yet a quarter of Americans with medical debt owe more than $5,000. With no cash on hand to pay their bills, about 1 in 6 people are forced to put medical bills on high-interest credit cards, triggering a new cycle of debt that’s hard to break.
Medical debt in the U.S. is a widespread problem that will require systemic change, but there are a few ways you can help your employees navigate rising healthcare costs while using financial wellness programs to reduce employee stress.
1. Re-evaluate base salaries.
The most straightforward way to ease employees’ financial stress is to give them more money. If you haven’t recently adjusted wages to reflect the current market, you’re likely overdue.
Inflation is the highest it has been in four decades, which is eroding employees’ salaries. When people have to spend more on necessities like groceries and gas, they have less money left to set aside in emergency funds. According to a CNBC and Momentive survey, two-thirds of workers say their wages haven’t kept up with inflation. Take the time to compare your team members’ salaries to going market rates, and consider bumping them up to account for rising costs and inflation.
If a companywide salary increase simply isn’t an option — and it isn’t for many companies — you can still give your employees access to funds for healthcare through a resource like Paytient. With Paytient, employees can swipe their card when they get care and then pay off the balance via monthly payroll deductions. And when they pay with Paytient, they never have to deal with interest or fees.
2. Educate your employees.
Paying your employees a livable wage is essential, but you know what they say about teaching someone to fish: You’ll feed them for a lifetime. To that end, offer employee education opportunities. You’ll find that people want to learn how to stretch their dollars further, especially as it relates to rising healthcare costs.
Start with a “Health Insurance 101” educational session. The health insurance industry is steeped in confusing jargon that more than half of adults don’t understand. Empower your employees with knowledge by defining terms like out-of-pocket expenses, premiums, and deductibles. Then, provide them with opportunities to apply this newfound knowledge. Perhaps, for example, you could pay for employees to access a financial planning app or website.
You should also make a point to explore any financial wellness benefits built into the health plans you offer. Any high-deductible health plan participants, for example, are eligible to contribute to Health Savings Accounts (HSAs). As with most investment vehicles, there are tips and tricks to making the most of your HSA. Ensure employees have a well-rounded picture of your plans to make the best decisions for themselves and their families.
You can also offer a new benefit like Health Payment Accounts (HPA) through Paytient to give your employees an immediate way to pay for the care they need, whenever they need it. When your team members feel secure knowing they have a safety net in their HPA, they're more likely to go to the doctor, dentist, or other provider for early care— and avoid more costly procedures in the future.
3. Turn a critical eye to your current benefits package.
Ultimately, the insurance plans you offer are meant to serve your employees. Make sure you’re offering plans that actually help improve their financial circumstances and cover their healthcare needs.
That doesn’t necessarily mean offering the same benefits to every employee. Different people have different circumstances and needs. Equity-minded leaders not only recognize this fundamental truth but also allocate resources accordingly. For instance, Bank of America scales its premium contributions with annual salaries, giving larger subsidies to its lower-income employees.
The United States’ medical debt problem isn’t going away anytime soon — or without a prolonged fight. Consider these three tips to ensure your employees can access the care they need without slipping into serious medical debt. And to learn more about how Paytient fits into that equation, click here!