Guest Blog Post from IDC: The Health/Wealth Connection — Ensuring Employees Are Ready for Whatever Comes Their Way
This blog, authored by Lisa Rowan, VP of Modern HR Strategies at IDC, discusses the concept of resilience and how it has evolved from a focus on physical health, to include other areas of employees’ lives, most notably financial health.
The Health/Wealth Connection — Ensuring Employees Are Ready for Whatever Comes Their Way
Date: December 2022
Guest IDC Blogger: Lisa Rowan, VP Modern HR Strategies
Sponsored By: SAP
Just when life was getting back to normal — or a new definition of normal in the wake of the pandemic — we were all suddenly confronted with high inflation, rising interest rates, and skyrocketing fuel costs. At the same time, many of us have taken a big hit to retirement savings. The economy is teetering on the brink of a potential recession, and the news is full of announcements of high-tech reductions in force.
Throughout the pandemic, everyone was focused on physical health. People naturally withdrew from their normal social circles and postponed travel and family gatherings. Such actions have had a negative effect on mental well-being for many individuals, especially younger people. We have all had to become more resilient to withstand the onslaught of recent change. “Resilience” is a term that IDC has heard a lot since the pandemic. Employers first came to the forefront during this time to support their employees’ resilience by helping them to manage physical health, and they were then quick to follow that up by supporting employees’ emotional health.
The concept of resilience now has grown to include other areas of employees’ lives, most notably financial health. We are facing a potential economic downturn, and there’s an increased awareness of rising health care costs, costs associated with caregiving, paying down student loans, etc. Employee benefits can go far to help workers build financial resilience by enabling them to secure specialized lines of protective coverage and save for the future. Achieving financial well-being has a direct effect on improving mental health as well. All the various facets of wellness are interconnected and essential to the whole person.
Just 22% of people give themselves high scores when it comes to financial wellness, according to the Teachers Insurance and Annuity Association of America (TIAA).
So, what is financial wellness and what can employers do to help their employees better manage their financial health? Financial wellness is a state of well-being whereby employees and their families can manage their bills and expenses, weather unexpected financial emergencies, and plan for long-term goals such as contributing to college funds and saving for retirement.
Key components of financial wellness include:
- Having a budget in place
- Monitoring money to prevent overspending
- Smart investments to help grow funds
- Protecting money through credible institutions and insurance
A specific example where employers have a tremendous opportunity to help employees manage their finances is in health benefit coverage. According to the Kaiser Family Foundation (KFF), about 4 in 10 adults (41%) report having debt due to medical or dental bills including debts owed to credit cards, collections agencies, family and friends, banks, and other lenders to pay for their health care costs. Employers can help here by educating their workforce and offering decision-support tools when it comes to benefits enrollment. They can also help people use things like HSAs and other tax-advantaged programs to better plan for retirement. Employees have many decisions to make, and the goal is to have them make more educated choices about their health care and coverage.
Case in point: By having personal claims data integrated into plan comparison tools as part of the enrollment experience, employees can estimate plan costs based on prior utilization. They also can compare projected out-of-pocket costs across their health plan options, making it easier to select the coverage that best meets their individual health and financial needs. Having a mobile app that allows employees to access their claims data year-round will help them understand their health care usage and proactively evaluate their coverage needs ahead of the next enrollment period.
Bottom line, the only guarantee is that things change. Everyone needs to be resilient to face whatever comes. Wellness is a story not only of physical health but of mental and financial health as well. Together they form a virtuous circle that never ends.
Message from the Sponsor
To learn how SAP U.S. Benefits Administration by Benefitfocus can help you support the health and well-being of your total workforce, visit our website.
Lisa Rowan is Research Vice President for IDC responsible for global research on human capital and talent management software and services. Ms. Rowan provides expert analysis focused on both the business services and software used to address HR and talent-related dimensions. Her research addresses developments in human capital and talent management applications, human resources consulting, and HR outsourcing services.