Picwell Blog

The Link Between Health Care Benefits Plans and Employee Financial Wellness

Nov 18, 2020 11:07:30 AM / by Picwell

As a benefits professional, you probably focus on reducing organizational costs and satisfying employees when you design your benefits packages. You strive to provide a variety of benefits so that all of your team members are healthy and happy. You do this because it’s the right thing to do -- and because a satisfied workforce is an engaged, productive workforce.

But, did you know that the benefits plans your organization offers can have a major impact on your employees’ financial wellness? It’s true, and promoting both health and financial wellness within your organization will not only help you differentiate from the competition, but will also keep your employees happy and focused on their work.

Here’s why that’s so important and what you can do to promote both health and financial wellness within your organization.

What is Employee Financial Wellness?

Before we go any further, let’s first define employee financial wellness. Financial wellness is an overall measure of financial health. In general, an employee is considered financially healthy if they are able to:

  • Pay their bills -- both now and on an ongoing basis
  • Comfortably cover an emergency expense -- like a car repair
  • Work towards their financial goals -- like saving for retirement
  • Feel like they have choices and are optimistic about their future

When employees are financially well, they feel secure. They have a sense of control over the trajectory of their life. Since their basic needs are met without struggle, they experience less stress and their minds are free to focus on higher-level matters, like their work. This means they’ll perform better on the job, which benefits both your organization and their career prospects.

On the other hand, when employees are financially unwell, the reverse is true. They lack security and worry about having their basic needs met. Their minds are preoccupied with their circumstances, and their work may suffer as a result. This level of extreme stress could also cause physical health problems, further impacting their performance. 

One way you can help avoid this situation is to design benefits plans that will positively affect your employees’ financial situation.

How The Benefits Plans You Offer Affect Employees’ Financial Wellness

The benefits your organization offers affects employee financial wellness in many ways. For employees who aren’t benefits professionals, it can be difficult to choose the right plan. They get confused and overwhelmed by complicated terminology and confusing math, often making rash or uninformed decisions. 

When left on their own, many employees will choose an expensive plan with a high premium because they believe it provides the best coverage - after all that’s why it’s so expensive, right?

Wrong. 

More often than not, high premium health plans are not the best fit for most of your employees. So why do they continue to choose these types of plans?

Many times, it’s out of habit. According to an AFLAC study, 92% of employees make no decisions during open enrollment, staying on the same, potentially less-than-ideal plan year after year. Their continued lack of understanding and inaction can unnecessarily cost them some serious money - up to $2,000 annually! - damaging their overall financial wellness.

On the other hand, some of your employees may enroll in a High Deductible Health Plan (HDHP) simply to save on upfront costs. This is also not ideal. If your employees are enrolling in these types of plans in order to save money, it’s highly likely they are already on the financial edge. As a result, they may ignore chronic conditions or nagging health problems because they can’t afford the cost of care. Ultimately, this isn’t good for their personal longevity -- or their wallet. Ignored issues rarely clear up on their own and usually become harder and more expensive to address over time.

If this continues, unfortunately, your employees’ problems will likely become your company’s problems. Poor health and financial wellness can lead to lost productivity and reduced engagement. Dissatisfied or disgruntled employees are likely to leave the organization -- and loudly tell others why, making recruitment difficult and costly. All of this negatively affects company culture and hurts your organization’s bottom line.

How You Can Help Your Employees Improve their Financial Wellness

In order to help your employees avoid the financial pitfalls of bad benefits decisions, you need to provide them with guidance to select the right benefits plans for their personal circumstances. 
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But, how do you support them when you’re short on time -- and they’re resistant to the selection process? 

Here’s how: You make it easy for them to engage and check open enrollment off of their to-do lists. A benefits decision support tool, like Picwell, can help.

Picwell is different from other benefits decision support tools in various ways. First, it is interactive and driven by data. It begins by asking your employees some very easy to answer questions about their health, preferences, and risk tolerance. Then, it crunches the numbers, predicts their risk, and compares that information with the benefits plans your organization offers. Finally, Picwell clearly ranks the plans by fit so your employees can easily choose the best plan for their needs. 

But it doesn’t stop there. If an employee chooses an HSA-eligible plan, Picwell can help your employees determine how much they should contribute in order to cover their projected medical costs for the year. Picwell can also help your employees understand and select any supplemental benefits your organization offers. Not only will your employees benefit from choosing the best plan for their needs, they also no longer have to worry about the costs they may incur when actually using their benefits - it’s a win-win.

Picwell takes the guesswork (and pain!) out of the benefits plan selection process. And when over 60% of workers rank health insurance as a top-three priority when seeking new employment, it’s imperative that you do all you can to help them get their benefits decisions right.

But -- a good benefits decision support solution does more than just provide guidance and peace of mind. It should also save both your employees and your employer money. Luckily, Picwell does both! 

Employees who based their benefits plan choices on Picwell’s suggestions have saved up to $1000 per year. Employers have also seen savings of up to $94 per employee per year after implementing Picwell!

Healthy Employees are Happy Employees

At the end of the day, your employees are counting on you and your organization to provide a robust benefits package that meets their financial needs. Year after year, you try to put together the best packages the company can offer. However, due to the complicated nature of health care benefits (and through no fault of their own) your employees often don’t understand how the right benefits plan can improve their financial wellbeing, and which one to choose. 

Fortunately, a benefits decision support tool, like Picwell, can help employees make a selection that supports both their health and financial wellness. That way, you have a happy, healthy, and engaged workforce who are focused on helping move the organization forward. 

With all of the uncertainty in the world today, keeping your employees both physically and financially healthy should be at the top of your list. Healthy employees are happy employees, and benefits decision support can help them get there. 

Want to learn more about how Picwell can help improve employees’ health and financial wellbeing? Schedule a demo today.

 

Topics: Open Enrollment, Benefits Decision Support, Health Insurance, HR Tech, employee benefits, health savings account, hsa

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Written by Picwell