Employee financial stress is a hot topic in benefit discussions and strategic planning. But it can be hard to pin down exactly what constitutes financial stress and how best to relieve it, since it tends to vary across generations and even from employee to employee. Younger employees, for example, may be overloaded with student loan debt, or trying to build a positive credit score to qualify for better interest rates. Employees in mid-career may be worried about providing for their children’s educations and saving for retirement. Further complicating the issue for employers trying to assist employees in a meaningful way is the fact that a new “financial wellness” solution or provider seems to come to market daily.
A relatively simple way to jumpstart or energize a financial wellness strategy is with voluntary benefits. Consider that voluntary benefits typically can be purchased at a reduced group price, which makes them more affordable, and that they can help protect employees from unexpected, significant cost exposure. Here are three increasingly popular types of voluntary benefits that could all lead to less financial stress in your workforce.
Student or Short Term Loans
Forty-five million Americans currently hold $1.6 trillionin student loan debt, and many are struggling with repayment. The burden of student debt is delaying home purchases and other significant investment decisions and even the start of families. Offering student loan refinancing allows employees to consolidate and refinance federal, private, and previously consolidated student loans into a single, lower-interest-rate loan. Employers can choose to contribute to loan repayments, similar to the way they fund HSAs. In addition, employers can offer a short-term loan solution to help employees to pay down existing debt or pay for important, unexpected expenses like car repairs, home improvements, or medical care.
Long Term Care
Approximately 70% of Americans turning age 65 will need long term care services at some point. The combination of an aging population and gaps in employer benefit and social programs drive the need for group long term care solutions. Unfortunately, the group long term care market has been shrinking over the years and guaranteed issue products are no longer available. To help address the growing need and cost of care, we’re seeing more multi-life products entering the market (individual LTC insurance offered to employees and their eligible family members with a premium discount), as well as combined life/LTC products. In addition, employers can help employees navigate the complexities of long term care with solutions focused on care advocacy, care resources, and care planning. Results have shown that education delivered at the worksite has pushed the average buying age from just before retirement (61) down to 43, helping employees lock in lower cost.
Auto / Home
Auto insurance is among the top 3 benefits that employees say reduces their financial stress, according to MetLife. This is supported by the fact that 81% of employee’s view auto coverage as a must-have benefit, and 61% are very interested in purchasing it through their employer. Group discounts, combined with coverage comparisons, can help employees save up to $700 annually.
Ultimately, the key to financial wellness may be found by analyzing unique group demographic attributes to ensure a variety of benefit options are offered to meet the diverse needs of employees -- at each life stage.