Employers Hold the Key to Financial Well-Being in the Age of COVID-19
We’re dealing with the most significant public health concern of our lifetime which has led to a crisis of confidence about our financial futures. Right now, this is top of mind for everyone—rich or poor, employed or unemployed and at every career stage. As we know, financial stress can take a huge toll on emotional and physical well-being as well as on job performance. Now, financial stress—aggravated by COVID-19—is the leading cause of lost productivity, unplanned absences, low job performance and distractions among workers.
How Employers Can Support Their People
People need support, and given our new landscape, benefits have never been as valuable, and people have never been as engaged and receptive as they are today. Fortunately, employers are uniquely positioned to help them. How? By providing communication, education and holistic wellness programs.
- Communicate frequently, authentically and transparently
Throughout the pandemic, employers have used a variety of media—digital, print and video conferences—to communicate with their employees about protecting themselves and their families, accessing benefits, and taking advantage of critical information as soon as it’s available. And, as boundaries continue to blur between work and home, senior leaders are speaking more authentically and transparently about their own experiences, which has further strengthened the trust employees have in their employers.
- Provide financial education and training
The key to success is tailoring offerings to specific age groups and/or the financial issues faced by individual sectors of their workforce. Consider offering a holistic financial wellness program and know that any program focusing on financial well-being needs to have the right mix of benefits to support employees’ emotional and physical health, alleviate anxiety and drive productivity.
Tackling the Right Mix of Benefits
Today’s workplace is marked with a level of diversity unlike any in history. Right now, there are up to five different generations in an increasingly multicultural workforce, along with corresponding socioeconomic differences and varying ranges of financial literacy.
With so many variables at play, to get a mix of benefits that reflects and addresses this heterogeneity, employers need to consider two key factors:
- A holistic wellness package that includes a mix of high-touch features like access to a financial advisor and low-touch offerings like savings incentives.
- Benefits that are meaningful and smart—not just for now, but over the long-term.
Notable examples that fit both of these criteria are high-deductible health plans (HDHPs) and health savings accounts (HSAs). An HSA is unlike any other savings account because it’s both a spending and savings account.
Accountholders can contribute tax-free1 to their HSAs and use their HSA funds to pay qualified health expenses for themselves and their dependents, now and later—even in retirement. That’s because the account is always theirs. Even if they change employers, retire or find themselves no longer enrolled in a HDHP, account holders can continue to pay for qualified health expenses with the money in their HSA.
How HSAs Can Cushion the Blow During Emergencies
With the national unemployment rate hovering at just over 10%, people at every point along the economic spectrum are struggling to make ends meet.
HSAs can help people manage during unpredictable times because they’re a great place to stash emergency savings. I cannot overemphasize the advantages an HSA brings to the table, particularly in light of what we’ve seen in the past six months.
We don’t know what the future will look like, but we do know that whatever the scenario, it’s essential that people have a range of benefits they understand how to use. In particular, financial benefits that allow them to accrue savings they can access in an emergency and build on for the future. Employers are perfectly positioned to help them achieve both.
1States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. If you have questions about your tax implications, consult your tax advisor.
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