Wellness Program Effectiveness Improves with Education
Wellness programs in organizations are truly in their infancy. More employers are jumping on the wellness program bandwagon — both health and financial — but there is a gap in employees’ understanding of how they work. If your organization offers a wellness program, that’s a great start. But if wellness program benefits aren’t accompanied by effective employee education efforts, your workforce may not fully appreciate or utilize them. One example of a wellness program benefits that many employees don’t understand – and, don’t use – is health savings accounts (HSAs).
In order to attract and retain talent in today’s tight labor market, employers appear to be ramping up their wellness program offerings, especially in the financial wellness category. According to a recent article in Employee Benefit News (EBN), financial concerns are a big distraction and a chief stressor for workers. Recognizing this, employers have been investing more in wellness program benefits as a way to bolster their employees’ overall well-being.
According to Bank of America’s annual Workplace Benefits Report, cited by EBN, 53% of employers offer a financial wellness program — up from just 24% in 2015. Financial wellness programs are becoming mainstream in many employee benefits lineups, and it’s having a positive impact on employees’ financial lives. Financial wellness program benefits also reduce employees’ stress, which makes them happy and productive at work.
Nonetheless, one wellness program category where both employers and employees struggle is healthcare. Healthcare expenses continue to rise. As such, they are a significant financial strain on employees’ wallets, to the tune of $7,685 per year, according to Bank of America. That’s why a tax-advantaged health savings account (HSA) can be a strong addition to an employee wellness program, both from a health and financial perspective. Again, effective education plays a critical role in getting employees to optimize their use of this wellness program benefit. Employees don’t quite get it. Just 11% of those surveyed were able to correctly identify an HSA’s four basic attributes; only 7% accurately identified features of an HSA.
Offered in tandem with high-deductible health plans (HDHPs) which help to reduce expenses overall for both employers and employees, HSAs also offer a triple tax advantage: contributions go into the account tax-free. The principal and any earnings are also not taxable. And distributions come out tax-free, so long as they’re used for qualified medical or unexpected expenses.
HSAs are a valuable wellness program benefit designed to help employees to cover out-of-pocket medical expenses. That’s important because six out of 10 employees say they’re worried about their ability to pay an unexpected medical bill. HSAs are also a powerful tax-advantaged wellness program benefit to help employees save for retirement — to cover future healthcare costs. However, 40% of employees whose employer offers an HSA don’t use it, mainly because they don’t understand its perks or what it’s for, according to BenefitsPro.
According to Lisa Margeson, head of retirement client experience and communications at Bank of America, who was quoted extensively throughout the EBN article, HSAs are a powerful wellness program benefit that can help employees offset the expense of rising healthcare prices. However, without proper education, HSAs as a wellness program benefit become effectively useless, she opined. “Employees will sometimes skip a medical appointment or go without medication if the cost of these things is too high. If employers aren’t properly educated on healthcare benefits they cannot help their employees become financially-well and it could hurt them in retirement,” EBN noted.
In addition, Ms. Margeson suggests employers focus on educating employees about HSAs as a retirement savings tool as well, by encouraging them to set aside and invest a portion of their savings to cover their healthcare costs in retirement. A financial professional can be particularly beneficial in helping employees use wellness program benefits like HSAs to plan for the future. In fact, that was the number-one thing Bank of America survey respondents said they wanted — help from a qualified financial professional.
The upside of a financial professional is that they can take the conversation beyond wellness program benefits and personalize it for the employee. According to EBN, employees are “looking for that one-on-one contact with someone who has a greater understanding of these industries and can help them come up with actionable and realistic plans for their future.” In addition, Ms. Margeson added, “Financial professionals understand HSAs [as part of a holistic wellness program] and can help communicate the power of them.”
