Curbing employees’ stress

The dramatic rise in health care and health insurance costs is an ongoing challenge for employers seeking to provide comprehensive and meaningful benefits. According to the Kaiser Family Foundation, employees’ share of premium costs has risen 3 percent but deductibles have shot up by 50 percent since 2009.

In this scheme to keep premiums lower, employees are being asked to self-fund health care costs at unprecedented levels. In too many cases, a key employee benefit has turned into a significant financial burden for many families.

The impact of high deductibles is more critical when the financial health of the American worker is taken into account. According to bankrate.com, three-quarters of workers live paycheck to paycheck and one-third are financially underwater. Most have only $100 or less available to cover an emergency.

While the U.S. economy may have recovered (slowly) since 2008, incomes for workers have remained flat. So it’s no surprise that American workers took on an additional $57.1 billion in credit card debt in 2014, according to CardHub, and that is expected to grow another 5 percent in 2015. Keep in mind that the average balance for households with credit card debt is more than $16,000 at an average rate of 18.9 percent.

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Why should employers care about their employees’ financial circumstances? Because to the extent their workforce is stressed out, the company incurs significant costs from lost productivity, absenteeism and turnover. It’s no surprise that employees suffering from stress get sick more often and are distracted on the job. According to several independent sources, including the Federal Reserve, the cost of stressed workers ranges from $5,000 to $7,000 per worker, per year.

Just as health and wellness programs have gained in popularity as a means to stem the rise in health care costs, companies can now offer a financial-wellness program to combat the costs attributable to employee stress.

For the last six years, Fresh Start, a Dallas-based company, has helped people organize their finances and reduce their debt with an innovative software application and monthly one-on-one coaching. The results have been impressive: Fresh Start clients have saved, on average, more than $50,000 in interest payments and shortened their amount of time in debt by nearly 18 years (www.planafreshstart.com).

Fresh Start was created to help people who were financially devastated by unexpected medical bills. Founder Sam Bernards realized he could help people who found themselves in financial trouble regardless of the reason, including doctors with significant medical school debt.

By offering a financial-wellness program, a company can provide employees a service to solve their pressing money problems, setting them on a path to long-term financial security. By reducing their debt and improving their monthly cash flow, employees are essentially getting a significant raise.

The expense to employers picking up the cost of Fresh Start is under $350 a year per employee; a small investment considering the cost of lost productivity and turnover.

By including a financial-wellness program in their benefits offerings, employers can provide a solution to offset the increasing stress of higher deductibles. For many employees, the impact will be immediate and long lasting. •

Chris Westerkamp is a principal at Noll & Associates Management Services.

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