Financial stress isn’t just an economic concern for employees—the strain could extend to overall wellbeing, too. The stressors could in turn have a ripple effect on workplace engagement.
Prudential Financial’s Benefits & Beyond study shows how economic uncertainty, combined with rising medical costs, could add further stress to employees’ general wellness. Sixty-eight percent of employees experienced some sort of financial stress in the last year, with 28% describing the pressure as a “significant or overwhelming concern.”
The stress that comes with finances could impact mental health, as 45% credit financial strains for influencing their mental wellbeing. This was especially true for 50% of Gen Z workers.
Increases in medical costs were cited as a top stressor for employees. Seven in 10 said they experienced at least a 5% rise in medical costs, and 22% saw increases of 15% or higher. These rises “significantly affected” financial stress for 32% of employees, mental health for 22% of workers, and physical health for 22% of individuals.
Prudential’s findings also highlighted how employers could help participants navigate the stress, like by providing employee benefit resources that support holistic wellbeing.
“Rising medical costs are putting pressure on employers and employees alike, intensifying financial stress across the workforce,” said Jon Trevisan, vice president and head of distribution at Prudential Group Insurance. “The most successful organizations will likely take a holistic approach that balances managing costs with delivering meaningful benefits that support overall employee financial health.”
Employers can further support workers by implementing cost containment strategies. Twenty-eight percent of employers are adjusting how they fund medical benefits, while 26% are increasing medical deductibles. Another 24% are offering certain resources to support employees with medical expenses in retirement.
Employees who are adjusting their medical benefits have either moved to a fully insured plan (45%), a self-funding arrangement with stop loss (32%), an individual coverage health reimbursement account (HRA) (23%), a captive plan that is pooled with other employers (20%), or a self-funding arrangement without stop loss (18%).
Employers also said they’re considering adding or removing non-medical resources to offset higher medical expenses, including life insurance benefits, dental insurance, time off, and critical illness insurance, among others, according to Prudential.
“This research points to a critical opportunity for employers,” said Michael Estep, president of Prudential Group Insurance. “Connecting financial, medical and mental health support through clear, ongoing communication and education helps employees better understand their benefits and feel supported when they need it most.”