Think “financial wellness” programs are being overhyped? Well, the hype might well be merited when you consider that more than twice as many companies are offering workplace financial wellness programs to employees today compared to four years ago.
Bank of America announced findings from its annual 2019 Workplace Benefits Report on Sept. 19, revealing that 53% of companies today offer financial wellness programs today compared to just 24% back in 2015.
However, the report found awareness and understanding of critical health care savings and caregiving support benefits are lacking.
Now in its ninth edition, the report tracks the importance of benefit programs and uncovers an expanded set of opportunities for employers to improve their employees’ financial wellness. Based on a nationwide survey of 996 employers and 804 employees, key findings include:
- Majority of employees feel financially well: 55% of employees today rate their own financial wellness as good or excellent, down from 61% a year ago. Employees who rate their financial wellness positively are more likely to feel that they can effectively manage their day-to-day finances, pay bills while saving for future goals, and that their retirement savings are on track.
- Personal advice continues to be a top priority: Employees rank advice from a professional as their top priority for a financial wellness program, followed by information on financial topics beyond 401k education, and the availability of financial solutions and services to help with their entire financial lives.
- Women lag men in retirement savings: Women have saved far less for retirement, reporting median retirement savings of $30,000, compared to $100,000 for men. This may be contributing to the fact that only 43% of women report feeling financially well, compared to 65% of men.
- Impact of caregiving on the workplace: 45% of employees perform caregiving duties for a family member, a number significantly underestimated by employers. In fact, 62% of caregiver employees don’t believe their employer knows they’re a caregiver. Caregivers report missing an average of 12 hours of work per month due to caregiving responsibilities.
- Caregiving benefit disconnect: While 88% of employers offer some type of caregiving resources, 71% of employees are unaware of these offerings, and just 34% of caregiver employees have taken advantage of employer resources.
“When employees live their best financial lives, it shows in the workplace,” said Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America. “While we should celebrate the increasing prevalence of financial wellness programs, more can be done to drive discussion and engagement about benefits that support employees’ complex financial journeys, including caregiving duties, rising health care costs, and funding longer lives.”
HSA knowledge lacking
Amid growing concerns about health care costs, triple tax-advantaged health savings accounts (HSAs) have emerged as a critical tool in saving for health care costs today and later in life.
Despite their importance, the study found a true understanding of HSA benefits among both employees and employers is lacking. While 57% of employees say they have a good understanding of HSAs, only 11% correctly identified four basic attributes. Similarly, while 65% of employers claim they have a solid understanding of HSAs, a mere 7% accurately identified features of an HSA.
Greater HSA utilization could help employees deal with the significant burden of health care costs. The report cites that health care costs each employee an average of $7,685 annually—costs which only increase in retirement.
A 65-year-old couple, on average, will need $296,000 to cover out-of-pocket health care expenses throughout their retirement; yet, when employees were asked about the core building blocks of financial wellness, managing health care costs ranked last.
Click here for more findings from the Bank of America Workplace Benefits Report, including tips for employers.