Great article from our partner, United Benefit Advisors (UBA) by Danielle Capilla
On February 23, 2017, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) released its Insurance Standards Bulletin Series, in which it re-extended its transitional policy for non-grandfathered coverage in the small group and individual health insurance markets.
States may permit issuers that have renewed policies under the transitional policy continually since 2014 to renew such coverage for a policy year starting on or before October 1, 2018; however, any policies renewed under this transitional policy must not extend past December 31, 2018.
If permitted by applicable state authorities, health insurance issuers may choose to continue certain coverage that would otherwise be cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage.
As background, CMS’ transitional policy was first announced in November 14, 2013; CMS had most recently extended the transitional policy on February 29, 2016, for an additional year for policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017.
Policies subject to the transitional relief are not considered to be out of compliance with the ACA’s single risk pool requirement or the following Public Health Service Act (PHS Act) provisions:
However, issuers can choose to adopt some of or all these provisions in their renewed policies.
Practically speaking, grandmothering provides some small employers the option to maintain a pre-ACA health plan. Although not every state allows grandmothering of policies and not all insurance carriers offer the option in those states endorsing it, there are still some employers in the 35 states that allow grandmothering who are able to be composite rated (rates based on the health status of the group), which protects young, healthy groups in particular. Grandmothered groups with older, unhealthy populations could still move to community-rated ACA- compliant plans, which were generally less costly for them, giving all groups the flexibility to save money. The UBA Health Plan Survey finds that though this grandmothered group is shrinking (8.1% of all plans compared to 17% in 2015), these employers have helped to keep overall average increases in check. In fact, premium renewal rates (the comparison of similar plan rates year over year) have increased an average of 5.9% for all plans—up only slightly from last year’s 5.6% increase. Small groups who found temporary protection this year through grandmothering and the PACE Act (depending on their state) were a significant factor in overall cost mitigation.
See the original article Here.
Capilla D. (2017 March 21). CMS allows states to extend life of “grandmothered” or transitional health insurance policies[Web blog post]. Retrieved from address http://blog.ubabenefits.com/cms-allows-states-to-extend-life-of-grandmothered-or-transitional-health-insurance-policies
Check out the top trends that employees are looking for in an employer wellness programs by Page Elliott.
With open enrollment in the rearview mirror, many benefits professionals have been able to see which new wellness benefits have been a hit and which have been a miss. Increasingly, employees expect the benefits on offer to go beyond physical health and exercise and extend into a broader concept of wellness.
Meeting this appetite can benefit employers significantly — research has shown happier employees are considerably more productive.
The industry has answered the call in recent years and employers and brokers are bringing more and more benefits to the table that offer employees tools to better navigate their lives domestically, at work and in general.
Here are the top seven benefits to consider for upcoming enrollment periods that help look after employees personal well-being beyond the purely physical.
There are a multitude of reasons why employees often require costly legal representation: divorce, financial woes, neighborly disputes, property transactions, estate planning, etc. For most employees the costs and time required to attend to these issues are financially and emotionally draining.
The added stress created can cause a substantial loss in productivity in the workplace. As such, legal protection benefits are increasingly seen as an important step to keep a company’s workforce well and thriving.
According to a 2016 survey by Willis Towers Watson, 59 percent of employers now offer legal plans as a voluntary benefit.
According to a study by Northwestern Mutual, some 58 percent of Americans believe their financial planning needs improvement and money remains the leading cause of stress in America today.
Offering financial coaching can be a bedrock voluntary benefit for employers given that it is central to protecting employees from falling into the kind of dire straits where other benefits like legal protection need to be used.
Financial coaching can help employees with everything from building a monthly budget that gets them back in the black, to planning their college fund or retirement saving more carefully. Financial coaching as an employee benefit can help employees thrive instead of just survive.
Identity theft is fast becoming the third certainty in life — according to the Bureau of Justice Statistics, nearly 18 million people fell victim to identity theft in 2014 (that’s seven percent of U.S. adults in just one year).
Identity theft leads to financial and healthcare fraud that can be a crippling mess for victims to unravel and take many years (and many work hours!). The emotional effects of identity theft are well documented and easy to understand: anger, frustration and feelings of violation and vulnerability and the corresponding impact on wellness are clear.
Identity theft remediation and monitoring services can provide employees with critical resources to handle the frustrating complexities of rectifying fraud conducted using their own identities.
While a healthy chunk of all our paychecks goes towards paying for our health care insurance and services — a fiendishly complex and constantly evolving ecosystem — many Americans don’t understand the most basic terms.
Health advocacy has been a growing voluntary benefit over the last few years because it can help employees navigate a complex and exhausting system, offering both administrative and even clinical support. Health advocacy can reduce employee anxiety, improve overall wellness through better heath decisions and also help consumers get a better financial deal from their health care choices.
Research indicates that meditation has substantial benefits in terms of encouraging better attention, memory and emotional intelligence (and who couldn’t use some more of each on a daily basis?)
Mindfulness has been a top topic for HR pros for a long time, and many have made big strides in incorporating this concept into corporate culture. This has included encouraging employees to try extra-curricular relaxation techniques like yoga and meditation.
Some companies have gone as far as offering apps like Headspace to employees as a voluntary benefit at low or no cost.
The prevailing wisdom relating to employees’ personal problems has always been stay well out of it. However, more and more companies are seeing the upside of providing assistance to employees without getting directly involved in their personal lives.
One increasingly popular method for helping people manage the conflicts that exist in their lives outside of the office is to offer relationship counseling. While this remains a rarity on most voluntary benefits portals, expect to see this popping up more and more in subsequent open enrollment periods.
According to a survey by Care.com, over 70 percent of employees say the cost of childcare impacts their career decisions. Not wildly surprising given that nearly a third of families pay in excess of $20,000 per annum for child care — a figure that represents a shockingly high portion of the average U.S. household income of around $52,000.
Related: Are you ready for the millennial baby boom?
Offering dependent care deduction has been a popular benefit for a number of years and more and more parents are taking this up as part of their flex spending arrangements. Assistance can go beyond the tax break though and a growing number of companies are offering services that can make managing child care vastly easier, including child care resource and referral services that can help with back-up arrangements when daycare centers are closed.
Elliott P. (2017 March 21). 7 wellness benefits to maintain employees’ zen[Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/21/7-wellness-benefits-to-maintain-employees-zen?kw=7+wellness+benefits+to+maintain+employees%27+zen&et=editorial&bu=BenefitsPRO&cn=20170326&src=EMC-Email_editorial&pt=Benefits+Weekend+PRO&page_all=1
Good things come to those who wait…. except when understanding your benefits. The sooner employees become educated on why they have unique benefits, the sooner they will put them to use!
“Those who don’t understand benefits, don’t utilize them correctly. They are not good consumers of health care.” – Scott Smeaton, Hierl Executive Vice President.
It is important to understand your employee benefits not only for your own health reasons, but also so that you are able to recognize why your employer offers the unique benefits they do.
What differentiates Hierl and how they help effectively communicate benefits?
At Hierl, we look at each client as unique. What works best for one may not be ideal for another. It’s about really being able to understand the culture and provide different communication options such as presentations, visuals, emails, and website.
Hierl shines when it comes to giving employers/employees access to all forms of communication, specifically in the communication campaigns run throughout the year. By assessing the necessary points to communicate and then building quarterly and monthly campaigns around these objectives, Hierl brings unique, strategic solutions to explaining employee benefits. The evidence of communication strategies at work is apparent in the results gathered from clients.
“One of the ways companies can measure the success of their program is to measure employee satisfaction. By measuring employee satisfaction after communication campaigns, findings show that the more regularly benefits are communicated, the higher employee satisfaction goes up!” – Scott Smeaton
3 Key Points on Communicating Benefits
To download the full article click Here.
Did you know that your emotional and physical well-being can take a hit when you are under financial stress? Here is an interesting article from Employee Benefits Advisors about the correlation between financial stress and mental and physical health by Amanda Eisenberg.
Americans aren’t able to save for their financial goals, and that stress is affecting their emotional and physical well-being.
A new study by Guardian Life Insurance found that financial outlook is the most significant driver of working Americans’ overall well-being, constituting 40% of the insurance company’s Workforce Well-Being Index, and money is cited as the No. 1 source of stress for a majority of workers.
“Even among people working full-time with benefits, many still do not have access to adequate insurance coverage or retirement plans,” says Dave Mahder, vice president and chief marketing officer of Guardian’s Group and Worksite Markets business. “And few take advantage of the health and wellness programs available through their employers, which often contain a much broader menu of resources than workers realize.”
Millennials are one of the subsets of employees who do participate in benefits that can help alleviate financial stress, the survey found.
“Millennials want marketing to them,” says Gene Lanzoni, assistant vice president of thought leadership for Guardian Life. “It’s not enough these days to say, “This is someone like you,” to do with your benefit selection. That’s what the challenge is for millennials. It’s not enough of an engaging process for them.”
Half of millennials surveyed in Guardian Life’s “Fourth Annual Guardian Workplace Benefits Study” said they don’t have disability insurance, while a third have yet to sign up for a retirement plan.
They are not the only group of employees struggling to purchase voluntary benefits like disability and life insurance; single working parents are also feeling the heat.
One in three single working parents does not have a retirement plan, compared to 20% of the 1,439 workers surveyed. Similarly, one in four workers doesn’t have life insurance, and one in three workers doesn’t have disability insurance, according to the survey.
“Many of those working parents are struggling to balance work and personal life, and they may not be able to afford some of the protection products,” says Lanzoni. “Some of that discretionary income might not go toward paying a voluntary disability plan.”
To offset expenses, Americans are increasingly turning to debt, whether through loans or credit cards, to temporarily relieve their financial burdens.
Four in 10 Americans have car loans, 32% of workers are carrying a mortgage, 17% have student loans and 12% have home improvement debt, according to the study. Overall, 75% of Americans are carrying debt.
Non-mortgage debt — particularly auto and education loans — contributes to lower financial wellness; those carrying the most total debt, including mortgages and rent, report considerably lower overall well-being, according to Guardian Life’s report.
Employers can also help alleviate the burden by providing education to employees, among other services, says Lanzoni.
The survey found that employer-sponsored voluntary insurance products and college tuition or loan repayment programs help with financial wellness, as well as employee assistance programs that can identify financial, emotional and physical issues that lead to stress.
Eisenberg A. (2017 March 13). Financial stress hurts emotional, physical well-being of workers [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/financial-stress-hurts-emotional-physical-well-being-of-workers?feed=00000152-1387-d1cc-a5fa-7fffaf8f0000
Great article from SHRM about the importance of educating your employees about their social security by Irene Saccoccio.
Social Security is with you throughout life’s journey, and we want to put your employees in control of their finances and future. With the tax filing deadline quickly approaching, everyone needs to make sure all their ducks are in a row before they file. Do your employees know that Social Security benefits may be taxable?
It’s true. About forty percent of people receiving Social Security benefits must pay taxes on some of these benefits, depending on the amount of their taxable income for the year. This includes all monthly retirement, survivor, and disability benefits. This may happen if your employees have other significant income in addition to their Social Security benefits.
The good news is that it’s easy to find out whether they must pay taxes on their benefits. All your employees need to look at their Social Security Benefit Statement (Form SSA-1099/1042S). An SSA-1099 is a tax form Social Security mails each year in January to people who receive Social Security benefits. It shows the total amount of benefits they received from Social Security in the previous year so they know how much Social Security income to report to IRS on their tax returns.
Your employees should automatically receive this form. If they don’t receive their Benefit Statement or misplaced it, no need to worry. A replacement SSA-1099 or SSA-1042S is typically available for the previous tax year after February 1. Even better news, Social Security has made requesting or replacing an annual Benefit Statement even easier. Now everyone has the ability to download it anytime and anywhere by using our online services.
Your employees can go to our my Social Security page, and select “Sign In or Create an Account.” Once they are logged in, they should select the “Replacement Documents” tab to obtain a replacement 1099 or 1042S benefit statement. Your employees can also use their personal my Social Security account to keep track of their earnings each year, manage their benefits, and more.
Your employees can also obtain a replacement benefit statement by calling us at 1-800-772-1213 (TTY 1-800-325-0778), or contacting their local Social Security Office. People living outside of the United States, need to contact their nearest U.S. Embassy or Consulate.
Handling tax season is all about what you know. Encourage your employees not to wait. They should open a personal my Social Security account today. In addition to getting a SSA-1099 or 1042S, there are many other tools like their Social Security Statement or benefit verification letter that can help them today. Just another way in which Social Security helps them secure today and tomorrow.
Saccoccio I. (2017 March 24). What your employees should know about social security benefits and taxes [Web blog post]. Retrieved from address https://blog.shrm.org/blog/what-your-employees-should-know-about-social-security-benefits-and-taxes
With the fall of the AHCA find out what is next for employers in terms of healthcare from the great article at HR Morning by Christian Schappel.
The Republican’s best attempt to repeal the Affordable Care Act (ACA) to date has been axed. Where does that leave employers, and what can they expect next?
For starters, it leaves employers with the ACA and everything that comes with it … the employer mandate … the reporting requirements … the whole enchilada.
In other words, any organizations that relaxed their ACA compliance efforts — believing the Republican’s American Health Care Act would repeal and replace Obamacare — could be exposing themselves to non-compliance penalties.
The more complicated question is: What happens next?
With this appearing to be the GOP’s best shot at repealing and replacing Obamacare (or at least parts of it) in one stroke, and the party failing to push its legislation through Congress, President Trump and House Speaker Paul Ryan (R-WI) appear resigned to the fact that the ACA will remain in place indefinitely.
“We’re going to be living with Obamacare for the foreseeable future,” Ryan said after announcing the GOP bill would not be voted on in the House.
Trump has even indicated that after this loss for the GOP, he wants the party to focus on other issues, like tax reform.
But that doesn’t mean health reform will be on the back burner.
It now appears that Republicans’ best course of action to implement reform changes would be to attempt to “fix” parts of the ACA that are deemed to not be working. And it could do that by including small healthcare provisions in other pieces of legislation, like future tax reform bills.
Trump and his fellow Republicans could also seek to offer concessions to Democrats in future legislation as a means to get members of the left to agree to include certain provisions of the American Health Care Act in future bills.
Example, Republicans are still expected to push hard for a rollback of the ACA’s expansion of Medicaid, and members of the GOP could seek to include rollback provisions in future tax reform legislation in exchange for proposing a tax reform plan Democrats would find more palatable.
So why did the American Health Care Act fail, despite Republicans controlling the House, Senate and White House?
The answer starts with the fact that the GOP didn’t have the 60 seats in the Senate to avoid a filibuster by the Democrats. In other words, despite being the majority party, it didn’t have enough votes to pass a broad ACA repeal bill outright.
As a result, Senate Republicans had to use a process known as reconciliation to attempt to reshape the ACA. Reconciliation is a process that allows for the passage of budget bills with 51 votes instead of 60. So the GOP could vote on budgetary pieces of the health law, without giving the Democrats a chance to filibuster.
The problem for Republicans was reconciliation severely limited the extent to which they could reshape the law — and it’s a big reason the why American Health Care Act looked, at least to some, like “Obamacare Lite.”
Ultimately, what caused Trump and Ryan to decide to pull the bill before the House had a chance to vote on it was that so many House Republicans voiced displeasure with the bill and said they wouldn’t vote for it.
Specifically, here are some of what conservatives didn’t like about the American Health Care Act:
Schappel C. (2017 March 29). ACA repeal bill nixed: what’s next for healthcare reform, employers? [Web blog post]. Retrieved from address http://www.hrmorning.com/aca-repeal-bill-nixed-whats-next-for-healthcare-reform/
Do you need help boosting involvement in your retirement program? Take a look at this great article from Benefits Pro about how digital media can be the perfect vehicle for increase enrollment in your retirement program by Marlene Satter.
Retirement plan providers need a new approach—literally—when it comes to engaging millennials: going digital.
According to a blog post from Corporate Insight, millennials use, or seek to use, technology and mobile platforms to manage as many aspects of their lives as possible. But when it comes to retirement plans, many can’t.
While millennials are not only much more likely to value mobile access to their 401(k)s than their parents are, plan providers haven’t been as enthusiastic.
A Corporate Insight survey found that 57 percent of millennials consider the ability to manage their retirement plan account via a mobile app “very important” or “extremely important,” versus just 26 percent of baby boomers, but only 10 of the 19 leading retirement plan providers Corporate Insight tracks offer any kind of transaction capabilities via their iPhone apps.q
And that, considering millennials’ preferences, is a failure.
Although it’s considerably better than it was only four years ago, when only two out of 17 firms provided such service, the post says, “the industry has yet to reach the standard set by other financial industry verticals, like banking and brokerage, where mobile transaction functionality is the new normal.”
It’s true that many retirement plan providers have recently introduced mobile apps, but those apps have only limited capabilities compared with the functionalities millennials are looking for.
Then there’s the little matter of advice and education. Thanks to the Great Recession, millennials have a low risk tolerance and tend to stick to very conservative investments.
In addition, they “highly value advice and are not receiving enough of it,” the post says. With millennials the most likely of all generations to seek some degree of professional advice, at 89 percent compared with 78 percent of boomers, only 58 percent say they have been offered this assistance.
Of course, even among those offered advice, just 59 percent have actually taken advantage of it—possibly because they perceive it as expensive and don’t realize that the plan sponsor may be footing the bill instead of the employee.
Better communicating the menu of options available to employees could correct misperceptions, as well as alert employees unaware of the option to its availability.
Millennials are also more open to managed accounts, and those who have them are likely to say they’re satisfied or very satisfied with them.
Fintech firms offering low-cost robo options could boost the participation of young people in their retirement accounts, and as a means of customization they could be key to improving the results of defined contribution retirement accounts in helping employees prepare for retirement.
Satter M. (2017 March 24). Digital approach to millennials can boost retirement savings participation [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/24/digital-approach-to-millennials-can-boost-retireme?ref=hp-news
Great article from our partner, United Benefit Advisors (UBA) by Tara Marshall
I’ve looked at clouds from both sides now
From up and down and still somehow
It’s cloud illusions I recall
I really don’t know clouds at all
— Joni Mitchell, “Both Sides, Now”
And like that song from 1969, it appears that most employees really don’t know cloud computing at all. In an article on the Society for Human Resource Management’s website titled, “Public Enemy No. 1 for Employers? Careless Cloud Users, Study Says,” a North American IT solutions and managed services provider called Softchoice found that 1 in 3 users of cloud-based apps (e.g., Google Docs and Dropbox) download the app without letting their IT department know. Cloud computing became popular a few years ago because people could store all their documents, photos, and other information and then access that data from anywhere at any time and on any device.
What makes this such a bad situation is not the cloud computing itself, but that the vast majority of employees lack any sense of cybersecurity. That same study found that 1 in 5 employees:
Complicating this further is that the employees who actually do use passwords usually have weak passwords. That is, they are easy to guess (e.g., “1234,” “password,” or their username). Rather than leave a company and its network vulnerable to attack, some IT people suggest a ban on cloud accounts for work.
Security breaches involving a company’s intellectual property can be very costly. Sometimes referred to as “ransomware,” the important data of an organization will either be stolen or encrypted and will not be released until a fee is paid.
A better solution to a ban on cloud accounts would be to educate employees on the necessity for cyber security, train them to improve their online security habits, and remind them that IT rules are in place to make a company more secure, not make it more difficult for employees to be productive. Cyber thieves are clever and when they can’t break into a system using technology, they often rely on the flaws of human nature.
As we become more and more connected to the Internet, we leave ourselves and the companies where we work more accessible to cyber threats. It’s imperative that employees keep everything locked down.
Marshall T. (2017 March 14). Workplace cybersecurity begins with employees [Web blog post]. Retrieved from address http://blog.ubabenefits.com/workplace-cybersecurity-begins-with-employees
Make sure to stay up-to-date with the most recent changes to the ACA, thanks to our partners at United Benefit Advisors (UBA).
In March, the employee benefits world watched as the House Speaker unveiled a proposal to replace parts of the Patient Protection and Affordable Care Act (ACA) with the American Health Care Act (AHCA). The AHCA bill was withdrawn from consideration by the full House on March 24 because it appeared that there would not be enough votes to pass the AHCA.
On March 13, 2017, the U.S. Senate approved Seema Verma as the new administrator of the Centers for Medicare & Medicaid Services (CMS), which spends more than a $1 trillion annually on health care programs.
The IRS updated its Q&As to address whether family members of an employee who declines employer-sponsored coverage would be eligible for a premium tax credit for Marketplace coverage. The IRS updated its Publication 969 regarding health savings accounts and other tax-favored health plans. The IRS released its Information Letter regarding the treatment of cafeteria plan forfeitures. The Department of Labor (DOL) released an advisory opinion on whether an association’s administrative services program was an ERISA employee welfare benefit plan or a multiple employer welfare arrangement (MEWA).
UBA released one new resource in March: Important News Regarding the Employer-Tax Exclusion for Health Insurance
UBA updated existing guidance:
IRS Updates Guidance on Premium Tax Credit Eligibility When Employer-Sponsored Health Plan Coverage is Offered to an Employee’s Spouse and Children
The IRS updated its Questions and Answers on the Premium Tax Credit. Specifically, Q&A 15 addresses a situation in which an employer offers minimum value, affordable coverage to an employee, the employee’s spouse, and the employee’s children. The plan only allows the spouse and dependent to enroll if the employee enrolls. The employee declines to enroll.
The IRS determined that all three family members are not eligible for a premium tax credit for Marketplace coverage because they could have enrolled in the employer-sponsored coverage through the employee’s coverage and the coverage would have been minimum value and affordable.
IRS Updates Its Publication 969
The Internal Revenue Service (IRS) updated its Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans for use in preparing 2016 tax returns. The publication describes HSAs, MSAs, FSAs, and HRAs, including eligibility requirements, contribution limits, and distribution information.
IRS Releases Information Letter
IRS released Information Letter Number 2016-0077, in which it explains how an employer may dispose of a flexible benefit plan’s unused funds when an employer ceases business operations and terminates a plan and when a participant forfeits funds to an ongoing plan.
The plan documents will determine how an employer may dispose of unused funds when a cafeteria plan terminates. Unused funds will not revert to the U.S. Treasury.
The IRS explained that the Internal Revenue Code (IRC) Section 125 rules apply to funds forfeited by a participant in an ongoing plan. Per IRC Section 125, the participants’ forfeited funds may be:
Finally, the IRS explained that when an employee terminates employment, IRC Section 125 prohibits the plan from reimbursing health care expenses incurred after the employee terminates employment and no longer participates in the plan.
DOL Issues Advisory Opinion
On January 13, 2017, the Department of Labor (DOL) issued Advisory Opinion 2017-01A. The DOL determined that an association’s administrative services program for its members’ employee benefits plan is not an ERISA employee welfare benefit plan and not a multiple employer welfare arrangement (MEWA).
As background, the association is comprised of large employers that sponsor self-insured benefit plans through administrative services only (ASO) agreements with insurance companies. The association has a member-owned and member-funded cooperative that analyzes health care spending, utilization, and outcomes; however, the association does not and will not provide insurance services to its members; determine benefit levels, administer plans, benefits, or claims; facilitate payment of ASO fees to insurers; or file or process claims.
The DOL determined that the program is not an ERISA employee welfare benefit plan because it has no employee participants and it does not offer or provide benefits to employees or their dependents.
The DOL determined that the program is not a MEWA because it is not an arrangement established or maintained to provide welfare benefits to employees of two or more employers. Further, the DOL determined that the program does not operate as a MEWA because no component of the program underwrites or guarantees welfare benefits, provides welfare benefits through group insurance contracts covering more than one employer, pools welfare benefit risk among participating employers, or provides similar insurance or risk spreading functions.
Question of the Month
Q. What obligations does an employer have when it receives returned Form 1095-Bs marked as undeliverable by the U.S. postal service?
A. Under IRS guidance, the employer fulfills its responsibility to furnish the statement to an individual if it mails the statement to the recipient’s last known permanent address (unless the recipient affirmatively consented to receive the statement in electronic format).
Practically speaking, the employer should keep the mailing which shows that the employer sent the statement to the recipient’s last known permanent address and that the statement was returned undeliverable. That way, the employer has proof that it mailed the statement to the recipient’s last known permanent address.
To download the full recap click Here.
Did you know that there is a direct corelation between financial and physical health? This article from Benefits Pro is a great read explaining the link between an employee’s financial and physical health by Caroline Marwitz
LAS VEGAS — Are poor physical health and poor financial health connected? The benefits industry is making the link, if you consider how many deals between health-related benefits companies and retirement providers have occurred lately.
Obviously, the poor, at least in America, have a more fragile state of health than the more affluent. And as we age, the potential for unplanned health events to hurt us financially increases — and that’s important for retirement advisors and plan sponsors to remember. But what about your typical employees who are neither poor nor elderly?
A study in the journal Psychological Science looked at worker attitudes and actions to find out whether poor physical health and poor financial health might be linked, and how.
The researchers studied employees who were given an employer-sponsored health exam and were told they needed to change certain behaviors to improve their health. Which employees made the changes and who blew them off?
The researchers accounted for external factors such as different levels of income and physical health, and differences in demographics. Yet the results were still startling:
“Employees who saved for the future by contributing to a 401(k) showed improvements in their abnormal blood-test results and health behaviors approximately 27% more often than noncontributors did,” the researchers concluded in Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements.
The employees who made the behavior changes to better their physical health were also the ones who were taking action to better their financial health.
Employee attitudes about the future and how much control they have over it affect whether they take care of their physical health and their financial health. That sense of control, or conversely, that feeling of no control, and thus, no investment in long-term results, is one reason why some employees might not participate in retirement plans, and, maybe, wellness and well-being programs.
What if, along with the retirement health-care cost calculators many retirement plan providers offer, there was a fatalism calculator too? That way you could see right away each person’s sense of control or feelings of inevitability about their future and help them more efficiently.
Because if someone is more fatalistic, telling them about their 401(k) match or pension options isn’t going to make them enroll in a retirement plan. Scaring them with statistics about the high costs of health care in retirement isn’t going to do the trick either. Instead, consider the following points for such employees:
Look behind employee behavior for the unexamined biases and long-held assumptions that are causing it. If they can see that it’s not who they are that determines their future but what they do, it’s a start.
Marwitz C. (2017 March 19). Employee financial health connects to physical health [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/03/19/employee-financial-health-connects-to-physical-hea?ref=hp-top-stories