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Insurance 101: Financial Wellness Benefits Explained

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Published On: July 7, 2022

Financial wellness, or financial well-being, is a term that gets thrown around quite a bit, but few understand what it means. Financial wellness, also known as financial well-being, are programs or incentives that contribute to an individual’s overall financial health, including via features such as education surrounding or tools to manage debt, income, savings, and net worth. What is also often misunderstood or overlooked is how financial well-being corresponds to mental health and burnout.  


Like how a healthy lifestyle or a balanced diet requires time and effort, personal finance can be a demanding and stress-inducing task that demands diligence. Also, when setting financial wellness goals, there is no one-size-fits-all approach, adding complexity and anxiety as a result. 


Now more than ever, employees are more receptive to opening up and receiving education regarding their finances. In fact, many see financial wellness as an essential benefit that positively impacts their professional and personal lives. Employees also say that financial stress in the past year had a major impact in the following areas: mental health (34%), sleep (33%), self-esteem (30%), physical health (23%), relationships at home (21%), productivity at work (18%), and attendance at work (15%). Addressing these concerns often requires a deeper understanding of your employees and their day-to-day needs, as well as a long-term approach. 


It is important to understand your company’s workforce population to properly adjust and tailor valuable financial well-being benefits. Based on that, what are your employees’ priorities? Do they care about paying off their student loans or are they more invested in saving for a home or retirement? This upfront work can be done through internal surveys that will help inform the curriculum on which to create a well-rounded financial wellness framework. 


The Strategic Advantages of Financial Wellness Benefits 


About 73% of employees deal with productivity and self-esteem issues that stem from financial stress; with such compelling data and employee demand, savvy employers would be wise to consider the benefits of a well-rounded financial wellness benefits package. An effectively designed employee financial wellness program can help employees with the following: 


  • Sharpen productivity and employees’ focus.  

  • Improve physical health. Employees with elevated levels of financial stress are more prone to sickness, burnout, and fatigue. 

  • Increase employee engagement and retention. 

  • Create affordable retirement opportunities for all employees and career advancement opportunities for younger employees. 


However, your financial wellness program needs to do more than just educate, it needs to result in employees taking action to address financial success. 


The Top 4 Financial Wellness Benefits 


Financial wellness benefits are provided as voluntary options for employees; however, many employees expect financial benefits to be included as a part of their employer’s benefits package.  


1. Retirement Planning Options–With Matching 


According to a recent study from SHRM and Morgan Stanley, retirement is the most important financial wellness benefit that can be offered to employees; not only can employees save for their future, but also they are able to get a head start on their financial wellness goals.  


A 401k is a defined contribution plan that allows employees to contribute to their retirement through pre-tax payroll deductions. Employers can make matching contributions at their own discretion. However, when employers make matching contributions, this drives employee morale and loyalty.  


2. Access to Emergency Funds 


PwC recently found that 38% of workers have less than $1,000 in savings to deal with emergencies. Employer-sponsored emergency savings plans exist in a few forms, but all serve the same purpose–giving employees direct access to a liquid account when they need cash. Questions to consider include: 


  • What is the maximum threshold for savings? 

  • Is there a company match? 

  • Can you set up automatic payroll deductions? 

  • How do you access the money in the account? 


Although there are fiscal, logistical, and operational considerations that come with implementing an emergency fund plan, it could be pivotal in building confidence around financial stability, especially in times of economic uncertainty.  


3. Financial Reimbursements 


Financial reimbursements pay employees back for work-related expenses. An attractive component of a financial reimbursement plan is that employees cannot take personal deductions from expenses that are covered. To receive reimbursement, employees must submit detailed records of expenses via a portal log or receipts for employers to deduct the reimbursements. The most common types of reimbursement include: 


  • Transportation 

  • Supplies 

  • Meals and entertainment  


4. Financial Planning and Coaching 


Financial stress and worry can carry over into lost productivity in the workplace. What’s more, 80% of workers reporting high financial stress said they are distracted by stress at work. A concern that started even before the pandemic has only been exacerbated since and has created an ideal opportunity for employers to help with financial planning and coaching tools. 


A financial coach can offer guidance on many types of money issues and concerns to help employees improve their money habits. Playing the role of part therapist and part financial guide, a financial coach will help you meet your financial goals by gaining an understanding of your financial situation, money behaviors, and personality. They can then provide helpful resources to empower you to make decisions confidently.  


For more information on financial wellness and well-being, tune in to Mployer Advisor’s podcast episode “Combatting Employee Stress and Financial Burnout With Voluntary Benefits.” Also, check out our blog “By the Numbers: HR Burnout and Employee Quit Rates.” 


Small Business InsuranceBusiness Insurance



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Samantha Brisch

Lead Generation Analyst, Mployer Advisor


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