A recent study finds that more than twice as many companies are offering workplace financial wellness programs compared to four years ago, but awareness and understanding of critical benefits are lacking.
In its ninth annual Workplace Benefits Report, Bank of America reports that 53% of surveyed employers offer wellness programs today, up from 24% in 2015. The study is based on a nationwide survey of 996 employers and 804 employees that tracks the importance of benefit programs.
While 55% of employees today rate their own financial wellness as good or excellent, that percentage is down from 61% a year ago. “We are seeing a slight decrease in employees who say they are doing well when compared to last year, as well as a drop in those who say they aren’t doing well,” the report notes.
Consistent with other studies, Bank of America found that women have saved far less for retirement, reporting median retirement savings of $30,000, compared to $100,000 for men. The study notes that this may be contributing to the finding that only 43% of women report feeling financially well, compared to 65% of men.
The availability of workplace benefit programs that help address employees’ overall financial situations can have a direct impact on how financially well employees feel, the study observes. Not surprisingly, employees who rate their financial wellness positively are more likely to say they:
- can effectively manage their day-to-day finances (29% more likely);
- feel savings for retirement are on the right track (23% more likely); and
- can pay bills and save for future goals (17% more likely).
Top Priorities
As for areas of focus, the study found that certain wellness program features are more highly valued by employees than others, with advice from a professional ranking as the top priority. The following includes employees’ rankings in the order of importance:
- Advice from a professional, such as a financial advisor, planner or accountant
- Information on financial topics separate from 401(k) education
- Availability of financial products/services that help employees
- Review/evaluation of employees’ individual financial situations
- Online financial tools or calculators, such as debt payoff, car/mortgage payment or college planning tools
Health Care Knowledge Gap
While health savings accounts (HSAs) have emerged as a critical tool in saving for health care costs, the study found that 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. Below is the percent of employees who correctly identified each HSA attribute:
- Offers a “triple” tax advantage (30%)
- Funds in the account can be invested (37%)
- Funds in the account do not expire (74%)
- Requires enrollment in an HDHP (78%)
Similarly, while 65% of employers claim they have a solid understanding of HSAs, only 7% accurately identified features of an HSA.
What’s more, when employees were asked about the core building blocks of financial wellness, managing health care costs ranked last. Also surprising, the study found that 53% of employees have skipped or postponed at least one important medical activity to save money, including appointments (32%), tests/procedures (21%) and medication purchases (14%).
“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,” notes Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America.
The online survey with employees and employers was conducted by Escalent on behalf of Bank of America between Feb. 1 to Feb. 26, 2019. To qualify for the survey, employees had to be current participants in the 401(k) plan and employers had to currently offer a 401(k) plan; the plans did not have to be provided by Bank of America.
