Financial Wellness: Healthcare Spending and Saving

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Consumer-driven healthcare is changing the way employers communicate with their employees about healthcare benefits. Companies offering consumer-driven health plans (CDHPs) with a financial management component, such as Health Savings Account (HSA) Programs, are recognizing that healthcare benefits are now as important to their employees’ financial wellness as their physical wellness. They’re making the topic of healthcare spending—and saving—a bigger part in employee benefits education.

Bank of America Merrill Lynch’s most recent Workplace Benefits Report, which provides insight into how employers are helping their employees achieve a level of financial wellness, reveals that healthcare planning is second to retirement planning in how employers prioritize financial wellness education today. Here are key findings associated with healthcare benefits:

  • – 73% of HR professionals said they’ve needed to become experts on healthcare and retirement to do their job effectively
  • – An average of 61% of companies (small, medium, and large) reported they have increased the time spent on HR activities related to healthcare over the past two years
  • – 35% of employers—up from 21% in 2012—provide their employees with education about what healthcare could cost them during retirement; among these, 45% believe that more needs to be done in this area

The report authors suggest that employers’ shift toward consumer-driven healthcare (CDHC) requires an education strategy—like that for retirement planning—providing employees with education and guidance. It’s important for employees to see how healthcare spending today impacts healthcare spending tomorrow, and how financial planning needs to include allocations for healthcare. 

Employers can begin the process of educating employees by focusing on the following topics:

The Rising Costs of Healthcare—what factors influence the price tags on everything from healthcare plan premiums to prescription drugs, and the role of an individual’s spending behavior.

Consumer Driven Health Plans—how the price-sharing structure built-in to a high-deductible health plan can be managed by using a tax-advantaged HSA.

The Basics of Healthcare Saving—why taking both a short-term and a long-term view of healthcare, saving for future medical expenses, and investing wisely is critical.

As employees become more educated on the healthcare system and understand how and why consumer-driven healthcare is gaining momentum, it will be easier for them to make benefits elections for their families as well as see how their healthcare spending is part of the bigger financial picture. We’ll be taking a closer look at healthcare and financial wellness in the coming weeks, sharing more insights into how employers and their health benefits partners can help close the healthcare information gap and effectively communicate with employees about healthcare benefits and savings.

For more on educating employees about benefits and wellness, visit Employee Benefits Education Crucial to Exchange Success and What You Should Know About Employee Wellness Programs [Infographic]

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