ObamaCare: 69% Have Experienced A Rise In Health Care Cost Over The Past Two YearsVW Staff
ObamaCare: 69% Have Experienced A Rise In Health Care Cost Over The Past Two Years by Bank of America Merrill Lynch
Employees want help pursuing wellness
Employees show a growing need for help building healthy financial habits.
Our new Workplace Benefits Report survey finds that employees became less certain about their financial futures between 2013 and 2015. Facing growing uncertainty, market volatility and financial stress, employees are looking to their companies for help. Our survey highlights the nature of employees’ struggles and the ways in which employers can support employees as they work toward greater financial wellness. In particular, our research finds that employers can play a key role in helping employees build sound financial habits essential for financial security.
At Bank of America Merrill Lynch, we are committed to helping employers and their employees in this effort. We encourage employers to draw on our research and insights to gain understanding about the most important trends affecting workplace benefits programs, and to help employees achieve both short- and long-term financial success.
Health care cost – Financial wellness slips
Employees’ responses indicate declines in financial wellness since our 2013 survey. The percentage of participants categorized as “Not At All Secure” rose from 31% to 41%.
The fact that financial wellness did not improve, while the economy did, suggests that external factors alone may have limited influence in driving wellness improvements.
How we measured financial wellness
Our 2013 and 2015 surveys asked employees 10 questions, each covering a different aspect of their financial lives. They were asked to rate their level of agreement with statements such as “I am always able to pay my monthly mortgage or rent,” “I am saving enough for retirement” and “I am always able to pay for health care costs.” In each case respondents could choose responses ranging from a strong positive (such as “Strongly Agree”) to a strong negative (“Strongly Disagree”). A respondent received a point for each question that he or she answered with the most positive response. Level of wellness was categorized based on the respondent’s point total. Note that our wellness measure is based entirely on self-reported sentiment, not on actual financial standing.
Nearly all components of financial wellness that we measured declined between 2013 and 2015. The largest declines came in response to the following questions:
The only component for which responses improved was, “I am saving enough for my retirement.” Nineteen percent strongly agreed with this statement, compared with 15% in 2013.
Uncertainty leads to stress
When we dig deeper into the wellness findings, we discover that the declines in our measure of financial wellness occurred not because employees’ attitudes about their financial situations turned outright negative. Rather, employees became much more likely to select the second-most-positive response instead of the most positive response. We interpret this shift to mean that employees feel less certain about their finances, even if their actual financial conditions may not have worsened.
Employees’ lack of certainty about their finances seems to manifest itself in high levels of financial stress. Fully 60% of employees report being “somewhat” or “very” stressed about their financial situation, up from 50% in 2013.
Planning makes the difference
Examining the responses of the most financially well employees, and contrasting them with the responses of the least financially well employees, highlights the different habits of the two groups and the places where employer assistance could be especially effective.
Perhaps the biggest difference between the groups we’ve labeled Very Secure and Not At All Secure comes down to one word: planning. Very Secure employees appear far more likely than Not At All Secure employees to envision the future and take steps to prepare for it financially.
These findings suggest that employers who want to cultivate financial wellness should focus on helping employees build healthy financial habits, particularly with regard to planning. Employers looking to help their less financially secure employees become more like their more financially secure employees — and to help reduce employees’ financial stress — might consider making financial professionals available, simplifying enrollment in benefits programs and communicating around tools and resources that can help with planning.
Employees need day-to-day assistance
Before they can plan for the future, employees need to manage their finances today. Employees’ responses show that they are struggling to juggle competing financial priorities, and in many cases are sacrificing the future to make ends meet.
Employers can help. Fully 55% of employees agreed with the statement “I need help managing my finances.” Employers can provide resources that help employees improve their understanding of their overall financial lives, enabling them to set sound priorities and allocate their resources more wisely.
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