Having health insurance is not enough to protect employees from going into debt over medical bills, according to a recent survey of more than 10,000 US employees by Salary Finance, the leading global provider of financial education and salary-linked savings and loans for employees.
Notable survey insights include:
Having health insurance makes a huge difference in quality of life. According to the survey, 81 percent of employees have health insurance. Those with health insurance are 17 percent happier and 19 percent more financially fit than those without.
Even with insurance, out-of-pocket costs are overwhelming for millions. For one in 10 employees with insurance, out-of-pocket medical bills cost more than $10,000 annually, comprising north of 20 percent of the average worker’s salary.
Medical debt significantly adds to employees’ total debt burden, and many people with health insurance still go into debt over high medical bills. According to the survey, 33 percent of people who have insurance carry medical debt month to month. This is in line with data indicating 35 percent of employees who took out salary-linked loans with Salary Finance in the last 30 days have unpaid medical bills.
Medical debt drastically impacts employees’ financial fitness. Employees who have health insurance but still carry medical debt are nine percent less happy and 42 percent less financially fit than those without debt.
“Health insurance reform is one of the defining topics of this election season, as having health insurance has a profound impact on people’s lives,” said Dan Macklin, US CEO, Salary Finance. “However, having health insurance is not enough to protect against crippling out-of-pocket medical bills. The financial stress these bills create in turn leads to severe mental health issues that impact America’s businesses and economy.”
According to the survey, workers with money worries are over three times more likely to suffer from anxiety and panic attacks, eight times more likely to have sleepless nights and four times more likely to suffer from depression and suicidal thoughts. Women are more impacted than men; the majority of working women (56 percent) suffer from financial stress and 63 percent feel they do not earn enough to save.
Stress from medical debt also impacts employee productivity at work; survey results indicate 24 percent of employees with money worries have troubled relationships with coworkers and 22 percent cannot finish daily tasks. This lost productivity costs businesses 11-14 percent of payroll expenses, creating a strong business need to address employees’ financial stress.
How employers can help
Employees are receptive to employer assistance; the survey found more than two-thirds of workers (68 percent) feel their employer cares about them and their wellness, and 79 percent of employees trust their employers with their financial information. According to a recent Harvard study, offering financial wellness benefits reduces employee turnover and increases loyalty.
Employers cannot afford to continue to turn a blind eye to their employees' financial wellness. Although historically, employers have considered personal finances to be none of their concern, the connection between financial wellness and workplace productivity is now too important to ignore. Employers have been able to leverage their scale to lower the cost of insurance and other benefits for their staff. Similarly, now, through salary-linked loans, employers can help their employees avoid high cost debt and/or get out of debt and improve their credit scores. These conversations must be brought to the forefront to improve the lives of millions of employees currently suffering.