Are you suffering from financial stress? From mortgages to student loans to medical bills to retirement, most people have money matters that weigh on them. An employer-provided financial wellness program might help alleviate that stress by giving you the tools to better handle your money challenges.
An increasing number of companies are offering these programs because they’ve recognized that workers aren’t at their most productive when they’re distracted by financial problems. Workers also aren’t at their most productive when they can’t get to work because they can’t afford an emergency car repair – or when they’re absent because stress has depressed their immune system and made them sick. Financial wellness programs help workers understand budgeting, investing, saving for college, maximizing workplace benefits such as health savings accounts (HSAs) and 401(k)s, and more.
How They Work
The idea behind these programs is that employees burdened by money problems don’t perform as well on the job as those who have their finances under control. Concerns such as not being able to meet emergency expenses, not being able to pay their credit card bills or not being able to meet their monthly financial obligations can keep staffers from doing their best work.
Programs are tailored for each company based on its employees’ needs. They are typically administered through a website, but may also offer support by phone and online chat and through onsite seminars or workshops and in-person, one-on-one meetings with financial planners. The goal is to help employees become more aware of their financial habits and address financial issues they might face at different stages of their lives, ideally before a problem arises or when it is small and manageable, says certified financial planner (CFP) Jeff Dorfman, business development manager and senior adviser with Ascende Wealth Advisers, an SEC-registered investment advisory firm serving corporate retirement programs.
Expect to take an initial assessment and have access to online courses, videos, infographics, educational games, financial calculators and financial software. You’ll be offered education on topics such as these:
- How to protect your household against loss of income if a breadwinner dies unexpectedly or becomes unable to work because of illness or injury
- How to minimize medical expenses without compromising your health
- How to save and invest for retirement so you don’t outlive your nest egg
- How to get out – and stay out – of debt
- How to figure out how much you need to save and how to invest for retirement
- How to save and invest for your children’s education
- How to create a will
- How to create a budget
- How to buy and finance a home
- The importance of creating an emergency fund
- How to save for short-term goals
- How to take advantage of tuition reimbursement or student loan repayment assistance programs at work
- How to handle personal bankruptcy
- How to catch up if you’re behind on paying your taxes
- What to do if you’re offered a pension buyout
- How to manage an unexpected cash gain
Unlike health insurance and other benefits for which employers and employees share the cost, employee financial wellness programs are usually a free benefit, paid for entirely by the employer – or at least that’s what program administrators say is ideal. “Assurance always recommends that employers make any financial wellness programs available to employees at zero cost,” says Jill Micklow, a wellness consultant on the employee benefits team of Assurance, an independent insurance brokerage headquartered in Schaumburg, Ill. “This will break down the barrier to entry and increase engagement from the get-go,” she says. Anthony Del Porto, director of marketing at Questis, Inc., a financial wellness program provider in Charleston, S.C., says the Questis platform, including phone calls to advisors, is available for free to employees to avoid the common problem of people not asking for help with their money because they need to pay for that help.
You might be hesitant to open up at work about your finances. Most people don’t want their boss or coworkers to know they’re struggling financially. They might feel embarrassed, or they might be worried that they’ll be considered a less desirable worker if anyone views them as being irresponsible with money – a judgment that might seem unfair if they have been hit with more financial obligations than they can comfortably handle.
At the opposite end of the spectrum, employees who have their finances well under control might prefer to keep that information to themselves to avoid being seen or treated differently. “Privacy concerns usually rank as the biggest obstacle for employees to overcome when dealing with an employer provided financial wellness program,” Dorfman says. “We all have privacy concerns when it comes to our finances, and those are clearly compounded when it’s your employer sponsoring the program.”
Program administrators say there are ways for employees to be assured that any personal information they disclose will remain private, whether they’re taking an online financial assessment, showing up for a course at work on their lunch break or meeting with a financial advisor provided by their employer. According to Del Porto, “With Questis, we don’t let the employer see any personal info specific to a particular employee, including whether a specific employee has signed up to use the program.” The Questis application is hosted on a different website from the employer’s website, and employees can sign up anonymously, allowing them to benefit from the program without any fear of their identity being disclosed.
Dorfman says that in most cases employers use third-party vendors to provide financial wellness programs; companies are not delivering the programs themselves. Employers need to make it clear that the vendor doesn’t share any identifiable information with them.
Ensuring Unbiased Advice
You might be wondering if the financial advice you can get through your employer’s financial wellness program is neutral and in your best interest, especially if you’ve been frustrated with the company’s other benefits, such as a 401(k) plan with pricey investment options. “Employers should be careful when selecting their financial wellness provider to make sure they are unbiased and not tied to any products or services,” Micklow says.
If your plan tries to steer you toward certain providers or investments, be cautious. However, if it offers general advice and access to credentialed professionals such as CFPs, who are required to meet a fiduciary standard, that’s a good sign. “Several benefits claim to be financial wellness but are not at all – discount purchase websites, for example,” Del Porto says. “A high quality financial wellness program offers targeted education [based] off of your personal situation, provides innovative tools that make finance easier, determines high-quality financial solutions, and gives access to human financial advisors.”
Rodriguez says that online solutions such as Enrich don’t sell or promote financial products or services to employees. And Dorfman says that bias “really isn’t a common issue, since financial wellness programs are more about helping employees identify financial weaknesses and empowering them with the tools and knowledge to begin addressing the gaps in their financial lives. That being said, if you are engaging a financial adviser for personal financial matters through a wellness program, you want to make sure that adviser is acting as a fiduciary and agrees to that standard. Employees should still vet their adviser as they would if they were searching for one on their own by reviewing their credentials, researching their records with appropriate agencies and asking questions about methodology, compensation and service standards.” (For more, see Ethical Standards You Should Expect from Financial Advisors.)
How to Maximize Your Benefits
According to Del Porto, there are three keys to getting the most out of your employer’s financial wellness program:
- Use it often.
- Input as much of your financial data as possible, so you get the best picture of your finances.
- Follow through on your advisors’ suggestions.
Rodriguez says that it’s crucial to take that beginning step and log in for the first time, while Dorfman advises that figuring out where you need help and establishing a clear and obtainable first goal will help you make the most of the program.) If your company doesn’t offer a financial wellness program and you want one, Del Porto suggests asking your human resources or benefits director about it, as it may not even be on their radar.
Dorfman believes that one or a handful of employees can have more influence over employee benefits than they might think. “A simple note to a benefits department asking them to explore financial wellness may be what someone needs to start the ball rolling,” he says. Rodriguez concurs, noting that human resources departments are always looking for new ways to improve employee engagement and their quality of life and, because financial wellness has been shown to have a high return on investment to employers, they are open to investing in these initiatives.
The Bottom Line
Rodriguez points out that participating in an employee financial wellness program can save you thousands of dollars a year, and the education you receive may help you save more than you could earn by getting a raise. And though a fat raise might seem like the best solution to your financial difficulties, if a significant pay increase isn’t on the horizon, the best solution is to educate yourself about ways to make the best of what you have.
Even if you are expecting to move up the socioeconomic ladder in the near future, learning how to better manage your money will help you make the most of your additional income. Find out if your company offers an employee financial wellness program, then set aside 30 minutes, an hour or whatever you can manage each week to take advantage of it. (For more see Is Your Employer-Provided Life Insurance Coverage Enough? and Should You Bite on Dental Insurance?)