With open enrollment season fast approaching, working Americans are gearing up to make their benefit elections for 2024. Over the past few years, we've seen COVID-19 and inflation influencing the decision making for many. While inflation has moderated, many individuals are experiencing pain from elevated prices. According to recent Voya research, a majority (79%) of working Americans surveyed strongly or somewhat agree that they are worried their workplace benefits will cost them more because of inflation. This is a significant increase from 66% in June 2022, when inflation was at its peak. As the economy continues to recover from the dual financial impacts of the pandemic and inflation, many individuals are still feeling financial strain and will be looking to their employer for support. Given that backdrop, here are a few things benefits advisors and employers should keep in mind when it comes to providing support and tools to help employees this open enrollment season.
Inflation and financial hardships remain at the forefront
Although the cost of eggs has finally returned to "normal" levels, the overall value of goods and services and the ability to cover one's monthly expenses is still costing many Americans more. While health benefits remain a clear concern, many Americans today are faced with competing financial decisions when it comes to allocating their monthly paycheck. Things like student loan debt, being able to save for retirement and the ability to save for an emergency fund continue to be important considerations for individuals when it comes to their holistic financial picture. As a result, it's not surprising that 7 in 10 (72%) of employed Americans strongly or somewhat agree that they will spend more time reviewing their benefit elections during open enrollment to make the most of their benefit dollars because of inflation.
While open enrollment is primarily focused on health care benefit decisions, one can't ignore the impact enrollment decisions have on the ability to save for retirement. Three-quarters of Americans worry about the impact of inflation on their ability to save enough for retirement (75%), up significantly from June 2022. This correlation shows that inflation remains a concern for many, leading them to look for workplace benefit savings possibilities and support this annual enrollment — and employers have an opportunity to provide support in more ways than they have before.
|Financial concerns can impact mental health
It's important for employers to understand that financial stresses can extend beyond one's bank account to impact mental health and wellbeing. According to PwC's 2023 Employee Financial Wellness Survey, in the past year, financial stress and money worries have had a negative impact on more than half (55%) of full-time employees' mental health. Similarly, Voya research has found that nearly 6 in 10 (57%) Americans strongly or somewhat agree that their financial stability has a direct impact on their mental health. For employers, recognizing the connection between financial concerns and the influence on mental health is critical — and what's even more telling for employers is that our research has also found that 63% of working Americans somewhat or strongly agree that their mental health has a direct impact on their ability to perform their job effectively.
Perhaps what's most important to consider is that more than half (55%) of employed individuals strongly or somewhat agree that their employer has a responsibility to support their mental and emotional well-being. Nearly half (48%) would select a workplace benefit offered by their employer that provides more mental health support and resources even if it costs them more. As mental health care support becomes more crucial, providing the resources that employees have come to expect can benefit everyone. Thus, it's important to understand that both financial and mental health needs are now equally important components to incorporate as part of a comprehensive benefits package.
|Support and guidance remain critical
Knowing the ongoing financial concerns impacting employees today, it's not surprising that many individuals are looking for help. In fact, according to Voya research, a majority (79%) of employed individuals are interested in receiving support to maximize their workplace benefit dollars across their retirement savings, health savings accounts (HSAs), health care insurance and voluntary benefits at work.
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