Increasing Healthcare Costs Lead to Stress in Employees: How Employers can Help

Lack of money is a prominent source of increased stress levels in our work and personal life. It adversely affects the productivity of employees in the workplace. Continuously increasing healthcare expenses are identified as one of the main concerns causing the shortage of cash flow for people. It triggers an endless cycle as the heightened stress levels resulting from increased healthcare expenses further elevate the cost of well-being.

As per the recent report by PwC (Medical Cost Trend: Behind the Numbers 2020), the primary factors of increasing healthcare expenses are:

Increased drug spending.
Chronic diseases are becoming common.
Increased access to mental healthcare services.

Another study from PwC found that employers don’t offer any help to their workforce to handle such financial difficulties. Only 18% of employees stated that their employers had offered them financial wellness programs to help with these challenges.

However, the employees have a low satisfaction level with the steps taken by employers to address such issues. Regardless of whether their company offers budgetary well-being programs, employees may still need some expertise in taking care of financial challenges to accommodate their individual needs.

Role of Employers

1. Educate Employees on Healthcare Plans and HSAs

One of the most effective ways employers can support their employees is by helping them make informed decisions about their healthcare plans. Many employees struggle to navigate the complex world of insurance plans and health benefits, often leading them to select plans that don’t meet their needs or cost more than necessary.

Health Savings Accounts (HSAs) offer a powerful tool for employees to manage healthcare expenses, yet many workers remain unaware of how to leverage them. HSAs allow employees to save money on a pre-tax basis, which can then be used to cover qualified medical expenses, including deductibles, prescriptions, and other healthcare-related costs. Contributions to HSAs are tax-deductible, and the funds within these accounts grow tax-free, providing immediate and long-term financial benefits.

Employers can play a crucial role by:

Educating employees on how HSAs work, their tax advantages, and how to best utilize them for healthcare savings.
Offering matching contributions to employee HSAs, thereby increasing the financial support available for medical expenses.
Providing tools and resources to help employees compare healthcare plans and make decisions that align with their financial needs and medical situations.

Workshops, online tutorials, and one-on-one consultations can help demystify HSAs and empower employees to take control of their healthcare spending.

2. Implement Preventive Wellness Programs to Combat Chronic Diseases

Chronic diseases are one of the largest contributors to rising healthcare costs. According to the CDC, 90% of the nation’s $4.1 trillion in annual healthcare expenditures is for people with chronic and mental health conditions. The most common chronic diseases—such as diabetes, cardiovascular disease, and obesity—are often preventable with the right interventions.

Employers can reduce these long-term healthcare costs by implementing robust preventive wellness programs that promote healthy behaviors and reduce the incidence of chronic conditions. Some key initiatives to consider include:

Promoting physical activity: Employers can introduce programs that encourage physical movement throughout the day, such as:

Providing wearable fitness trackers to monitor activity levels.
Scheduling walking meetings to replace sedentary conference room discussions.
Offering standing desks and promoting active breaks to encourage movement.
Organizing fitness challenges or group workout sessions to create a culture of wellness.

Encouraging smoking cessation: Smoking remains a significant contributor to chronic disease. Employers can implement comprehensive smoking cessation programs that provide resources, counseling, and support for employees trying to quit.

Nutrition plays a major role in preventing chronic diseases. Employers can create healthier food environments by:
Offering nutritious meal options in company cafeterias.
Organizing educational sessions on nutrition and meal planning.
Celebrating a "Food Wellness Week" where employees are encouraged to bring healthy meals and share recipes.

By reducing the prevalence of chronic conditions among their workforce, employers can significantly lower long-term healthcare costs while improving the overall health and morale of their employees.

3. Encourage Smart Healthcare Decisions to Avoid Unnecessary Costs

Employees frequently incur unnecessary healthcare costs due to a lack of understanding of their medical options. In many cases, costly procedures like surgeries can be avoided in favor of more affordable and equally effective treatments, such as physical therapy.

Employers can help their employees make smarter healthcare decisions by:

Educating employees on treatment options: Providing resources that help employees compare treatments and make informed decisions can prevent unnecessary procedures. For example, employers can provide information on the benefits of physical therapy as a less invasive alternative to surgery for certain conditions.
Promoting transparency in healthcare pricing: Employers can guide employees on how to research and compare healthcare providers based on cost and quality, encouraging the use of lower-cost alternatives when appropriate. Tools that provide price transparency can empower employees to make more cost-effective healthcare choices.
Partnering with healthcare providers: Some employers offer direct partnerships with healthcare providers or telemedicine services, which can reduce the cost of care while still providing high-quality treatment.

By encouraging employees to explore alternatives and make well-informed decisions, employers can reduce the frequency of high-cost medical interventions, saving employees and the company money.

4. Offer Financial Wellness Programs

Healthcare costs are only one component of employees' financial stress. Broader financial wellness programs that address issues such as budgeting, debt management, and retirement planning can provide employees with the tools they need to manage their overall financial health. Employers can implement financial wellness programs that include:

Workshops on budgeting: Helping employees understand how to manage their money effectively can reduce the financial strain of healthcare costs.
Debt management support: Employees struggling with medical debt can benefit from guidance on managing and consolidating debt to reduce interest payments and free up cash flow.
Retirement planning resources: Helping employees plan for healthcare expenses in retirement can alleviate long-term financial stress.

These programs can be offered in various formats, such as in-person workshops, online seminars, or individual financial counseling sessions, providing flexibility to meet employees' needs.

5. Foster Open Communication and Mental Health Support

The financial burden of healthcare is closely tied to stress and mental health. Employers can create a more supportive work environment by encouraging open communication about financial stress and mental health challenges. Employers can offer:

Access to mental health resources: Offering mental health services, such as Employee Assistance Programs (EAPs) or access to counseling, can help employees manage stress related to healthcare costs.
Financial counseling services: Employers can provide access to financial advisors who can help employees navigate their healthcare expenses and broader financial concerns.
Regular check-ins: Managers can engage with employees in one-on-one check-ins to understand their concerns and offer guidance on available resources.

Fostering a culture of openness and support can help employees feel more secure in managing their healthcare costs and reduce the stress that negatively impacts their productivity and well-being.

Conclusion

Rising healthcare costs are a significant source of stress for employees, affecting their personal and professional lives. However, employers have the opportunity to make a meaningful difference by offering proactive support. By educating employees on healthcare plans and HSAs, implementing preventive wellness programs, encouraging cost-conscious healthcare decisions, offering financial wellness resources, and fostering open communication, employers can alleviate the financial burden of healthcare costs.