Getting on the Track to Financial Wellness

A study by Lincoln Financial finds that 55% of workers in the U.S. say they are on the right track to achieving financial well being. The study looked into the lives of the right-trackers, and found these five factors contribute to their feelings of financial security and financial success:

  1. 71% have created a financial plan.
  2. 98% are focused on the future.
  3. 78% exercise at least once a week.
  4. 63% feel good about themselves, which makes them more optimistic.
  5. 57% are enrolled in more than three non-medical benefits.

Employees define financial wellness in these terms:

  • 29% Being prepared for unforeseen events that could affect my
  • financial situation.
  • 27% Living comfortably and having control over day-to-day finances.
  • 25% Having financial freedom that allows me to enjoy my life.”
  • 19% Other.

Employer Sponsored Insurance Rate Remains Stable

Since 2009, employer-sponsored insurance has been on the decline in California. A key question around the Affordable Care Act (ACA) was whether the reforms would further erode employer-sponsored insurance coverage. A recent survey by the California HealthCare Foundation finds that employer-sponsored insurance in the state has remained stable from 2013 to 2015. Worker eligibility for employer-sponsored insurance also remained stable, and even increased among some groups. However, the percentage of eligible workers who chose to enroll in employer-sponsored insurance declined from 86.4% in 2013 to 80.2% in 2015, bringing California closer to the national average take-up rate of 79%. This decline could be caused by the availability of alternative coverage options through Medi-Cal and Covered California.

Employment-Based Health Coverage Holds Steady

Sixty-two percent of the non-elderly population had employment-based health overage in 2014, which is the same as in 2013, according to the Census Bureau. The percentage of non-elderly people in the United States with health insurance increased from 2013 (84.6%) to 2014 (88%). The percentage of uninsured when down from 2013 (15.4%) to 2014 (12%). Just over 32 million were uninsured in 2014, down from 41.1 million in 2013. The increase in health coverage among the entire non-elderly population came from growth among people buying health insurance directly from an insurance carrier (up from 8.8% in 2013 to 12.6% in 2014) and from enrollment in public programs (up from 19.3% in 2013 to 21.7% in 2014).

California Employer Health Benefits: Workers Pay the Price

The percentage of employers offering coverage continued to decline in California, according to a report by the California HealthCare Foundation. Only 57% of employers say they provided health insurance to employees in 2015, down from 69% in 2000. Twenty-seven percent reduced benefits or increased cost sharing, and 41% said they were very or somewhat likely to increase employees’ premium contribution in the next year. This trend will have major implications for household budgets. The report also finds the following:

  • 42% of  firms that had  many workers earning $23,000 or less offered health coverage in 2015 compared to 18% in 2014.
  • Health insurance premiums for family coverage grew 4.5%, which is a slower growth rate than in recent years. Family coverage premiums have seen a cumulative 216% increase since 2002, compared to a 37% increase in prices.
  • The average monthly health insurance premium was $573 for single coverage and $1,554 for family coverage in California, including the employer contribution. It was significantly higher than the national average.
  • 40% of workers in small firms faced an annual deductible of at least $1,000 for single coverage, compared to 10% of workers in larger firms.

Workers Are Satisfied with Their Health Benefits

Sixty-six percent of workers are satisfied with their health benefits and express little interest in changing the mix of benefits and wages, according to a study by the Employee Benefits Research Institute and Greenwald & Associates. Fourteen percent would trade wages to get more health benefits, and 20% trade some health benefits for higher wages. Forty-four percent would give up a wage increase to maintain their health coverage.

However, the preference for health benefits over wages seems to be waning. From 2012 to 2015, the percentage of workers who were satisfied with their health benefits fell from 74% to 66%. At the same time, the percentage who want fewer health benefits and higher wages increased from 10% to 20%. If their coverage became taxable, 50% would continue with their level of coverage, up from 31% in 2011. Twenty-nine percent would switch to a less costly plan; 16% would shop for coverage directly from insurers; and 5% would drop coverage.

Forty-four percent want to continue getting coverage the way they do today; 39% want to choose their insurance plan, having their employer pay the same amount it spends toward that insurance, and pay the remaining amounts themselves; and 17% want their employer to give them the money, allowing the worker to decide whether to purchase coverage and how much to spend. Eight in 10 say choice of health plan is extremely important (41%) or very important (39%)

Employees Worry About the Future of the Health Care System

Confidence about today’s health care system has remained fairly level among American workers in recent years, but they are worried about the future according to a survey by the Employee Benefits Research Institute (EBRI). The survey reveals the following:

  • 47% of workers are extremely or very confident about their ability to get the treatments they need today; 33% are confident when they look out over the next 10 years; and 26% are confident when they consider the Medicare years.
  • 42% are confident that they have enough choices about who provides their medical care today; 30% are confident when they look out over the next 10 years; and 25% are confident when they
  • consider the Medicare years.
  • 30% of workers are confident that they can afford health care without financial hardship today, 25% are confident when they look out over the next 10 years, and 24% are confident when they consider the Medicare years. For more information, visit EBRI.org.

How New Technologies are Reshaping the Future of Work

A low-skilled Uber-type job is unsustainable for many people. But the same type of contract job can work for professionals who have skills that are difficult to outsource and are resistant to automation, according to a report by www.thumbtack.com. Technology solutions and the Affordable Care Act have removed obstacles that prevented many people from starting their own businesses.

Skilled professionals without a college education report that gross revenues for their business that are up to $20,000 higher than the median income of other similarly educated workers. Because they are working full time,they tend to earn more than the part-time income of their low-skilled gig economy counterparts.

While the commodity-focused gig economy exists primarily in major metropolitan areas, skilled professional marketplaces are growing and thriving in every pocket of the country. Two-thirds of skilled professional respondents are using technology-powered marketplaces to build and grow their primary business (versus people who are doing this work to earn extra pocket money).

Marco Zappacosta, founder and CEO of Thumbtack said, “Popular discussions about the gig economy have focused on the proliferation of low-skilled jobs, such as Uber drivers, consisting mostly of people looking to earn extra income…But technology is also transforming work for individuals and small businesses, creating unprecedented opportunity for a growing class of skilled professionals.” The report draws on Thumbtack’s proprietary data from tens of thousands of small businesses, as well as the latest economic data, labor statistics and forecasts

How the ACA Is Shaping Benefit Plans

The Affordable Care Act (ACA) is driving three trends in the workplace: increased outsourcing; reliance on private exchanges; and consideration of self-insurance. The study by the Guardian also finds that 60% of employers need guidance on managing their responsibilities under the Affordable Care Act (ACA).

Employers need help with new administrative and compliance requirements. They also need help with offering employees benefit choices and enhancing the enrollment experience while controlling costs and funding. Sixty-one percent of employers say that preparing for a post-healthcare reform era is a highly important benefit objective, but only 40% say they are prepared to meet this objective. Ray Marra of the Guardian said, “Brokers and carriers are needed to play a strategic role in helping employers navigate the ACA and in identifying the best options for how they can move forward in a changed benefit landscape. As employers adapt to the ACA, we’re seeing greater adoption of private exchanges and self-funded medical plans paired with stop loss insurance.”

One in three employers expects to outsource more aspects of their benefit program as a result of the ACA. Nearly 70% of employers expect compliance and administrative burdens to grow. About 20% of employers expect to offer benefits on a private exchange in the next year. Top reasons are to increase employee choice and to improve the employee experience. Fifty-eight percent those who are thinking of self-insuring say that the ACA is the impetus. Half of those planning to self-insure expect to carry stop-loss insurance. Self-insuring medical plans is a less common funding option for smaller firms, but it’s getting more attention due to the ACA. Seventy-eight percent of employers expect benefit cost increases, due to the ACA

American Workers Don’t Understand Their Benefits

While most Americans understand the importance of their personal finances and employee benefits, 40% say they know little or nothing about these benefits, according to a study from MassMutual. Most people seemingly have their financial house in order, saying they prioritize understanding their personal finances (77%), having enough medical insurance (74%) and being on track to retire comfortably (65%). Yet 38% say they know little or nothing about their employer-provided benefits, such as healthcare, life insurance, 401(k) retirement plans, and other benefits. Forty-two percent say they are clueless about whether or not they are on track to retire comfortably.

While many people say they do just fine managing their finances, 37% find doing so somewhat or very difficult and 40% say personal financial problems are a distraction at work, according to the study. Some groups find personal finance more difficult than others, including Millennials (58%), parents (50%), Generation X (47%), women (44%) and those with annual incomes of $50,000 or less (44%). Baby Boomers were the least likely to encounter difficulty in managing their finances (28%) or being distracted at work by financial issues (24%).
Eighty percent do not use an online financial tool to manage their retirement, healthcare and other forms of insurance. However, 73% say they would be likely to use such a tool if it were available free, especially if it were provided by a trusted and respected financial services company.

Millennials (82%), parents (80%) and Gen Xers (78%) are especially interested in using an online financial tool. Thirty-two percent said they would be more likely to enroll in their employee benefits if they could use an online tool to help them figure out their needs. Earlier this year, MassMutual launched MapMyBenefits, a free, online tool that enables employees to prioritize their benefit choices

Workers Get a Break from Health Cost Increases

Forty-seven percent of workers say they have not experienced a change in health care costs in 2015 compared to 36% in 2014. One-half of workers with health insurance coverage have had an increase in health care costs in the past year, according to a survey by the Employee Benefits Research Institute (EBRI).  Twenty-five percent of workers say the U.S. health care system is poor; 30% say it’s fair; 13% say it’s very good; and 4% say it’s excellent. Dissatisfaction appears to be focused primarily on cost. However, 50% of those with health insurance coverage are extremely or very satisfied. Only 9% are not satisfied with their health plan.

Last Updated 10/20/2021

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