According to a 2024 financial wellness survey, 86% of full-time employees express concerns about their finances. Additionally, other research indicates that financial worries can adversely affect sleep, mental health, self-esteem, physical health, and home relationships. These concerns often infiltrate the workplace, leading employees to become distracted and less engaged, making this an urgent matter for employers to consider.
There is a notable rise in employees seeking to enhance their financial literacy with support from their employers. According to a recent survey, interest in financial wellness increased from 17% in 2023 to 35% in 2024. Fostering employee financial wellness is essential, and employers are uniquely positioned to meet this need through their benefits offerings.
Among the employer-sponsored benefits available, flexible spending accounts (FSAs) and health savings accounts (HSAs) stand out. Their immediate tax benefits and ability to cover a range of health-related expenses make them valuable tools for both organizations and employees in promoting financial wellness.
To maximize the value of these tax-preferred accounts, continuous education is vital. Providing resources such as webinars, seminars, articles, and online tools can assist employees effectively. Here’s how:
- Tax Savings:
FSAs and HSAs reduce taxable income, allowing participants to save approximately 30% of their spending by utilizing pre-tax dollars for qualified expenses. - Bridging Insurance Gaps:
Accounts can be leveraged to cover co-pays, deductibles, and coinsurance not fully covered by health plans. Maximum contributions for FSAs and HSAs are projected to reach $3,300 and $4,300 (individuals), or $8,500 (families) respectively in 2025. - Affordability of Healthcare:
These accounts can assist in covering various healthcare expenses, enabling employees to save on routine healthcare costs, including:- Vision care such as exams and glasses
- Over-the-counter medical supplies
- Telehealth services
- Healthcare aids like crutches and braces
- Enhancing Financial Understanding:
Educating employees about the differences between FSAs and HSAs is crucial. While both options are available, employees can typically select only one. HSAs grow like a 401(k) and do not expire each year, allowing for long-term strategy.
Whether businesses choose to offer FSAs or HSAs, comprehensive educational efforts are essential. Observations indicate that 75% of employees prefer working for an organization that prioritizes their financial wellness. Employers are responding, with 97% acknowledging their responsibility in this area.
By equipping employees with the tools and knowledge needed for effective decision-making regarding FSAs and HSAs, organizations can significantly boost their workforce’s financial confidence, contributing positively to overall well-being.
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