Doctors and the medical community have long known that stress can affect health. One of the top contributors to overall stress levels is worry over finances. A 2012 study from Financial Finesse, a California financial education company, shows the reverse is also true: Reducing financial stress can improve health, and significantly reduce health care costs.
The study was conducted at a Fortune 500 company, and reviewed the differences in healthcare savings between employees who took advantage of financial education opportunities offered by the company, designed to help them resolve financial problems and reduce financial stress, and those who seldom or never used these services. The study showed a 22 percent savings in healthcare costs from 2009 to 2010 among heavy users of financial services, versus 4 percent for non-users. The study also included information from an AP AOL Health Poll showing the effects of financial stress on the body, including migraines, insomnia, depressions, high blood pressure, and other disorders.
The benefits of financial health
The study also evaluated the effectiveness of the financial wellness program by examining three areas:
- Short-term financial improvement. The study looked at the actions employees took within 30 days of participating in the financial wellness programs.
- Long-term improvement. The study examined the changes employees made to their finances over a two-year period.
- Cost savings to the company. The study compared financial wellness users to non-users based on other metrics in addition to health care claims, including absenteeism, garnishments, and participation in Flexible Spending Accounts (FSAs).
Short-term improvements were dramatic: Within 30 days, more than 90 percent of employees that participated in a financial wellness program had taken at least one action to improve their finances, while 78 percent took two or more actions. Over the long term, employee participants increased contributions to their 401(k) plans, paid off more of their credit cards on a monthly basis, and established more emergency funds for unexpected expenses.
Get your employees financially healthy
Bolstered by these results, more and more companies are implementing financial wellness programs. According to Financial Finesse, 80 percent of their clients were establishing financial wellness programs in 2011. Many companies focus on increasing participation in retirement programs, but until employees have control of their finances, they can’t put aside funds for retirement.
If your company is looking for ways to decrease medical expenses and improve productivity, FiduciaryFirst can help by providing a financial wellness program for your employees. Our complimentary PlanSuccess AuditSM can evaluate your employee financial programs and provide customized strategies to help your employees get financially healthy. Learn more about our services at fiduciaryfirst.com or call us at 407-740-6111.