financial stress Archives

Donald Trump, the Affordable Care Act and Your Employee Benefits

by Emily Pfund | Nov 16, 2016 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this helpful, and we’d love your feedback.

Were your employees struggling in the wake of last week’s election results? Many employers across the country reported employees were distracted in the wake of the news no matter who they voted for. Trump supporters, like President-elect Trump himself acknowledged, were surprised that he won. Hillary Clinton supporters were extremely disappointed she lost.

Now that some of the shock from last week’s presidential election results has passed, we’re looking toward the future. President-elect Trump has proposed policies that could have massive impacts on the employee benefits industry, from repealing and replacing the Affordable Care Act and making changes to Medicare and Medicaid to changing federal tax laws. Here’s what five leaders in the employee benefits industry think of Trump’s policies and how they will change the industry for benefits providers.

More employers are offering to help their employees pay off student debt. Is this set to be the hottest employee benefit of 2017?

Got bit by a duck? A sick pet llama? These are some of the craziest reasons your employees have called in sick.

Is your company struggling to hold on to top talent? Adding these four employee benefits to your company’s benefits packages may help lower your turnover rates.

Financial wellness programs are only beneficial to companies if employees are motivated to use them. Here are some ideas for overcoming the common hurdles to creating an effective, transformational financial wellness program.

Frequent relocations and deployments can create financial hardships for military members and their families. The Federal Trade Commission is stepping up to help them manage their money and make important financial decisions.

The U.S. is the only developed nation that doesn’t guarantee a temporary paid leave for new parents. However, in states with paid parental leave laws, businesses report no negative impacts of profitability or productivity, and found such policies improved employee morale.

There’s more to employee benefits than just providing medical insurance. A recent study found that employees enrolled in more than three nonmedical benefits are more likely to feel financially secure.

Financial stress isn’t just an American problem. A recent survey in the U.K. found that 31 percent of people say financial issues are their top cause of stress and 63 percent lose sleep over their finances.

Small business owners often have difficulty finding employee benefits vendors who want to work with them. New companies are stepping up to bridge that gap and help small business owners streamline their benefits, HR and payroll services.

Did you find this Best Money Moves roundup useful? Please let us know. Email us at info@bestmoneymoves.com.

Open Enrollment and Financial Stress: What Employees Need to Know

by Ilyce Glink | Nov 2, 2016 | Blog

One of the biggest sources of financial stress Americans face is healthcare: both finding the coverage they need and the cost of obtaining it.

Open enrollment season for the US Health Insurance Marketplace is here and it’s time for those employees without adequate coverage (an estimated 13.8 million) to choose their plans and prepare for the associated costs. Unfortunately, this period can cause confusion and financial stress, especially if your workers don’t have a clear understanding of what they need to do and how much it will cost.

Here are some of the biggest issues that come up during enrollment season and what you can do to guide your employees through this process.

1. Deciding between old and new healthcare coverage

Open enrollment is the time of year when your employees are able to choose a new healthcare plan that covers their medical needs and, if the employer will pay for it, those of their family. Unfortunately, the easiest option is to not make any changes at all, and simply proceed with the same plan from last year. For many employees, this could mean overpaying or paying for coverage they don’t need. Your workers will then stress their budgets and leave themselves vulnerable in the event they need care for which they don’t have coverage.

The best way to conquer this hurdle is to ensure your employees are aware of their options and their responsibility to choose a plan. If you don’t provide this benefit, encourage your employees to compare new plan options to their current coverage by sending them to Healthcare.gov. That way, they can get started with the right resources and see if there’s a better plan option for them.

2. Figuring out what’s affordable and adequate

Once your workers know where to start, they’ll need to find the best coverage for their health needs. This should start with them reviewing their prior plan, seeing which coverage they still need and determining if there’s any coverage they no longer want or something new they need. Health Insurance Marketplace plans all cover things like pre-existing conditions and preventive care, so your workers don’t need to concern themselves with missing out on these offerings.

Your employees do need to worry about whether they can afford the coverage they want. Often – unless there’s an ongoing medical issue for which an employee needs specific coverage or they require a plan for their dependents or they want to keep the same doctors or providers – the most common issue is choosing between plans with higher deductibles or higher premiums.

A higher deductible means their budget is less stressed now, but costs may have to be covered out of pocket when they receive care, whereas a higher premium adds to their monthly bill now but often means lower out-of-pocket costs for future care. Finding the right balance can help lower their level of financial stress.

3. Understanding the deadlines and penalties

In addition to understanding their coverage, your employees must be aware of the deadlines for choosing a plan and the penalty for going without.

The current enrollment season runs from November 1, 2016 through January 31, 2017, though employees must choose a plan by December 15th in order for it to be effective starting January 1.

Your workers must meet these deadlines or they’ll risk having to pay a penalty of at least $695 on their federal tax returns for not having healthcare coverage. That fee could be even higher as it can also be calculated as a percentage of their income (2.5 percent in 2016).

This is a substantial bill, especially when you consider how little most Americans save. If you want your workers to avoid this additional financial stressor, take the time now to help them find the right health care coverage.

For more information about Best Money Moves, email info@bestmoneymoves.com.

How Many Americans Struggle with Financial Stress? The Answer May Surprise You

by Emily Pfund | Oct 28, 2016 | Blog

How many Americans struggle with financial stress? The answer may surprise you. Even though the Great Recession is mostly behind us, the majority of Americans are still stressing out about their finances.

In a recent study by Northwestern Mutual, 85 percent of people surveyed said they feel financial anxiety and 28 percent said they worry about their finances every day. On top of that, 36 percent said their stress about financial issues has increased, rather than decreased, over the last three years.

That’s a lot of financial angst. It takes a toll, and not just in one area of your life. Northwestern Mutual asked these financially stressed adults how their financial stress impacts the rest of their lives and here’s what they said:

70 percent said it’s negatively impacting their happiness
70 percent said it’s negatively impacting their moods
69 percent said it’s negatively impacting their ability to pursue their dreams or interests
67 percent said it’s negatively impacting their health
61 percent said it’s negatively impacting their home life
51 percent said it’s negatively impacting their social life
41 percent said it’s negatively impacting their career

Basically, the study found that stress and anxiety about your finances bleed into almost every other facet of your life. It’s difficult to focus on your job or enjoy downtime with friends and family if your focus is always on your money and how you’ll make ends meet this month. And, money continues to be the top-cited factor in divorce.

An employee’s financial stress impacts the people around them at work too. For example, A report from Health Affairs found that employees reporting high levels of stress cost their employers an average of $413 more per year than their more relaxed coworkers, according to the Consumer Finance Protection Bureau. Add that to the business costs of a stressed employee’s reduced productivity, and employers have a big interest in seeing that their employees are financially stable.

The CFPB’s report also cites a study that found employees who underwent nine hours of classroom financial wellness training and had up to five one-on-one counseling sessions with a financial planner measurably improved their financial health. Employee’s requests for loans from their 401(k) accounts – often a last-ditch attempt to make ends meet – stopped entirely and their installment debts decreased by 14 percent. They were also less likely to be paying their bills late.

We know that financial stress isn’t limited to your finances. That’s why the Best Money Moves team is so dedicated to helping people dial down the root causes of financial stress. We ask employees to tell us what’s stressing them out, and we provide the information and tools they need to target that stress point and relieve it, whether they need to get out of debt, build a savings safety net or work toward their financial goals. If they ever need guidance along the way, our accredited Money Coaches are just a phone call away, 24 hours a day.

Want to try it for yourself? Email us at info@bestmoneymoves.com to get a free trial!

Having a Hard Time Saving Money? So is Everyone Else

by Ilyce Glink | Oct 19, 2016 | Blog

Are you having a hard time saving money? Well, saving money doesn’t come easily for anyone, whether it’s a retirement account or an emergency fund. But it turns out most people are struggling with it as much – or more – than you.

A recent survey from GoBankingRates found that making more money doesn’t mean you necessarily have more money stashed away. And that’s true even if you earn nearly $100,000. This is a big problem, since having some savings can protect your overall personal finances from unexpected (and unpleasant) surprises.

Here are some of the reasons employees at all income levels face issues putting money away, and how employers can help them correct their habits.

A universal problem putting money away

According to the survey, more than 70 percent of Americans making less than $25,000 a year have less than $1,000 in savings. The numbers are nearly identical for employees earning $50,000 – or even $75,000 – annually. Clearly, the problem isn’t just the amount of take home pay.

It can be confusing for employees in a lower income bracket to think those making double or triple their salary could still be living paycheck-to-paycheck. Many people likely think a decent raise in pay would solve all of their money problems, but it seems that for a majority of employees as their pay goes up, so does their spending.

Stress caused by a lack of savings

Without adequate savings, your employees are at the mercy of any unexpected expenses or changes to their budget. An injury, car problem or home repair could throw their finances out of whack and put them at risk of missing other bills and monthly payments or racking up debt to cover these costs.

Counting on the next paycheck to get by means there’s never a chance to build up a safety net and there are several factors creating this problem.

When an employee’s spending rises along with their salary, they experience ‘lifestyle inflation’ and in some ways it’s understandable. A promotion or raise typically means a change in stature, so your employees might feel social pressure to upgrade their lifestyle along with their income. Or, employees could be facing a barrage of monthly expenses – including student debt along with rent and utilities – that eats up nearly as much of their now slightly bigger (after taxes are taken out) check.

No matter what the temporary financial stress, the underlying problem is often a lack of financial education. It doesn’t matter how much your workers earn; if they can’t manage their money well enough to get ahead of the ball, they’ll still feel financial stress.

Setting themselves up for lifelong financial stress

For some employees, this creates a daily problem of financial stress, but the bigger issue is that it’s setting them up for a lifetime of anxiety. Employees who can’t or don’t save will face difficult choices today for sure, but also even more complicated decisions as they near retirement – a second survey by GoBankingRates showed more than half of Americans have less than $10,000 saved for retirement. These workers may have to delay retirement, drastically alter their retirement plans or seek assistance from family, consequently hurting their relatives’ savings goals.

Financial stress forces your workers to think very short-term: making it until the next paycheck or covering the next set of monthly bills. But the less action they take to fix these problems now, the more they end up hurting their future selves.

For more information about Best Money Moves, email info@bestmoneymoves.com.

How to Help Prevent – and Recover From – Identity Theft

by Ilyce Glink | Oct 12, 2016 | Blog

Financial stress in the workplace often comes directly from worries about the unexpected: job loss, surprise expenses or injuries. Identity theft and fraud are becoming an increasingly common source of financial worry for employees.

According to a recent survey from Bankrate, 41 million adults in the US have been a victim of identity theft and 49 million more know someone who has been victimized. This crime is sometimes unavoidable and recovering from it takes a serious toll, both emotionally and financially.

Here are some of the ways identity theft causes stress for employees and some steps employers can take to help educate their workers.

Financial stress from identity theft

The number of ways identity theft and fraud can happen are startling – from a parent running up debts in a child’s name to a stranger abusing personal information from a data breach – and once an employee is victimized, the financial stress sets in.

A recent survey reported by HSB showed that more than a third of Americans had been the victim of a cybercrime in the past year, including the hacking of their personal information and their data being held for ransom. In nearly a quarter of these incidents, the victim spent up to $5,000 of their own money repairing the damage, while more than half spent up to $500. In fact, $15 billion was stolen through identity fraud last year in the US alone. This sudden major expense causes extreme financial stress for victims, in addition to the emotional anxiety of having their information abused.

A long recovery means drawn-out stress

This stress is often prolonged, as victims of identity theft face a difficult path to recovery that doesn’t happen overnight. If an employee of yours had their identity stolen, they might have their checking account emptied, debt transferred onto a credit card in their name or a mortgage opened using their credit. Their recovery process could include getting a police report, filing an identity theft report, ordering their credit reports and requesting fraud alerts or security freezes, even dealing with debt collectors and loan servicers looking to collect payments for fraudulent accounts, all while having to keep a careful eye on every one of their financial accounts for the foreseeable future.

It can take years for a victim to restore their credit and finances, often without any sort of explanation for how they became a victim. The Bureau of Justice Statistics’ most recent report claimed 68 percent of identity theft victims had no idea how the perpetrator got ahold of their personal information, leaving them still feeling vulnerable. If your workers are dealing with this kind of stress, whether it’s an ongoing abuse of their identity or paying thousands of dollars to restore the damage caused by fraud, the anxiety doesn’t go away once they arrive at work.

Steps for employers to take

Your employees would certainly appreciate your understanding if they’re facing these issues, but they can also use your help. Workers of all ages can be victims and the less familiar they are with digital security, the more at risk they’ll be. Educate your employees about good digital habits – like using strong, unique passwords for every account and reviewing accounts on a regular basis for fraud – that can be applied to both the workplace and their personal lives. We’ve already seen that regular reminders can help change your workers’ habits, so encourage them to change passwords frequently and stay on top of their financial accounts.

You can also talk about risks like computer viruses, phishing attacks and ransomware, all of which can be used to steal data in or out of the workplace. Prevention is a major part of protection against identity theft and the more your workers know, the more prepared they’ll be to react appropriately and manage the financial stress that accompanies this crime.

Your workers can’t make the right decisions if they don’t have the knowledge they need both before and after their identity has been abused. When financial stress hits, having a guide is helpful, which is why providing the right resources is one of your best options to assist them.