Insecurity forcing workers to look at their benefits

WALTHAM, Mass.--(BUSINESS WIRE)--As annual open enrollment (OE) shifts into full swing, a new survey commissioned by Alegeus shows that increasing financial and job insecurity are forcing employees to consider their employer-sponsored benefits choices, especially their personal strategies around consumer-driven health (CDH) accounts like health savings accounts (HSAs) and flexible spending accounts (FSAs).

The survey of 1,175 U.S. adult consumers found that of the 25 percent of respondents who have a CDH account, nearly half (47%) say this economic uncertainty has impacted how much they plan to put in their account. In contrast, COVID-19 has had far less impact on CDH account contributions, as 74 percent say they have maintained the same investment choices since prior to the pandemic.

In 2021, U.S. consumers spent $491 billion on out

of pocket (OOP) healthcare costs, according to healthcare market research group Kalorama Information. Yet even though tax-advantaged healthcare accounts (FSAs, HSAs, HRAs) are widely offered, only $95 billion of those expenses were paid for with pre-tax dollars, with the remaining $396 billion paid for with post-tax dollars, according to Aite-Novarica. This means consumers and employers are missing out on billions in tax savings (~30% state/federal tax savings for consumers, 7.165% FICA savings for employers). In a year in which wallets have been pinched and consumers are potentially contributing less to their accounts, employers have a big opportunity to step up and reinforce the tax-saving value of these programs, which can help consumers get better value on the dollars they are already spending.

Meanwhile, respondents are prioritizing costs elsewhere, ranking grocery (42%) and gas/transportation (32%) prices as areas where they are cutting back due to inflation. These findings point to an increasingly prevalent trend that consumers are more

focused on short-term expenses than long-term investments—as echoed in recent findings.

With the workplace becoming more involved in its employees’ financial wellbeing, employers are in a unique position to provide guidance and solutions. Of those respondents who receive their healthcare benefits through their employer, 65 percent say that their employer was somewhat or very helpful with providing resources to help them make informed decisions about their healthcare plan.

However, for employers, it shouldn’t stop there. As cost-saving priorities for employees are focused on everyday expenses rather than long-term investments, employers should look toward increasingly popular lifestyle benefits that can support employees with flexible and personalized options like healthy food and travel funds. Then employers can use important times—such as open enrollment—to direct employees’ attention to long-term investments, like HSAs, which can support them in ways they may not realize.

To learn more about strategies for open enrollment and other resources, visit: www.alegeus.com/insights/.

Methodology

The results mentioned above are from an online survey that was fielded from October 14-16, 2022, by independent research firm Researchscape. There were 1,175 U.S. respondents to the survey.