Inflation and the role of account-based benefits
Published on November 18th, 2022
Rising inflation has many implications for consumer spending habits. Inflation is outpacing wage growth, meaning everyday items are costing more while workers’ salaries aren’t compensating accordingly. This is especially distressing for many as we head into the holiday season. And as the annual enrollment period presents consumers with the opportunity to review their benefits, inflation fears naturally factor into their choices.
In a recent Alegeus survey, consumers shared where they are prioritizing their short- and long-term spending and investments. Nearly half of respondents said that economic uncertainty will impact how much they plan to contribute into their consumer-directed healthcare (CDH) accounts. This is significant, as COVID-19 had far less of an impact on CDH account contributions: 74 percent of respondents said they maintained the same investment choices before and during the pandemic.
This also presents an opportunity for employers to show their support through this time of economic uncertainty. By providing education and resources that highlight the cost-saving potential of a tax-advantaged benefits account, employers can help guide their employees to make decisions that benefit them now and long into the future.
Below, we share consumer insights regarding spending habits and the role of account-based benefits.