Source of Truth: Recession fears present an opportunity for employers to lend support
Published on November 10th, 2022
As we enter a period of economic uncertainty, many employees naturally have concerns about their financial and job security. With inflation significantly outpacing wage growth, the prevalent trend is that consumers are more focused on short-term expenses than long-term investments. In a recent study conducted by Alegeus, nearly half of respondents say that economic uncertainty will impact how much they plan to contribute into their consumer-directed health (CDH) account. In contrast, COVID-19 had far less of an impact on CDH account contributions, as 74 percent say they maintained the same investment choices since prior to the pandemic.
This increased insecurity paired with open enrollment season is causing workers to reconsider employer-sponsored benefits choices, especially their personal strategies around CDH accounts like health savings accounts (HSAs) and flexible spending accounts (FSAs).
Where should employers focus their resources?
According to research firm Hearts & Wallets, two thirds of Millennials & Gen X turn to their employers for investment advice. Since these are the two largest generations in the workforce, this presents a huge opportunity for employers to provide the proper education regarding investments and benefits. Of Alegeus survey respondents who receive healthcare benefits through their job, 65 percent say that their employer was somewhat or very helpful with providing resources to help them make informed decisions about their healthcare plan.
Employers can help employees further by offering increasingly popular lifestyle benefits. As cost-saving priorities for employees are focused more on everyday expenses rather than long-term investments, lifestyle benefits that support employees with flexible and personalized options like healthy food and travel funds can make a big difference. Employers can then 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.
HSAs offer value in the near and long-term
Pairing a high-deductible health plan (HDHP) with an HSA can help employees save money in more ways than one. In the short term, setting aside pre-tax dollars to cover expected healthcare expenses saves consumers an average of 30 percent. For the future, an HSA with investment capabilities – such as those found with Alegeus’ WealthCare Saver investment solution – gives consumers an easy and intuitive way to invest and grow their savings over time.
With WealthCare Saver, for instance, participants can tailor their investment journey to fit their needs and experience level. Novice investors can rely on an advisor tool to make investment choices aligned with their unique risk profile, while seasoned investors have the option to research and trade stocks and funds available on the NYSE. Participants can also select from different investing models and switch at any time.
Each employee is different, and how they will prepare for and adapt to economic uncertainty will vary. There are many ways that employers can provide support for their employees through this time, and we mentioned just a few above that you can take advantage of now.
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.