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Financial Safety Nets for Employees

The reality is that many Americans worry about covering living expenses and unexpected expenses. For example, 57% of U.S. adults cannot afford a $1,000 emergency expense, according to Bankrate's Annual Emergency Fund Report. Lacking sufficient funds to pay for a major medical emergency or other urgent needs can jeopardize an employee's food and housing security for several years.

A financial safety net will mean different things to employees, depending on their age and personal financial goals. However, the following common employee benefits can offer valuable financial protection:

  • Life insurance—Employer-sponsored coverage can be offered in a variety of ways. Employers may offer a term policy, permanent coverage, or both. Though life insurance is an important asset for future financial security, many employees don't realize its importance. Teaching employees about the value of life insurance may increase loyalty to the organization as they better appreciate this benefit.

  • Disability insurance—Disability insurance has become an increasingly valuable part of a comprehensive employee benefits package. It can fill gaps in financial protection offered by other programs, such as Social Security. While employees appreciate the peace of mind they receive as their income replacement benefits are being paid, employers can use the resources offered by insurers to manage time and productivity losses and find the most effective ways to return employees to work.

  • Retirement accounts—Whether employees are close to retirement or have decades left, saving for retirement is a key component of their financial security. Offering a 401(k) account or other retirement benefits as part of employee benefits packages can increase employee loyalty, especially if employers offer a contribution match. Good retirement benefits are also a great recruitment and retention tool. However, benefits are only helpful if employees know and understand them.

  • Financial planning or coaching—Employee assistance programs support workers facing various economic challenges by offering resources and counseling. Employees with access to financial education and tools are more likely to increase their savings and make progress toward their financial goals. Furthermore, employees with a plan or access to help are less likely to feel stressed or overwhelmed by their financial situations.

  • Emergency savings fund—An emergency savings fund helps offer peace of mind and resources employees may use instead of their retirement savings or other accounts. Employers can guide starting an emergency savings fund regardless of how much employees may have for an initial investment. Many employees may believe they don't have enough money to build one. Still, employer-provided education and guidance can help them understand that even a small amount of cash can help start an emergency savings fund. An alternative approach for employers may be to offer an employer-sponsored emergency savings account alongside traditional benefits. Although an emergency savings account is a top benefit wish of many employees, very few employers offer them. Still, by helping employees build emergency savings funds, employers can boost their workers' confidence in navigating finances and increase happiness in the workplace.

  • Student loan debt assistance—Student loan debt weighs heavy on many employees in the United States. Still, some employers try to help by offering student loan debt assistance. In addition, employers can provide various forms of support beyond loan repayments, such as student loan payment counseling, third-party low-interest or interest-free educational loans, debt consolidation, and refinancing services.

NY Small Health has a team of friendly experts to help you navigate the thick, murky waters of commercial health insurance and group plans to help you get the most bang for your buck and score great benefits for your staff.

For more information on your business's health benefits and insurance options, especially if your company is located in New York, click here.

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