Jessica DePhillips, voluntary benefits principal at Mercer, offered her perspective, saying, "In the Mercer Inside Employee Minds study, we found that short-term financial strain, such as covering monthly expenses, is the number one concern at the top of employees' minds. With nearly two-thirds of the American population living paycheck to paycheck, coupled with a potential legal matter, on top of an already strained economy, that is an anxiety-producing recipe for just about anyone."

Legal issues happen – and they happen more often than you might think

There's a misconception with most consumers that legal events are rare, once-in-a-lifetime events. But they're far more prevalent than consumers might think. The study found that 85% of individuals experienced a legal event in the past three years, ranging from bankruptcy to tax disputes and adoption to credit card disputes. Many consumers are out of their element when they're in a court of law, and there's often considerable impact on their finances or family. 

The higher the stakes, the higher the stress

The study also found that the greater the severity of the legal issue and its potential financial impact, the more pressing it is to hire an attorney to help resolve it. Issues like this also come with higher levels of stress. It found that 11 of the top 15 legal events for which an attorney is most frequently hired are family-centered, making the outcome more concerning. Many of these issues also rank high on the Holmes and Rahe stress scale – like the death of a spouse or close family member, divorce or separation, and change of financial state. 

When an attorney was hired, two thirds of respondents said that it had a positive impact on the outcome of their situation. However, when looking at the access to justice gap, those experiencing legal issues – particularly with a large financial impact – may not be able to pay for attorney fees on their own. This is where a legal plan can help with overall wellbeing. 

Legal plans – also referred to as group legal insurance benefits – provide consumers with a set of services designed to protect them against a host of personal legal matters. Comprehensive legal plans work much like health insurance. For an affordable monthly premium, members have access to a network of attorneys and an array of online resources. 

DePhillips notes that legal was the voluntary benefit with the largest growth from 2020 to 2022 within the Mercer block of business. She explains, "Legal insurance is vital to a well-rounded benefit program in that it provides coverage for short and long-term financial stability and can also help with mental health and productivity.

"We know that employees who are dealing with a legal matter are most likely also dealing with a financial situation and losing productivity at work, all of which are increasing stress and most likely anxiety," she adds. "A legal program can help employees by putting their mind at ease, providing legal representation as well as savings on legal matters, so that employees can get back to the job at hand."

Uncertainty drives up stress

When navigating a legal problem, uncertainty comes from many places. Not knowing where to start, understanding the options, the potential impacts on work performance and time and money spent to resolve the situation all weigh on consumers. Those working with an attorney but without a legal plan rated their stress levels at least 24% higher for each of these factors than those who have a legal plan. 

Taking its toll at work

So how does this impact your clients' employees? Consumers who try to handle a legal situation without the benefit of a legal plan or attorney experienced more stress, more time off work and more negative impacts on their mental health. 

• 37% said addressing their legal matter had a very negative or somewhat negative impact on their performance at work.
• Only 41% of consumers in this group were able to manage their legal situation without taking time off work compared to 72% of those with a legal plan.
• Consumers without a legal plan spent an average of 2.5 hours more than expected handling their legal matter, while legal plan members spent an average of one hour less than expected. 

Implications for brokers

Stress causes around one million employees to miss work each day, costing U.S. businesses billions yearly as a result, according to a recent Zippia study. And so, employers are keenly focused on addressing the growing mental health issues impacting their employees. In fact, the majority of US employers plan to increase their investments in programs designed to promote better mental health, stress management and resilience. 

This study reinforced what we have seen through Customer Care calls and member satisfaction surveys – that many of the stressful situations employees face day-to-day can quickly become legal issues for them and their families. So far in 2023, we've seen the volume of member interactions to Customer Care increase 9% year over year.

Among the benefits employers are looking to add or expand are employee assistance programs, financial wellness, and digital health tools. Keep in mind that while these can be valuable resources, on their own they may not go far enough to address the more pressing legal issues that can arise.

For example, in working with clients, DePhillips notes that, "A common misconception I hear from employers is that they have legal under their EAP program. While many offer some type of legal assistance, their EAP does not provide an attorney to represent the employee in a legal matter or provide full coverage for legal work, like creating a will, setting up a trust or estate planning."

As you help your clients build a more holistic support system, legal insurance can be a strong complement, providing affordable counsel and peace of mind. 

As the VP, Customer Experience & Insights, Jennifer is responsible for the overall experience of ARAG's members through the research, analysis, and evaluation of current processes and future trends of both consumer expectations and industry innovations.