In benefit costs analysis advisors should be aware of the cost allocation of health and welfare premiums and its impact on the consumer – the employee and the employer. For those employers covered by the Affordable Care Act, an employer-sponsored plan is considered affordable in 2024 if the employee’s share of the premiums is no more than 8.39% of household income, modified adjusted gross income, as defined in the ACA.
A living wage is what is needed for an individual or family to cover basic needs including food, childcare, housing, transportation, and health insurance. A typical gross-to-net income distribution may look similar to the following living wage breakdown:

100% Gross Income
-43% Housing & Debt (DTI Ratio)
-30% Income Tax (Est. Federal and State)
-9.5% Health Insurance Premium
-10% Savings/Tithing
+ 7.5% Left to Live On

Some employers may wonder why it is their job to be concerned about the financial wellbeing of its employees. The reason is because of the ripple effect. The impact of one affects the other, whether positive or negative.

EMPLOYEE PHYSICAL SYMPTOMS	EMPLOYEE WORK SYMPTOMS	EMPLOYER SYMPTOMS
Depression	Absenteeism	H & W Rate Increases
Self-medication	Tardiness	Workers Comp Rate Increases
Stress	Hostile Demeanor	Overtime Increases
Anxiety	Reduced Productivity	Additional Temp Workers
Sleeping issues	Longer Breaks	Lost Sales
Fatigue	Theft	Late Deliveries
Digestive problems	Frequent Personal Calls	Vendor Disruption
Unhealthy weight gain/loss	Substance Abuse	Customer Dissatisfaction
Memory/concentration issues	Wage Garnishments & 401k loans	Lost Revenue
Increased blood pressure	Accidents
Distractions	Accidents

Building a financial wellbeing plan

The financial wellbeing component of having a productive and healthy work environment begins with an assessment of the needs of the employee and the supporting plans that are currently in place. The following diagram provides a starting point for assessing the path to financial success for the employer and the employee.
wellbering.jpg (1035x919, AR: 1.13)Employees are expected to figure out key components of their personal finances with limited to no guidance from their employers. Living in an era where financial stress is pervasive, rethinking workplace financial wellness programs is no longer an option — it's a necessity.

Instant Insights /

Building a cohesive financial wellbeing strategy for employers and employees

More From HR Executive

Related Stories

Recommended For You