Inflation is so bad that Americans are trying to save money in all the wrong ways. They’re cutting back on the things they need the most like health insurance.
Nearly half of the respondents in a new study said that “inflation is making it difficult for them to pay for their benefits.” Forty percent told The Hartford, an insurance company, that they can’t afford their benefits because of that.
This could be a financial catastrophe in their future. If you lower – or even worse, cancel – your 401k contributions, you could be losing out on thousands in years to come. Even worse, an emergency without health insurance will lead to medical debt.
“It may be that you don’t see a need right now for these benefits and maybe your budget’s a little bit tight. But you can’t predict the future,” said Dana MacKinnon, the head of relationship management strategy at The Hartford. “You need to really be thinking ahead because, unfortunately, under certain benefit plans, you could be excluded from accessing benefits if you’ve got a pre-existing condition.”
Healthy workers, healthy workplace
It’s no secret that the paperwork involved in signing up for employer-provided insurance can be hard to read through. HR offices might send out emails or host meetings to try to clear things up, but it isn’t always enough.
Most respondents told The Hartford that they don’t feel like they know as much about their benefits as they think they should. Many said that the names and descriptions of certain benefits were too complicated to understand.
“I don’t think we always do the best job educating people about how the benefits will work for them,” MacKinnon said. “The employer can really play a great educational role by providing examples of what people like me would purchase, and showing how it connects to financial security and overall financial wellness.”
Burnt out with no benefits
Medical insurance isn’t the only benefit that protects an employee’s health.
Debt.com has already reported on how inflation is making Americans sick. Most Americans are stressed about inflation and their finances – which is why they’re scaling back benefits. All of that stress can literally hurt a person’s physical health by increasing the risk of heart attacks, muscle pains, and more.
While avoiding benefits will lead to more financial stress down the road, it can also contribute to a dip in overall well-being.
A survey from Eagle Hill Consulting found that nearly half of workers aren’t using their vacation time because it would be too expensive. Even when they do take time off, most employees are still answering emails and helping out while off the clock.
Forgoing this benefit might save money but it leads to burnout and other stress-related issues.
“There’s high burnout, there’s a need to disconnect. There’s a need to take it down a notch, and still, there’s this gap,” Andrew Edelson, director at Eagle Hill, said. “We think part of this has to do with quite honestly the workload, the pressures, the operating environment, and the pressure to stay on work”
Taking the lead
It’s clear that workers aren’t actually benefiting from their benefits.
Leadership’s attitude and the culture they create in the office can lead to overworked employees who aren’t taking care of themselves – financially or personally.
Employees need clearer directions, and it’s up to HR to explain it to them.
“Better health and wellness benefits are important, right?” Edelson said. “And not just making them available and accessible, but the leadership, the organization, helping employees to create the structure, the boundaries, and the environment to recharge.”
Sometimes leadership doesn’t step up the way it needs to, but you still can. Reach out to HR for guidance on your benefits. In the meantime, create a budget and factor in insurance. There are several ways that you can minimize those costs and squeeze them in. And if you need a vacation, factor that in too. A staycation at home can still be enough to let yourself reset.
