trendspotting | PLANADVISER March/April 2017

Financial Wellness Revolution

Many of these programs now address physical health

By Javier Simon | March/April 2017
Art by Giulia Sagramola

As health care costs continue to rise and financial insecurity becomes a leading stressor for thousands of Americans, employers are adopting a more holistic approach to developing wellness programs. According to a recent survey by provider Virgin Pulse, 76% of employers now offer wellness programs that address physical, mental and financial health.

Although the financial piece is a relatively new component of total wellness programs, it was long overdue. Travis Freeman, Certified Financial Planner (CFP) and president of Four Seasons Financial Education, revealed some yet-to-be-published survey findings on how financial stress affects health.

The company found that 66% of employees who had high levels of financial stress reported feeling depressed, compared with only 17% of those with low levels. Among the group with greater financial stress, 72% reported anxiety, 46% reported sleeplessness, and 25% reported memory loss.

The latest employee financial wellness survey done by PricewaterhouseCoopers concurs with these results, finding that 52% of employees reported financial insecurity. Twenty-eight percent said it was affecting their health, and another 28% said it was a distraction at work.

Clearly, there is room for improvement in addressing employees’ financial wellness—which, if successfully undertaken, can have a positive impact on employee well-being, as well as the employer’s health care costs and return on investment (ROI).

According to a recent study by the RAND Corp., the real savings come from disease-management programs, or programs that help at-risk employees avoid chronic illnesses and employees who are chronically ill stabilize their condition.

While studying 10 years of data from a Fortune 100 employer, RAND found that disease management, as opposed to lifestyle management, accounted for 86% of hard savings in health care costs—generating $136 per member per month and a 30% reduction in hospital visits. The firm concluded that lifestyle programs such as those focusing on weight management and nutrition ultimately failed to drive significant behavioral change.

Chris Boyce, CEO of Virgin Pulse, argues that employers may be able to improve these programs’ effectiveness by leveraging technology. His firm offers clients an interactive and customizable platform along with an app that employees can use to pursue specific lifestyle goals such as being more active or getting more sleep. They can also track their progress digitally. Further, the platform promotes emotional well-being through community action—something Boyce predicts will become even more important in the years to come.

“The key is finding consumer-facing products that change behavior and that people actually like and use,” says Boyce.