Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Health Insurance > Health Insurance

Rising Health Care Costs Threaten Employees’ Financial Security: Merrill

By Bernice Napach

X
Your article was successfully shared with the contacts you provided.

Rising health care costs are eroding the financial security of American employees.

(Related: Retiring This Year? Here’s What You’ll Pay for Health Care)

According to a new report from Bank of America Merrill Lynch released Monday, 79% of employees surveyed reported higher health care costs in 2016 — up from 69% in 2015 — and more than half said they were either spending less overall or contributing less to fund financial goals as a result.

(Related: Health Care Costs to Swamp Social Security COLAs: HealthView Study)

Of that 56% that cut back, almost two-thirds said they were saving less for retirement, about 50% said they were reducing debt payments and almost 40% were investing less.

The supplemental report is based on an online survey of 1,242 employees conducted by Boston Research Technologies on behalf of Bank of America Merrill Lynch about a year ago for its 2017 Workplace Benefits Report. All respondents were participants in 401(k) plans, not necessarily involving Merrill, and the firm was not identified as the study’s sponsor.

(Related: 5 Shocking Facts About Retirement Health Care Costs)

The survey also found that the impact of rising health care costs on savings, investments and debt servicing contributed to employees’ financial stress, which, in turn, negatively affected the health of six in 10 respondents.

The supplement recommends that employers consider enhancing financial education for their employees so that employees understand health care options, the financial implications of their choices and how to manage health care costs. It recommends that employers consider expanding their benefits package to offer more health care management tools, such as Health Savings Accounts, which use pretax dollars to cover health care expenses and allow for tax-free withdrawals in retirement so long as withdrawals are used for medical expenses.

The report also suggests that employers consider providing employees access to a financial professional, financial education that’s tailored to their age or the issues they’re facing and expert-delivered training to help them address a funn range of financial needs, from retirement planning to savings and debt management. 

It makes no mention of whether employers should reduce health care premiums or deductibles in their plans for employees or expand additional coverage beyond including an HSA.

— Related on ThinkAdvisor:

 

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.