Why Your Healthcare or Benefits Product Falls Short Without Financial Wellness
Research Report by CARAVAN Wellness
Executive Summary
Healthcare and traditional benefits are core elements of any employer benefits strategy. They provide access to care, support physical health, and help manage risk. But on their own, they are not enough.
Today’s workforce is under serious financial stress, and it affects far more than people’s personal finances. Financial strain reduces employee engagement, participation in benefits, productivity, and even physical and mental health outcomes. Without financial wellness support, employees are less likely to use benefits effectively, and employers see lower return on their benefits investment.
The Financial Stress Reality
Financial stress among employees is growing. About 72% of U.S. workers report feeling somewhat stressed about their finances. 1 out of 3 people describe financial stress as very or extremely high. Nearly half of workers say they live paycheck to paycheck, and more than half report that their savings have decreased in the past year.
A separate study found that 92% of employees report financial stress, and this stress has negative impacts on both mental and physical health.
This stress carries over into the workplace:
- 56% of workers say financial stress hurts their job productivity.
- 50% report that it hurts their engagement at work.
- 66% of employees say financial stress negatively affects their work and personal life.
Why Financially Stressed Employees Struggle with Benefits
Financial stress affects behavior in predictable ways that directly undermine their use of healthcare and benefits solutions.
Decision Fatigue
Managing personal finances, health plans, HSAs, and retirement choices all compete for limited mental energy. When employees are under financial strain, they delay or avoid decisions. Many disengage from open enrollment and skip benefit education because it feels overwhelming compared to daily financial pressures.
Short-Term Focus
When money feels tight, immediate needs take priority over future planning. Healthcare prevention and long-term wellness goals lose ground to urgent concerns like rent, bills, and debt.
Low Attention
Employees under stress are significantly harder to reach. Engagement statistics show a direct correlation between financial wellbeing and benefits utilization. Employees under financial stress are far less likely to open benefits communications, explore benefit portals, or take action on educational resources.
Fear of Cost
Uncertainty about out-of-pocket costs discourages use of preventive care and healthcare services. This risk-avoidance can increase long-term costs due to delayed care and unmanaged conditions.
Reduced Trust
Financial anxiety can erode trust in employers and benefits programs. Employees who feel unsupported financially are less likely to believe benefits are designed to help them.
What Financial Wellness Brings to the Table
Financial wellness changes how employees interact with their benefits and their health.
Clear Understanding
Financial wellness education helps employees know what benefits are available and how to use them. When employees understand financial and health plan choices, they enroll earlier and use benefits more effectively.
Less Anxiety, More Engagement
Employees with better financial confidence report lower stress and higher participation in preventive care and regular health screenings. Less fear around costs increases the likelihood they will seek care when needed.
Greater ROI on Healthcare Benefits
When employees feel financially supported, they use benefits as intended. From preventive care to chronic condition management, this can reduce long-term costs.
Stronger Focus and Productivity
Workplace financial stress is linked to lower morale, reduced focus, and higher absenteeism. For example:
- 62% of organizations report that financial challenges hurt mental health.
- 42% report they affect productivity and presenteeism.
The Key Takeaways
Traditional benefits are essential but they cannot achieve their full impact in isolation. Financial wellness is no longer optional, it’s foundational.
Financial stress interferes with benefit engagement, health behavior, productivity, and trust. By integrating financial wellness into your benefits strategy, you unlock the full potential of your healthcare and benefits investments, increase participation, and improve outcomes for employees and organizations alike.
