Medical debt weighs on workers’ mental health
Debt incurred outside of one’s control, including medical debt, is associated with higher incidence of mental health issues.
94% of respondents to a new MarketWatch survey say “they sacrifice their mental health to get by financially, with 92% saying financial stress has caused adverse physical effects (e.g., loss of sleep, headaches, etc.).”
It’s an astonishing data point when you think about it. There’s more.
“In an era where high costs for essential goods are tightening budgets, nearly half of Americans (47%) say 2024 has been the most stressful year of their lives financially.”
So, many of your employees are more stressed about money than ever before. And it’s harming their mental health and productivity and your bottom line and social impact.
Mental health includes financial health
Mental health includes financial health, as financial stress is a leading cause of anxiety and depression among workers.
According to the American Psychological Association, financial worries are a top stressor for many Americans, contributing to a host of mental health issues such as chronic stress, depression, and anxiety, to which the above-mentioned MarketWatch survey respondents can testify.
The burden of debt, insufficient savings, and the uncertainty of financial stability create a continuous loop of worry that erodes mental well-being.
When employees are mentally distressed due to financial problems, their productivity at work suffers. They may struggle with concentration, decision-making, and overall job performance.
Absenteeism and presenteeism rise, leading to a decline in overall workplace productivity. This creates a ripple effect, where the entire organization feels the impact of one individual’s financial stress.
And it turns out, some financial stressors are worse than others, when it comes to their impact on mental health. Wise employers are paying attention.
Medical debt correlated with lower mental health
“Medical debt especially stands out as an area of concern,” according to Financial Health Network’s august, “Understanding the Mental-Financial Health Connection:”
“Holding medical debt is clearly correlated with lower mental health. People with medical debt are three times as likely to have mental health conditions, like anxiety, depression, or stress. Further, people holding medical debt report avoiding further medical care, skipping bills, and even delaying college or home ownership at elevated rates. Given the wide range of impacts of medical debt on an individual’s health, life quality, and outcomes, many public health researchers consider medical debt to be a social determinant of health — that is, a non-medical condition that shapes an individual’s health, well-being, and quality of life.”
These findings align with recently completed research by Neighborhood Trust (of which we, TrustPlus, are a solution) and Undue Medical Debt which found the following, among other insights:
Insurance alone is not enough: Workers with employer-provided health insurance still reported high rates of medical debt (70%), risk of accruing future medical debt (40%), and stress due to medical debt (40%).
Majority struggle to afford prescriptions: Over 60% of workers with coverage through their employer reported struggling to afford prescription medications.
Confusion reigns, costing you money: Nearly half of workers with employer-provided health insurance reported struggling to understand their coverage: Confusion around insurance or complementary benefits equals a lower ROI on your employer healthcare benefit spending, when workers are not equipped to make use of the benefits available to them.
Given the profound connection between financial health and mental well-being, employers have a vested interest in supporting your employees’ financial health, especially when it comes to addressing medical debt.
Personal financial coaching as mental health benefit
One of the most effective ways to support the financial health of your workers is through personal financial coaching.
By providing expert guidance, resources, and product recommendations, TrustPlus personal financial coaches help employees manage debt, improve credit, and build savings, easing their everyday financial stress.
Among the benefits of personal financial coaching:
Improved mental health and well-being: Personal financial coaching equips employees with the knowledge and tools to manage their money better, reducing stress and anxiety associated with financial insecurity. When employees feel more secure about their finances, their overall mental health improves, leading to enhanced job satisfaction and a more positive workplace atmosphere.
Increased productivity: Employees who are not preoccupied with financial worries are more focused and engaged at work. This heightened productivity translates into better performance, higher quality of work, and increased innovation and creativity.
Reduced turnover: Financial stress is a significant factor in job dissatisfaction, which can lead to higher turnover rates. By addressing financial wellness, employers can increase employee loyalty and reduce the costs associated with recruiting and training new staff.
Enhanced employer reputation: Companies that invest in the holistic well-being of their employees, including financial health, are viewed more favorably by both current employees and potential hires. This reputation can attract top talent and foster a culture of care and support within the organization.
Just imagine, being known as the employer who invests in the financial and mental health of your workers, who addresses head on workers’ biggest stressor, money, and among their most pernicious financial stressors, medical debt.
And as the one who captured for your organization the talent, profit, and impact benefits of a financially healthy workforce, amidst the most financially stressful time of many of your workers’ lives.
Schedule a time with TrustPlus to discuss easing the everyday financial stress of your workers and capturing the benefits of a financially healthy workforce.
