Voluntary Benefits: The mental health-financial wellness connection

Profile of a woman with her eyes closed practicing yoga on a rocky beach by the sea

For some people, financial stress and mental health are deeply connected. Worries about bills, debt, or even falling behind in savings goals may keep some people up at night. But they may have other impacts as well.

According to a 2022 Workplace Wellness Survey, 60% of respondents reported being highly or moderately concerned about their household financial well-being.1 That stress can manifest as physical and mental health symptoms, including anxiety, migraines, depression and compromised immune systems.

Yet, despite the well-documented relationship between financial and mental well-being, employers often underrate the stress that employees experience from financial instability. In doing so, they miss an opportunity to offer support via voluntary benefits that can help mitigate this stress and encourage a happier, healthier workforce. 

The mind-money connection   

More than half of all workers (52%) say that financial issues regularly stress them out.2 Saving for retirement tops the list of financial stressors, followed by having savings in case of an emergency and paying for monthly expenses.1

While this financial stress spans genders and generations, there are groups that are more impacted. Women were more likely than men to report being stressed out financially.2 And Generation X — those born between 1965 and 1981 — report being the most financially stressed age group.2  

The effects of these financial concerns extend beyond employee bank accounts and can worsen mental well-being. Consider that 46% of people who have debt also have a mental health diagnosis,3 and 86% of people with mental health issues say that debt makes their mental health issues worse.3  

Impacts on the workplace

When employees are experiencing personal financial challenges, it can impact the workplace.4 That’s because stress is distracting and can affect an employees’ engagement and ability to do their job.4 And the potential compounding effect of mental health issues, such as depression, anxiety, or stress, only adds to the above. These factors can materialize on the job. One study calculated that those employees who are worried about money account for approximately 11-14% of annual payroll costs in lost productivity and increased turnover.5

PwC’s 2022 annual financial wellness survey reports that employees with financial stress are six times more likely to say that stress impacts their work productivity and seven times more likely to say it affects their attendance.6 And in the wake of COVID-19, 59% of employees are reporting that mental wellness programs are more important now — up from 49% in 2021.6

These mental health trends should put employers on notice. Yet, even in light of the close relationship between financial stress and mental health, employers underestimate the breadth of concern among their employees. Employers surveyed last year predicted that 2% of their staff worry about finances on a regular basis when the real figure is 24% — which is an 8%-increase over last year.7

Voluntary benefits can help

Voluntary benefits offer employers a meaningful tool for helping lessen their employees’ financial stress with an eye on improving their overall well-being. Provided as a supplement to an existing benefits package, voluntary benefits can help address the financial impact of covered events or pay a benefit to a beneficiary, depending on the type of coverage.

For example, consider how insurance products such as life, disability and supplemental health pay benefits for the specific events each cover. Supplemental health insurance — accident or hospital indemnity, for instance — pays a benefit when the insured experiences specific events or treatment as the result of a covered accident or has a covered hospitalization. Benefits are paid directly to the insured and can be used as they determine such as toward out-of-pocket medical expenses or even rent or groceries. Disability income insurance is usually only offered to employees and replaces a portion of their paycheck when they can’t work for a certain period due to an injury or illness. Life insurance pays proceeds to the beneficiary when the insured dies. 

Each type of insurance coverages pays benefits specific to the coverage and coverage is often available for dependent spouses and children as well. They can offer employees the ability to enroll in benefits that speak to their specific needs. The mental health results — less financial worry — may naturally follow suit.

Lastly, offering benefit options to employees can help to show that employers value their financial and mental wellness and that they’re willing to offer solutions to improve both. This can go a long way toward improving employee morale and creating a culture where employees feel seen, understood, and supported. 

How Voya can assist employers  

Our suite of voluntary options, including Group Employee Benefits and Health Account Solutions, enables employers to directly address the dual issues of financial and mental health wellness. Plus, our emergency savings and student loan debt solutions can help address employee financial worries and put employees on track for more financial success.

To discover how our voluntary benefits may fit into your plan, contact your Voya representative today.

Neither Voya® nor its affiliated companies or representatives provide tax or legal advice. Please consult a tax adviser or attorney before making a tax-related investment/insurance decision.

Read related articles: 

  1. Employee Benefit Research Institute (EBRI)/Greenwald Research Workplace Wellness Survey (WWS), ebri.org, 2022.
  2. Connolly, Maureen and Slade, Margot. “Stress: The United States of Stress 2019.” EverydayHealth.com, Originally published October 23, 2018; Reviewed May 7, 2019.
  3. “Data Shows Strong Link Between Financial Wellness and Mental Health.” Enrich.org, the Well – a financial wellness blog by experts at Enrich, March 24, 2022.
  4. Van Eys, Patti, Ph.D. “The True Cost of Employee Financial Stress: Signs HR Should Look For.” Pathways.com blog, October 21, 2021.
  5. Schmidt, Adria. “Is Financial Stress Affecting Your Workplace? Find Out in Minutes.” NeighborhoodTrust.org, Neighborhood Trust Financial Partners, 2022.
  6. 2022 PwC Financial Wellness Survey, pwc.com.
  7. Soutar, Liam. “Financial wellbeing: Why do employers underestimate how much employees worry about money.” HRGrapevine.com, June 17, 2022.

Some products and services offered by the Voya family® of companies. Health Account Solutions, including Health Savings Accounts, Flexible Spending Accounts, Commuter Benefits, Health Reimbursement Arrangements, and COBRA Administration offered by Voya Benefits Company, LLC (in New York, doing business as Voya BC, LLC). HSA custodial services provided by an approved HSA custodian as indicated in the applicable custodial agreement. For all other products, administration services provided in part by WEX Health, Inc. 

Insurance is issued and underwritten by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Both are members of the Voya® family of companies. Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Voya Employee Benefits is a division of both companies. Product availability and specific provisions may vary by state.