HR and benefits professionals might be surprised to find out — if they asked — just how on the edge financially their employees are … and how many of them in these dire straits there really are. They also might raise an eyebrow or two to learn how many on-the-edge workers actually don’t think a debilitating or catastrophic event could impact them or their family.
Such was the warning from Audrey Tillman, executive vice president of corporate services at the Columbus, Ga.-based supplemental and guaranteed-renewable insurance provider, in an interview Monday. She was referring to the results of a study released earlier this month, conducted by Harris Interactive on behalf of Aflac.
The 2011 Aflac WorkForces Report shows 51 percent of American workers say they are not very, or not at all, prepared to pay for out-of-pocket expenses not covered by major-medical insurance. What’s more, six out of 10 workers do not have a financial plan in place to deal with an unexpected and costly life event, such as a medical emergency. And 31 percent have less than $500 in savings for emergency expenses.
“Remember, these are people who are working!” Tillman says. “These are the people one would assume have some sort of financial stability. We found these statistics startling.”
The study also finds that only 19 percent of employees think it’s likely that they or a family member will ever be diagnosed with a chronic illness, such as heart disease or diabetes, and only 13 percent say they think a serious illness, such as cancer, will ever occur or that there will be a need for long-term care.
Yet, according to the National Safety Council, more than 25 million people in the United States suffered accident-related disabling injuries in 2008 and the American Heart Association reports nearly one in three deaths in 2006 was caused by a form of cardiovascular disease. “So, clearly, these things are happening,” says Tillman.
Worse still, “about half of the workers we surveyed said they’re already struggling with financial stress, and again, remember, these are the people who are working,” she says. “These surveyed employees are real people in the workforce.”
When asked how they would pay for out-of-pocket expenses due to an unexpected illness, 44 percent said they would have to borrow from family or friends, tap retirement savings or use a credit card.
And, for the clincher, 19 percent — one out of five people — have no idea how they would cover the costs.
Aflac products and services aside, says Tillman, this should sound a reverberating wake-up call to employers to take a fresh account of the benefits they’re providing and, in this economy, with so many Americans living on the edge, “make sure the benefits they are providing really make a difference and are really providing that safety net” so desperately needed right now.
“What this says to me as an HR executive is that it’s time many of us survey our employees to find out where the real needs are,” she says. “We should be taking a new look with a critical eye, through our own research and workforce analysis, to become fully aware of what really impacts people.”
Supplemental insurance, for instance, which could mean the difference between financial ruin and recovery in the event of a catastrophe, and which a significant number of employers still don’t offer, “may have to be added in place of something else that may not seem so critical in this economy,” says Tillman.
“The pressure has been on HR to hold the line and cut back on costs,” she says. “This may not feel to an HR executive like a good time to revolutionize the system.”
But workers whose employers provide for them when catastrophe strikes, she adds, will not only stay on as productive workers in the long run, “they’ll become champions for that company.”