Proposed Legislation Would Create $20M Fund for Portable Benefits
The Portable Benefits for Independent Workers Pilot Program Act would establish a $20 million grant fund within the U.S. Department of Labor to incentivize states, localities, and nonprofit organizations to experiment with portable benefits models for the independent workforce.
What are Portable Benefits Models?
Portable benefits are tied to the employee, rather than the employer. Versions of benefits portability have been around for quite some time, so this is not exactly a new concept. For Example, Consolidated Omnibus Budget Reconciliation Act (COBRA), allows an employee to continue their healthcare coverage if they leave an employer, for some duration and the Employee Retirement Income Security Act of 1974 (ERISA) allows employees to take their retirement plans with them when they go, as well.
The funds will be allocated to design, implement, and evaluate new models ($15 million) or assess and improve existing models ($5 million) for independent workers. Models should provide work-related benefits and protections — such as retirement savings, workers compensation, life or disability insurance, sick leave, training and educational benefits, health care and more.
In 2022, we are seeing more of the American workforce move to independent contract work and part-time work than we have seen in decades past. This overall workforce shift makes portable benefit models more in demand and could help “gig” workers received paid holidays and health insurance. The proposed bill will also give cities and states the ability to customize their individual benefits plan for these workers.
https://www.engadget.com/senate-bill-portable-benefits-025251733.html
What is the Role of Pharmacy Benefit Managers (PBMs)?
What is the Role of Pharmacy Benefit Managers (PBMs)?
Competition for quality workers is still going strong in our post-pandemic market and 68% of American workers are somewhat worried (37%) or very worried (31%) about their financial security, according to a recent study from Prudential. One-third of employees said financial stress impacted their job performance, while 55% of workers spent more time worrying about their finances during the workday than before the pandemic.*
Employees are seeking flexible work arrangements, affordable benefits and programs that support their financial, physical, and emotional well-being. While workers may feel confident asking for affordable healthcare and better work-life balance; many U.S. workers are not comfortable admitting or discussing they need help with their finances.
Financial stress in your employees’ personal life takes a toll on their physical and mental health. According to the American Psychological Association, chronic financial stress can lead to depression, insomnia, anxiety, heart disease and diabetes. Consider these recent statistics that show how Americans are struggling with their finances:
USI chart https://www.usi.com/executive-insights
Employees may not be speaking up, but statistics show a need for financial wellness programs. Programs that offer more than online retirement calculators or sessions with investment specialists. Employees need a financial well-being program that helps them improve their ability to live within a budget, reduce debt and save for the future.
A 2020 survey by the Society for Human Resource Management found that workers with financial concerns are 2.3 times more likely to seek a new job. Retention of key employees is always in the best interest of your business. Providing a financial wellness program can save you turnover and improve employee performance.
What are some of the key benefits employers can offer to help their employees gain access to financial wellness? Retirement plans and contributions are always top of the list. Offering matched 401k’s and stock options are a great place to start but if employees can’t make their day-to-day ends meet or are crippled by debt – it’s hard for them to focus on retirement.
Earned wage access programs for a paycheck advance could provide relief and help strapped employees meet a car payment or prevent a bill from going past due. Access to low-interest payday loans or 401k loans where the payments are deducted from future paychecks over an agreed period. Access to discuss concerns with a financial advisor or debt relief program that is a third party to your current staff so privacy can be maintained.
Effectively designing a financial wellness program requires setting a strategy, establishing goals and objectives, engaging employee communications, measuring results and adjusting based on results. With a little time and advisement from some experts in implementing financial wellness programs, it’s an endeavor worth undertaking for the health of your employees and business.