Guest Blog Post: Denise Winston – How Improving Health Literacy and Financial Wellness Improves Lives

Guest Blog Post: Denise Winston – How Improving Health Literacy and Financial Wellness Improves Lives

Denise Winston

Denise Winston

Most employees are not financial planners, financial experts, or health care specialists. Yet we expect them to make decisions about tens of thousands of dollars each year in the form of health insurance, health savings accounts, 401(k) plans, and other employee benefits – on top of the other six to 10 financial decisions they make each day. Unfortunately, employees often make decisions on sophisticated and complex health and financial situations with very little or no education.

April is National Financial Literacy Month

National financial literacy month (dubbed Financial Capability Month in Minnesota) is recognized in the U.S. in April to highlight the importance of establishing and maintaining healthy financial habits. To learn more about related events, visit This website also includes a variety of free consumer education tools.

Understanding the Facts

  • At 62 percent, medical bills are the leading cause of personal bankruptcy in the U.S. (72 percent of those had medical insurance.)1
  • About 64 percent of Americans report that money is their number one stressor.2
  • Financial stress lowers IQ by 13 points.3
  • On average, financial stress costs businesses $5,000 in lost productivity per employee per year.4
  • About two-in-four people (52 percent) have less than $1,000 to pay for out-of-pocket expenses associated with an unexpected illness or accident.5
  • Up to two-thirds of working Americans are living paycheck-to-paycheck.

The Numbers: How Income is Typically Allocated (Although Most Employees Likely Don’t Know It!)

100% Gross Income

– 43% Debt: Lenders allow a back-end debt-to-income ratio (DTI) of 43 percent. This means 43 percent of gross income can be used to service housing costs and debt (car payments, student loans, credit card minimum payments, child support, and other loan payments).

– 30% Taxes: Those in a 30 percent tax bracket will have 30 percent of gross income coming out of their paychecks to cover taxes.

– 9.5% Health Insurance Premiums: The ACA mandate states that every American obtain health insurance, with very few exceptions. It is deemed affordable as long as premiums do not exceed 9.5 percent of income (not including deductibles, co-pays, etc.).

10% Savings: At least 10 percent of income should be placed in savings for emergencies and retirement.

7.5% Left to Live On: That leaves just 7.5 percent left to live on (food, clothing, utilities, transportation costs, entertainment, and everything else we need and want).

Employer Action Steps

There are things employers can do to raise health literacy and financial wellness levels among employees, enabling them to make informed decisions and improve their quality of life.

Recognize the impact of health and financial stress: Understand how stressors are affecting your employees’ lives and productivity at work.  It is important to remember that financial stress can suppresses the immune system and put pressure on relationships, which affects overall health and wellness.

Establish an education strategy: Build a strategy designed to improve health literacy and financial wellness. Make outreach initiatives personal, find a champion, tell stories, and get expert help.

Use creative and engaging communications:

  • Use the magic number of three (chunk information like a phone number)
  • Use positive words (brand-new, advanced, additional options, personalized)
  • Keep communications simple (small words, short sentences, real examples)
  • Provide educational information that is readily available, and easy to use and understand (video, audio, bullet points)
  • Consider the unique cultural needs of your workforce.

Tap proven health and financial literacy programs: Check with your brokers/agents, carriers, other vendors, and independent resources to learn about proven health literacy and financial wellness programs.

Let technology help you: Learn to use benefit and HR admin systems, HR support and resource tools, mobile apps, and online courses, to your best advantage.

A Look at Health Literacy

Medical experts agree: A patient’s health literacy – the ability to understand medical language, actively listen, analyze treatment plans, make daily decisions and ask health providers relevant questions – affects health outcomes and medical adherence. In fact, patients with the lowest personal health care management skill levels and confidence incurred costs averaging up to 21 percent higher than patients with the highest skill levels.

Here are some resources to help you boost health literacy among your employees:

  • NBCH Action Briefs. As a member of the National Business Coalition on Health, The Action Group makes well over a dozen Action Briefs available to members and non-members.
  • Choosing Wisely®. These materials help engage employers, physicians and patients in conversations aimed at reducing unnecessary medical tests and procedures. Click here to learn more about how you can use Choosing Wisely to improve health literacy.

A Look at Financial Wellness

It’s estimated that financially stressed employees spend 20 hours per month on the job worrying and dealing with personal financial issues. Their minds are not on their work, and that not only has a negative impact on profitability, but also on business relationships and the overall business environment.

Organizations can save $3 for each dollar they spend on financial wellness.6
An effective health literacy and financial wellness program can be to your health insurance premiums what a safety program is to your workers’ compensation premiums — a way to control costs and be a benefit that helps everyone.

Additional ways financially stressed employees eat into profitability:

  • Absenteeism
  • Tardiness
  • Long breaks
  • Theft
  • Overtime abuse
  • Frequent phone calls
  • Increased request for 401(k) loans and hardship withdrawals
  • Wage garnishments
  • Employee retention

The good news is, working together, employers and employees can rein in health care costs and improve health and productivity through a well-designed health literacy and financial wellness program. A quality program will be unbiased, scalable and customizable, and will allow employees to assess, learn and act.

Recent articles of interest:

Denise Winston is the founder of Money Starts Here, a financial education company.


1 Harvard University study, 2007
2 American Psychological Association, 2015
3 Princeton University research by William Stewart Tod, professor of psychology, 2013
4 Federal Reserve Study, 2010
5 Aflac, 2015
6 Consumer Financial Protection Bureau report, 2014