Monthly Archives:
November 2018

There’s a New Way to Test Americans’ Financial Health and It’s the Most Comprehensive Yet


by Chris Byrd


Our friends at the Center for Financial Services Innovation (CFSI) have been contributing incredible work to the cause of both understanding and improving the financial health of Americans. Now, in new groundbreaking research on the financial lives of Americans, they explore this critically important issue more deeply than ever before. The report, called the U.S. Financial Health Pulse, argues that though facts are readily available on how millions of Americans are struggling with everything from credit card debit to student loans to insufficient retirement savings, it’s not enough to look at these individual markers to measure their financial health.


Instead, CFSI recommends looking at a bigger picture that considers the totality of an individual’s financial life: “Unlike abstract figures like GDP, financial health is a nuanced metric that assesses whether Americans are spending, saving, borrowing and planning in a way that will set them up to be resilient and pursue opportunities over time.” To assess financial health, CFSI has created a framework called the CFSI Financial Health Score that leverages consumer surveys and transactional data for demographic characteristics, financial behaviors and socioeconomic trends. The score sorts Americans into three financial health tiers: Financially Healthy (28 percent of Americans); Financially Coping (55 percent of Americans); and Financially Vulnerable (17 percent of Americans).


The entire report is worth a close read, but we pulled out some kernels that we think are the most relevant for WEX Health Partners:


Nearly half of Americans say their spending equaled or exceeded their income in the last 12 months.


Among respondents who said this, 43 percent said it’s because their spending was unusually high, their income was unusually low, or both. We know from other research that unplanned medical expenses are a leading cause; this squares with what 20 percent of the consumers (across the socioeconomic spectrum) who participated in our Clear Insights report earlier this year told us—that they would have to put a $1,000 unexpected medical bill on their credit card.


Low savings balances obscure the fact that many Americans are saving when and where they can.


CFSI points out that 79 percent of respondents said they are saving regularly or whenever possible in savings accounts, while 76 percent said are saving regularly or whenever possible in cash. Further, 70 percent of respondents said they are saving regularly or whenever possible in personal savings vehicles like mutual funds, money market accounts, stocks, certificates of deposit and annuities. Financially Healthy individuals reported liquid savings balances approximately four times higher than Financially Coping individuals and 30 times higher than Financially Vulnerable individuals. While many Americans lack sufficient liquid savings, it’s interesting and encouraging to learn that a full 28 percent of Americans (those in the Financially Healthy category) have money to save into tax-favored accounts that can be carried over and invested—i.e., health savings accounts (HSAs).


Forty-two percent of Financially Vulnerable individuals said debt has delayed or prevented them from seeking or receiving medical care.


With respect to the effect of health insurance on these decisions, 71 percent of Financially Vulnerable individuals and 88 percent of Financially Coping individuals have health insurance, compared with 98 percent of Financially Healthy individuals. This is key, as it shows the value of what many of us do to provide employees with an increasingly greater number of options that help employers balance and manage costs while providing safety-net coverage for employees.


Americans who experience workplace instability are falling behind as they strive for financial health.


Employees who have unpredictable schedules and volatile wages are less likely to be Financially Healthy than those who have predictable schedules and steady wages. Lower-income Americans are most affected by instability in the workplace; this group also stands to gain the most from employee-provided benefits, such as healthcare and paid leave. In so many ways, this underscores the importance of our work at WEX Health to deliver products that help minimize the volatility of unexpected healthcare spending on overall financial challenges.


For more insights on Americans’ financial health, read CFSI’s U.S. Financial Health Pulse in full here.


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  

4 Tips for Women Managing Their Family’s Healthcare Costs


by Lisa Goldkamp


It’s safe to say that, in 2018, more women are tuned in and standing up to try to make a difference in healthcare and beyond. On the heels of a U.S. midterm election where a historic number of women ran for office and won and where healthcare was the top issue for voters (per exit polls), all signs point to women taking an active role on issues that are not only important to their family’s financial and physical health, but to the healthcare issues that impact our country.

As the primary coordinator of healthcare for my family, I understand why this issue is on the minds of Americans. What I didn’t realize was that healthcare expenses are disproportionately weighing on women. A Kaiser Family Foundation survey earlier this year found that mothers are considerably more likely to manage their children’s health than fathers, and our own 2018 Clear Insights report found that women are more concerned than men about unexpected out-of-pocket healthcare costs as well as family finances overall. I always assumed that my interest in our family’s healthcare coverage and in ensuring we have available funds in our HSA account to pay our medical bills was uniquely related to my career experiences, not my gender.

In light of this and since we’re now actively in open enrollment, and the cost of healthcare is on everybody’s mind, I have a few tips to share with other women who are also managing or influencing their family’s healthcare decisions.


1. Give yourself plenty of time to evaluate the benefits plans your employer offers.

It’s very likely that your employer is offering at least one plan that would save you money on taxes by allowing you to pay for healthcare with pre-tax expenses. During open enrollment, we’ve found that 75 percent of consumers spend less than an hour evaluating their employer’s different healthcare options, but I recommend that you take all the time you need (likely more than an hour) to do your research on what’s best for your family in the year ahead.


2. Be realistic about what your family’s upcoming healthcare needs are.

It’s easy to want to just look away from medical expenses that are on the horizon, but oftentimes we do have some advance idea of what’s coming. A couple of years ago, I knew that both I and one of my children needed a surgery, and was comforted by the fact that the funds we’d been accruing in our health savings account (HSA) were there to cover both surgeries. For that reason, our family didn’t have to feel the pain of these two substantial medical expenses—to the extent where my husband didn’t even realize, until I let him know, that we had spent thousands of dollars out of pocket on the surgeries. It’s important to estimate what you know, or suspect, your family might realistically spend on medical bills in 2019, and arm yourself with that info as you’re selecting a plan during open enrollment.


3. Leverage accounts that set aside money incrementally so you don’t have to grapple with a big medical expense all at once.

Women are significantly more likely than men (43 percent vs. 20 percent) to use their HSA account to pay unexpected healthcare bills greater than $1,000, according to the Clear Insights survey. Men, meanwhile, are more likely to put unexpected medical bills on a credit card, indicating that more women have already realized the value of an HSA for setting away and accumulating money in smaller chunks so that they’re fully prepared when larger expenses arrive. HSAs are also valuable because the funds roll over indefinitely from year to year, so that you can either use them for immediate healthcare expenses or even on into retirement.


4. Imagine having to choose low cost over the best care for your family.

My kids are avid consumers of healthcare, and last month my three-year-old took a dive into the corner of our bedframe and was bleeding profusely from a gash in his forehead. Because our HSA funds had been quietly accumulating and were there when we needed them, I was able to take a moment in the midst of the chaos to decide whether we should take him to an urgent care facility, where the cost would be less but the quality of care might also be less, or to the children’s emergency room I knew and trusted. Since it was a facial laceration, I wanted to be sure he got stitches from someone highly experienced treating small (and adorable) faces. Fortunately, based on the cushion we’d built up, I was able to make a conscious decision to take him to the ER and I didn’t have to have to panic about how are we going to be able to afford this? Instead, I was able to focus on my son.


At WEX Health, we’re proud to see women take an active role in the issues and concerns related to healthcare at home and in public policy, and we’re excited to have a role in solutions that can assist families with their unique needs. We encourage women to seize this moment, during open enrollment, to ensure that you’re taking advantage of the spending accounts that can help save you money and give you peace of mind you need to keep on making the best decisions for yourself and your family in 2019.


Lisa Goldkamp

Lisa Goldkamp

Vice President of Partner Development and Sales Solutions at WEX Health

As the Vice President of Partner Development and Sales Solutions, Lisa leads the Pre-sales Enablement and Partner Development teams. Lisa strives to ensure every Partner, whether sales distribution or administrative, has the tools to succeed and grow their business through their partnership with WEX Health. Lisa and her team members consult with prospective and current partners as deep technology and solutions experts regarding how the WEX Health offerings match up with their specific needs. Since joining our team in 2005, Lisa has worked with hundreds of partners as they have evaluated our solutions. She is a passionate member of our community who frequently presents at industry events and has used her technology and healthcare expertise to help WEX Health and our partners optimize their growth potential.

Prior to joining WEX Health, Lisa was a sales executive for a national IT training company, which is where she developed a passion for utilizing technology to solve problems and create new business opportunities.

5 Ways to Shake Up Your Open Enrollment Strategy This Year

5 Ways to Shake Up Your Open Enrollment Strategy This Year


by Lindsay Jacobs


As temperatures drop and the fall season comes to an end, stress spikes in HR departments all over the country—that’s because it’s open enrollment season. Open enrollment is a window during which individuals and employees may add or drop their health insurance, or make changes to their coverage. The 2019 open enrollment period runs through Saturday, December 15, 2018, and if your employees don’t act by then, they can’t get 2019 coverage unless they qualify for a special enrollment period. Keep in mind that for employer-sponsored coverage, the open enrollment period is set by the employer, so be sure to clearly communicate these dates to your employees.  To make a better impact on your employees this year and drive engagement to new levels, here are a few suggestions on how to innovate your strategy.


1. Make Your Benefit Meetings Fun

Who says that employee benefits can’t be enticing? Consider creating a workplace party or fun event at your employee benefits meeting this year. With bean bag toss games, door prizes or even a raffle drawing, you’re more likely to draw a crowd and to get your message heard. You’ll also be there in-person to answer any questions someone may have about their benefits, and nothing beats personal interaction.



2. Meet Your Millennial Employees Where They Are

Millennials are now the largest generation in the labor force, and their preferences should be taken into consideration when picking your employee benefits communication strategy. Long, lengthy paragraphs of dry content won’t be cutting it for this group; instead, consider using interactive quizzes or digital communications to reach them with pertinent information. As younger professionals, they might not have the expertise in life insurance or retirement planning, so introducing some educational tools would also be beneficial to help ensure they make the best decision for themselves.


3. Don’t Try to Guess; Find Out What Your Employees Want

Are your employees interested in consumer-directed healthcare plans? Would they appreciate participating in a workplace wellness program if it was made available? If you don’t know the answers to these questions, ask for them. That’s the best way to find out what employees are looking for in the ideal benefits package. Conducting a survey prior to enrollment is a great way to show employees that you’re engaged in what they’re looking for, and asking for feedback afterwards will show you how much progress you’ve made.


4. Simple Is Better

Let’s be honest: Fine print is exhausting. Do your employees a favor and outline the benefits and disadvantages of each plan option so that there’s a clear understanding of expectations, costs and advantages. Simple charts, engaging videos and quizzes help to make difficult benefit decisions easier for the average participant and will eliminate the hassle of questions entering your inbox.


5. Keep the Conversation Going

After employees have made their decisions and enrollment is complete, the conversation regarding benefits and best practices does not have to end. Consider touching base with your employees every few months with tips and tricks regarding their benefit plans and how to save costs and utilize the tools available. This will not only make the next year’s enrollment easier due to better understanding, but will make employees feel that they are an equal participant in their benefit plan and taking control of their overall health.


We hope these tips will help you to evolve your open enrollment strategy this year. Looking for more insights? Read about what consumers care about during open enrollment and what employees need to know about their HSA and FSA dollars at year end.


Lindsay Jacobs WEX Health

Lindsay Jacobs

Marketing Content Strategist at WEX Health

Lindsay Jacobs is a Content Strategist at WEX Health where she focuses on developing strategic and engaging consumer-driven healthcare content to elevate the WEX Health brand and help WEX Health Partners grow and succeed. She graduated with her Bachelor’s Degree from Concordia College in Moorhead, MN and completed her Master’s in Business Administration at Hamline University in August 2018.

Why an HSA Is a Better Retirement Savings Vehicle Than a 401(k)

Why an HSA Is a Better Retirement Savings Vehicle Than a 401(k)


by Jeff Bakke


For some of you it can seem like a long way off, but healthcare expenses in retirement are no joke. Healthcare costs impact everyone in the U.S., and I always try to consider it “in macro,” but recently it hit close to home for me, when my 74-year-old father had to make a hard choice between his heart and his teeth. Let me explain.


Not long ago, I found myself sitting in a dentist’s office with my dad because he was having some serious problems with his teeth. The dentist came in and told him, “I don’t know how else to put this, but your best bet right now is for us to pull all of your teeth and get you in dentures.”


The dentist could tell I was in shock. He turned to my dad, who has had relatively good retiree benefits from his successful 42-year career as an engineer, and asked him how things had gotten so out of hand. He said, “You know, for the last six or seven years, I have had to make some tough financial choices between my heart medications, which are very expensive, and my teeth.”


This was all overwhelming, and certainly brought all of those macro-economic facts about retiree medical costs right to my own family’s very personal life.


When most of us think about planning for retirement, we are usually imagining where we will live. Will we spend our days in Florida or at a cabin in the north woods? Better yet, let’s do both.


Choosing between your teeth and your heart is not the kind of thing you think about when you plan for retirement. And though Medicare helps pay for the healthcare needs of 59 million people, the average recipient still spends thousands a year on out-of-pocket expenses. By 2030, it’s estimated that out-of-pocket healthcare costs for Medicare beneficiaries are likely to take up half of their average social security income. That’s a huge figure for a program that was originally built to pay for all health costs in retirement.


In my work with consumer-directed healthcare plans at WEX Health, I do a lot of thinking about how Americans can thrive in their golden years, and I’ve long been aware that the future, for many aging Americans, is going to be full of these sorts of touch choices. But this experience with my dad reinforced for me that many people are not on a solid financial track, and reminded me why I want to be part of helping Americans to achieve greater financial health—now and in retirement.


According to Census Bureau data, the typical household that earns less than $67,200 a year has no retirement savings. And across all income levels, at least 50 percent of Americans are at risk of not having enough money to maintain their living standards in retirement. Much of this can be attributed to the cost of healthcare during retirement years: The average 65-year-old couple retiring today will need $280,000 to cover healthcare and medical costs in retirement. Very, very few people have that kind of money, or ever will.


One of the best solutions to the problem of saving this sum of money is right in front of our faces: the health savings account (HSA). The triple-tax benefit of these accounts is that contributions are not subject to federal income taxes; earnings from interest and investments are tax-free; and distributions from an HSA to pay for qualified medical expenses are tax-free.


Yet, when I meet with teams of brokers and financial advisors, they’re too often surprised by how appealing HSAs are from a retirement health savings angle. Because many of them are behind in their own knowledge of HSAs, they’re not educating their customers about them and are still steering their clients toward 401(k) plans and IRAs rather than HSAs. However, the retirement community is being slowly awakened to the merits of an HSA. We’re starting to see a lot of companies that offer retirement solutions getting in the game.


That’s because more people are realizing that a HSA is superior to a 401(k) when it comes to saving for retirement. It has all the same advantages of a 401(k), but it additionally allows people to take their money out tax free to pay for healthcare costs in the future or in the past. Which means that I can contribute money (pre-tax!) to my HSA up to the point I am on Medicare, and then use that money at any point for healthcare expenses, and unlike a 401(k), I’ll pay no taxes on the withdrawals. If for some reason I do not need that money for healthcare, I can still withdraw it for non-healthcare expenses and pay income taxes on it exactly like my 401(k). In other words, after age 65, if I decide to use my HSA money to take a vacation instead of for healthcare, I am no worse off than if I used my 401(k) dollars to do it.


Saving for a retirement home on the beach is a lot more fun than saving for healthcare costs. Everyone agrees that having your health is the most important thing, but no one wants to pay for healthcare, much less save for it.


The fact is that you do have some control over your lifestyle in retirement, but you can’t predict what your healthcare expenses are going to be. Even the most frugal among us aren’t planning to adjust their lifestyle to satisfy their healthcare costs. So I encourage people, when thinking about saving for retirement, to consider setting aside some dollars you’d prefer to spend on something today for fun, and instead invest them in an HSA. Someday you, and maybe your son or daughter, will be very glad you did.


Read about how healthcare expenses are putting American workers’ retirement in peril.


Jeff Bakke WEX Health

Jeff Bakke

Chief Strategy Officer at WEX Health

At WEX Health, Jeff oversees corporate strategy, distribution strategy, and strategic partnerships. A specialist at identifying and capturing business opportunities, Jeff has built and led innovative high-performance teams, developed new products and markets, and developed large strategic clients with exceptional recurring revenue results. He has been instrumental in WEX Health’s focus on the emerging exchange market as well as a continued emphasis on HSA market opportunities.

Jeff’s career includes working at SafeNet, Blue Cross and Blue Shield of Minnesota, Medica Health Plans, Allianz and American Express. He earned a degree in electrical engineering from University of Minnesota-Twin Cities.