Supporting young workers with student debt

Strategies for encouraging financial wellness

This fall, many students will have started their college careers. In four years, they will emerge with workforce knowledge and skills, plus an average of $37,850 in debt.¹ How can employers help them understand that they need financial protection?

Financial challenges for young workers

As young professionals enter the workforce burdened with student debt, they face a unique set of financial challenges. Loan payments can strain their budgets, making it difficult for them to manage other essential expenses, including healthcare. This is where supplemental health coverage can play a crucial role in providing the financial protection they need.

Delaying or avoiding medical care because of costs

One of the primary concerns for young workers with student debt is the high cost of medical bills. In fact, while 57% of adult workers, cite the cost of care as the most common reason for postponing medical treatment, Millennials are disproportionately affected, with 70% reporting postponing are due to affordability concerns.²

Even with employer-sponsored health insurance, out-of-pocket expenses such as co-pays, deductibles, and non-covered services can quickly add up. Supplemental health coverage, which includes options like accident insurance, critical illness insurance, and hospital indemnity plans, offers additional financial support to help cover these unexpected costs, and helps young employees avoid choosing between their health and financial stability.

Start with basic financial education

A recent study by the National Association of Insurance Commissioners (NAIC) reveals that only half of Gen Z understands basic insurance terms, and only about 1 in 4 can define 'deductible' and 'co-pay.'³ The first step in helping young workers understand why coverages that provide financial protection, like supplement health insurance, is relevant to them, is to help them better understand the potential risks of unexpected medical costs.  Offer a variety of ways for your workers to engage with these resources, such as workshops, one-on-one consultations with benefits advisors, and easy-to-understand materials that explain the value and benefits of additional coverage. Helping younger employees better understand why they need these coverages will ultimately help them make informed decisions about their health and finances.

Address the stress 

According to the NAIC study cited above, more than half of Gen Z respondents said they feel "overwhelmed or anxious" at the thought of dealing with insurance.⁴ The stress of paying student loans, combined with the pressure of managing living expenses, can take a toll younger workers’ mental health. Employers can offer support through mental health resources and coverage as part of their supplemental health plans. This can include access to counseling services, mental health first aid training, and wellness programs. Such initiatives not only help employees manage stress and anxiety, but also foster a supportive workplace that values mental well-being.

It’s a win-win for employees and employers

Offering supplemental health coverage not only helps employees be better prepared, but it also helps organizations succeed. For one, it enhances the overall benefits package, making the company more attractive to top talent. In a competitive job market, this can be a key differentiator in attracting and retaining skilled young workers. Additionally, healthier employees usually are more productive, have fewer absences, and contribute to a positive work environment. By investing in the health and well-being of their workforce, employers can help reduce turnover rates and increase employee satisfaction and loyalty.