While much of the recent discourse on healthcare costs has centered on retirement, a new study from the Employee Benefit Research Institute (EBRI) and Lincoln Financial Group highlights a pressing issue for the working population. The research, based on a survey of U.S. employees, finds that more than half of those who experienced a medical event in the past year paid at least $1,000 out of pocket, yet fewer than 30% feel financially prepared for such an expense.
The study, which surveyed over 1,000 workers, reveals that 47% of employees reported at least moderate financial difficulty following a medical event, and 45% are still dealing with the financial aftermath of past medical bills. More alarming, 37% have had a medical bill sent to collections, underscoring a hidden personal finance crisis that often goes unnoticed in broader healthcare debates.
The Burnout-Finance Connection
The research also uncovers a strong correlation between employee burnout and financial vulnerability. Among the 56% of respondents who reported at least one burnout symptom, more than half experienced moderate to extreme financial hardship due to medical events. In contrast, only 3% of those without burnout reported similar difficulties—a 51-percentage-point gap that suggests the mental and physical toll of overwork is exacerbating economic fragility for millions of Americans.
Awareness Gap in Voluntary Benefits
For financial advisors, one of the most actionable findings involves voluntary benefits such as critical illness insurance, hospital indemnity insurance, and accident insurance, which can significantly reduce out-of-pocket exposure. The study reveals a significant disconnect between employer offerings and employee awareness: while 46% of employers report offering accident insurance, only 28% of employees say they know they have access to it.
Understanding of these products is also limited. Just 40% of workers say they have a high understanding of critical illness insurance, and only 35% report strong familiarity with hospital indemnity insurance, compared to 54% who feel confident about their health insurance coverage. However, when employees were given plain-language descriptions of these products, interest rose sharply: 76% expressed interest in critical illness insurance, 71% in accident insurance, and 63% in hospital indemnity coverage.
The case for supplemental coverage is particularly compelling among the roughly half of employees who have delayed or avoided care due to cost, with 26% doing so within the past year. This trend is consistent with broader findings on household debt and declining savings rates, which have left many Americans with little buffer for unexpected medical expenses.
Enrollment and Satisfaction
Where employees do enroll in voluntary products, adoption is relatively strong. Among workers with access to accident insurance, 70% enrolled, while 61% enrolled in hospital indemnity and 53% in critical illness insurance. Moreover, 57% of enrollees across all three product types described their coverage as "very important" to their financial security.
This pattern—low awareness leading to low uptake, but high satisfaction once enrolled—points to a communication and education deficit rather than a product problem. As the advisory profession reconsiders what comprehensive financial planning entails, these findings suggest that addressing the gap between employer offerings and employee understanding could be a key value-add for advisors. For those working with retirement-plan sponsors, the data also reinforces the importance of integrating healthcare cost planning into broader retirement strategies, especially as more workers delay retirement due to inflation and rising costs.
