Student Loan Relief
Time Off
Health & Wellness
Save & Invest
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Tax-Free Help Paying Student Debt
With the Covid-19 pause in repayment of federal student loans set to end in September after a year and a half, attention is focusing on a new federal tax break that encourages employers to help workers pay down that debt.
Before the pandemic, employers could pay up to $5,250 a year for an employee’s undergraduate or graduate courses, and the money would be free from payroll and income tax. But if they chose to help workers repay student loans, it was taxed to workers as ordinary salary. Now, as part of Covid-relief legislation, Congress is allowing employers to dish out the same $5,250 a year tax-free amount to help workers pay off their student debt (either federal or private)—at least through 2025.
The money can be paid directly to the worker’s loan agency, or to the worker as a reimbursement.
That’s huge for young workers drowning in student loan debt—and employers know it. While only 8% of U.S. employers now offer student loan repayments, an impressive 36% are at least considering it for 2022, according to a survey of employers conducted in February and March by Willis Towers Watson, the benefits consulting giant. There’s no age limit on who can use this benefit. Unfortunately, the tax-free benefit isn't available to repay student loans taken out for someone else, such as workers’ kids.
Paid Time Off For Family, Vacations And More
The Biden Administration is pushing to make paid family leave universal. As of March 2020, according to the Bureau of Labor Statistics, three quarters of civilian workers had paid vacation and sick leave, but just 21% qualified for paid family leave. While the politicians debate, employers are voluntarily beefing up their leave policies to compete. Those that are already generous are getting more flexible.
In cutting-edge programs you may be able to take paid caregiving leave to bring your father-in-law to cancer treatment or paid bereavement leave upon the death of a beloved aunt. Some are also granting paid bereavement for a miscarriage, notes Jennifer DeMeo, a senior director at Willis Towers Watson. Such changes “may feed into that broader sense of inclusion,” she observes. “Culture at a company is important, and it starts with a mindset that’s supported by programs and policies.”
It’s not just about family. When Willis Towers Watson surveyed nearly 5,000 U.S. workers last October, 52% said they want more generous paid time off, with better work/life balance a particular priority for higher-paid employees and the youngest Gen Z workers, who generally aren’t parents yet. Flexibility—both in where employees work and the time they take off—is on the rise.
A third of employers offer floating holidays (in addition to vacation time) that employees can choose, with their manager’s approval, according to the Society of Human Resource
Management. Time off policies are also responding to the priorities of a more diverse workforce. Nike, Citigroup, Twitter and the NFL are among employers that have made Juneteenth an official paid holiday. Employers also increasingly offer paid time off for volunteer work, typically one to three days a year.
Mental Health & Wellness Assistance—Online
Mental health and wellness benefits are in the spotlight as depression, stress, anxiety, and burnout have taken a toll on employees and their family members during the pandemic. While 36% of employees report suffering from stress, anxiety or depression, an alarming 65% of Gen Z employees do, the Willis Towers Watson worker survey found.
Many employers already have Employee Assistance Programs (EAPs), which provide counseling services (as well as help with issues like finding child care or elder care). An EAP clinical care reviewer can help employees and their dependents navigate everything from telehealth counseling for anxiety to an outpatient program for alcohol and drug abuse to a hospitalization stay for an eating disorder.
Beyond the EAP offerings, employers are adding wellness days and, mental health days off, and—as a direct outgrowth of the pandemic—are improving online access to mental health professionals, as well as digital services, including apps which sometimes come with a coach. MeQuilibrium focuses on resilience. Happify offers online help with anxiety and stress. Chronic condition management apps, whether for diabetes or musculoskeletal issues, are also hot.
New Ways to Save & Invest
Traditionally, financial wellness has meant seminars and perhaps individual coaching. But increasingly, employers are moving into more hands-on, proactive help. One hot new benefit is helping workers to build emergency savings accounts through payroll deductions.
These accounts can be set up as either after-tax “side cars” to 401(k) accounts or as totally separate accounts. In the past, workers who needed cash in an emergency might have had no choice but to take a hardship withdrawal from their 401(k)s—with the red tape, taxes, penalties and compromise of retirement
While help with retirement savings remains the financial benefit workers say they value most, they’re also seeking broader help—and employers are responding. Last summer, when the Employee Benefit Research Institute surveyed 250 employers with 500 or more workers, it found half already offered some sort of financial wellness program and another quarter were in the process of setting one up. Despite the strains of Covid-19, 55% of those providing financial wellness services expected to spend more on them in the next year. “The overarching concept is supporting employees by understanding their broader financial situation,” DeMeo says.
security that can entail. But employees can access these special after-tax emergency funds in a day or two with no penalties or fuss. UPS, Etsy and Mastercard are among companies rolling out such dedicated accounts.
Meanwhile, employers continue to improve retirement savings options; some are adjusting match formulas to make sure lower paid individuals unable to save a high percentage of pay can still get the full employer’s match. Along the same line, Congress is now considering a bipartisan bill which would allow employers to provide a match to workers whose student loan burdens keep them from contributing toward retirement.
At the other end of the savings spectrum: Supersavers with high-deductible health insurance plans are increasingly being offered and using health savings accounts with investment options. HSAs allow workers to save triple tax-free for future medical expenses. (There’s no tax on money going into an HSA; it grows tax free and withdrawals are tax free when used for medical expenses.) That’s particularly appealing to middle-aged and older workers worried about potentially big medical and long-term care bills in retirement.
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Health & Wellness
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Student Loan Relief