A Financial Wellness Program with a Human Touch

Carolyn Schneider, senior vice president of human resources at Capella Healthcare in Franklin, Tennessee, is concerned about the prospects for retirement for Capella employees.

“I’ve been reading a lot of information about retirement readiness and am very concerned about our employees being ready to retire,” she tells PLANSPONSOR. “Plus, the strain on the Social Security system shows there’s a social issue emerging. These things are driving my passion to have different resources in place to help employees retire when they want with adequate savings.”

Adding to her concerns is a low 34% participation rate for the organization’s 401(k) plan. Capella has been dealing with organizational changes—the divestiture of one facility and a recent acquisition. Schneider notes that the average age of Capella employees is 40, so there are many employees above that age who need to focus on retirement readiness. Capella has 6,300 employees in seven states, and offers a 401(k) plan as well as a nonqualified deferred compensation plan for certain employees.

A couple of years ago, Schneider was attending a women’s conference where Alexa von Tobel, CEO of LearnVest, a financial education provider based in New York City, was presenting. Schneider turned to Capella’s chief financial officer, who was also attending the conference, and said, “This is something we need for employees.” She says she felt LearnVest’s financial wellness program was not only a great product but a way for the organization to meet its fiduciary responsibilities to employees in a way that is cutting edge. She reached out to Alexa after the conference was over.

Schneider adds that LearnVest provides technology, but also offers a human touch—something other firms do not. Employees are assigned a financial planner and talk to the same person every time they have a session. And, the planner holds them accountable, sometimes sending messages to prompt employees to make the right financial decisions.

Von Tobel explains that when an employer decides to partner with LearnVest for an employee financial wellness program, LearnVest creates a cobranded Internet landing page that is just for that employer’s employees. LearnVest also provides a kickoff campaign to make employees aware of the new benefit—which includes posters, webinars, an online Q&A, and sending a financial planner to the employer. Webinar invitations may simply say, “Are you facing a financial situation that is stressing you out? Come to a webinar and get your questions answered.” Von Tobel says she’s found that no matter their income, employees have very similar financial questions about college savings, emergency savings, appropriate insurance, and being on track for retirement.

Employees can go to the employer-branded LearnVest portal and schedule a session with a dedicated financial planner. They answer a profile telling their financial concerns and set up a phone call with their assigned planner. “The planner will provide the employee with a 360-degree financial plan,” von Tobel says. “We tell folks what they should be doing, and the follow through is usually high.”

Capella implemented a pilot of LearnVest’s program on April 2, 2014, with corporate office employees and physicians. So far, 17% of those employees have participated in the program. The organization rolled out the program to the rest of staff in late August/early September 2014. Schneider says some employees in the newly acquired entity are asking when Capella will offer it to them, because they want it.

According to von Tobel, employees typically get active about a financial plan when they are going through life changes, such as a new baby, new home. or divorce, so year over year an employer may see different employees engaging in the LearnVest program. Cumulatively, she says, about 50% of employees get a financial plan from the program within a two- or three-year period. The program retains employee information so that whenever they revisit the program, they can revise their financial plan.

“The feedback we’ve gotten shows employees like it,” Schneider says, noting that LearnVest offers a mobile application that she herself uses. She adds that one LearnVest service is a gap analysis for financial coverage, telling employees whether they need additional life insurance, disability insurance, and so on. “What I really like is LearnVest makes recommendations without being tied to any provider or getting any incentive,” she says. “This makes me feel they are acting in our employees’ best interest.”

The average Capella employee who linked their LearnVest accounts to goals contributed $4,300 to their goals, which could include debt reduction, retirement savings or emergency savings, von Tobel says. The average Capella employee is working on four unique financial goals.

While it’s too early to measure the financial wellness program’s effect on 401(k) plan participation, Schneider says Capella has seen an uptick in the average employee deferral rate, from 5.8% at the end of 2013, to 7.43% today. Capella plans to look at hardships and loans, and whether they decrease from use of the program, as well as wage garnishments and bankruptcies. “Looking at preliminary engagement scores, we see at least two metrics trending in the right direction,” Schneider says.

Capella decided to offer the service free to employees. Von Tobel notes that LearnVest has been approved as an Employee Retirement Income Security Act (ERISA)-eligible expense, so it can be paid for out of a plan sponsor’s ERISA account. She notes that all her clients so far offer the service free to employees.

According to von Tobel, LearnVest is the only financial wellness company on the market that provides complete, holistic financial planning, and the only one that actually provides a one-on-one relationship with a person, “a key pillar that distinguishes LearnVest from others.” She adds, “We don’t think we have a single competitor in the market because other firms either only offer technology or do not handle several employee financial concerns at once.”

“Part of our HR strategy is to look at the whole person,” Schneider says. “We want them to have physical wellness as well as financial and emotional wellness. We found that employees worried about wellness—physical or financial—are not able to focus on patients, so we want to make sure they have all available resources to be well.”