The pandemic created a health crisis unlike anything we've seen in 100 years. It also created a medical debt crisis. COVID-19 led to escalating healthcare costs and debt for American workers, putting heat on employers to re-evaluate their healthcare benefit offerings.

According to JAMA, Americans racked up $140 billion in unpaid medical bills last year. Lost among the tragedy of COVID-19 is the cost: according to FAIR Health, COVID-19 hospital stays cost on average over $72,000, more than $35,000 of which goes uncovered by health plans. According to Salary Finance data, nearly 40 percent of those who had a positive COVID-19 diagnosis in their household spent over $1,000 in out-of-pocket healthcare costs as a result.

COVID-19 fatalities and hospitalizations have decreased, and vaccines, masks, and good hygiene have given people the preventive tools they need to stay healthy, so there may be an inclination to think those medical bills may decrease in 2021.

Think again.

With COVID-19 cases on the rise again because of the variant strains of the virus, challenges remain for American workers and the businesses supporting them. And it's not just the virus itself that's led to the unpaid medical bills. COVID-19 left destruction in its wake. Two income households became one income households, which had tremendous financial implications. Family members have had to support other sick family members who lost jobs and health insurance during the pandemic. According to the CDC, 40 percent of American adults avoided medical care because of COVID-19 concerns which, in many cases, worsens overall health outcomes.

Medical debt is crippling for American workers—but also for businesses. The more medical debt workers face, the greater the financial stress. Employees with financial stress struggle at work, sometimes because of lost sleep or depression, and are more often distracted—some of them looking for new jobs that will pay more and help alleviate their financial stress.

What can businesses do? Here are three tips.

1. Create a culture where people feel comfortable talking about financial stress. Businesses have become more empathetic toward their employees, but asking for help still remains a stigma in the working world. Some employees still fear that asking for help may imply weakness, and that it could impact them when it comes time for promotions or raises or, worse yet, when layoffs are imminent. Add in that most people are very leery about speaking about personal finances even outside of the workplace and employers face a slippery slope in identifying who in their organization is at risk. It's time to lean in on empathy and create a culture of caring that encourages employees to talk openly about the conflicts in their lives. By opening up the communication avenues, companies can build trust with employees and, over time, loyalty.
2. Advocate for financial wellness. It's not enough to assume workers have a plan to improve financial wellbeing. As the last year has demonstrated, life comes fast. Employers need to promote financial wellness, but not just talk the talk—they need to walk the walk by offering benefits that make an impact. Companies that do are successful: the Salary Finance research found that companies that offer financial wellness benefits double their employee Net Promoter Score. By improving financial literacy and giving employees access to impactful financial benefits at work, companies can help employees cushion the blow for the unknown, and employers will be able to spend less on recruiting and retention in the long term.
3. Put programs in place that lead to financial resilience. Healthcare, dental, eye exams, mental health… all of these are critical benefits companies must offer employees. Add financial wellness benefits to the list. Almost 60 percent of workers say financial wellness benefits that promote savings are a top priority, according to the Salary Finance study. Salary-linked benefits like Salary Finance can offer employees access to emergency savings accounts and affordable credit that enables them to pay off existing high-cost debt, allowing them to save more money for unexpected healthcare expenses that may come up in the future. These programs have real impact for those with unpaid medical bills. Chad, an employee at a food and beverage manufacturer in Colorado, contracted COVID-19, but was able to take out a Salary Finance loan through his employer to pay off his medical bills. "I was hospitalized for 17 days due to COVID," he said. "I'm currently still on Short Term Disability and the loan from Salary Finance was a lifesaver by paying my medical bills. The loan process was fast and easy."

As new variants start to rage across the country, there is no end in sight for rising healthcare costs many American workers face. Now is the time for companies to respond and put programs in place to help workers—and, at the same time, build trust and loyalty from them to keep the business thriving.