Rising medical expenses are causing, well, some side effects.

The majority (71%) of employees have experienced a 5% increase in medical costs in the last year, and 22% saw an increase of 15% or more, according to a new study from Prudential Group Insurance.

There’s also a disconnect between how employers and employees feel about the price hikes: 75% of employers think they’re doing enough to help mitigate rising medical costs, while just 46% of employees agree. And they’re feeling the pain in more ways than one.

“Rising healthcare costs are impacting employees in a number of different ways…There’s the physical, there’s the financial, there’s the emotional, and there’s even the social component,” Jon Trevisan, VP and head of distribution at Prudential, said during a virtual panel on April 27.

Employees aren’t doing well…because heightened medical costs are impacting their lives. Many employees are experiencing financial stress (32%), mental health impact (22%), and physical health symptoms (22%), the report found.

“We saw [employees] reducing savings, delaying medical care, or putting off important treatments,” Pistritto said. “That’s really when benefits like disability paid leave and holistic well-being are playing a critical role in stabilizing how employees are reacting.”

Financial stress caused by healthcare costs is important to address, Meghan Pistritto, Prudential’s product lead and VP for disability, state paid leaves, and holistic wellbeing, said during the panel.

“Organizations that really take action by recognizing the interconnectivity of all of that, and addressing it through financial tools, preventive health, mental health support, and voluntary benefits, those are the ones that are going to be most successful going forward,” Trevisan said.

How HR can rethink benefits strategies. People teams can start by helping employees plan for what Pistritto calls, “disabling life events,” which can include family formation, pregnancies, chronic health issues, injuries, sickness, or caregiving demands, that may leave employees unemployed, underemployed, or working less.

“It’s not ‘if’ we will experience a disabling event, it is ‘when’ we’ll experience that disabling event, and making sure that we’re prepared,” she said.

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