Faced with the stark reality that an aging workforce costs more, financial institutions and other employers are striving to reconcile their balance sheets with their employees’ wellbeing.

It’s another facet of shifting demographic trends: Baby Boomers are rapidly approaching retirement age or are already there, but many continue to work beyond that bright line, either by choice or by necessity. The Population Reference Bureau estimates the median age of the American worker today at 41, compared with 35 three decades ago.

While an older and more experienced (thus, more knowledgeable) workforce can be an asset to a company, it also forces an uncomfortable truth for employers: an aging workforce simply costs more. And health care is a big piece of that equation.

As if medical care wasn’t already expensive enough, a Kaiser report last year estimated health care expenses grew 3.5 percent from 2015 to 2016 – representing the largest year-to-year increase in 32 years and notably faster than wage growth. More than half of all Americans now are insured under a plan that requires they pay $1,000 or more in deductibles first, and the health care market as a whole has shifted the burden from employers to individuals. Health savings accounts (HSAs), in particular, are enjoying a moment in the spotlight as lawmakers talk about alternatives to the Affordable Care Act.

Sean McGarry, a retirement plan services manager at Rockland Trust, said that the health care landscape is undergoing a change similar to that of the retirement landscape 20 or 30 years ago – and that should prompt some self-reflection by plan sponsors.

“We’ve shifted a lot of financial decisions and we just assume [employees] can make them with little to no help, but are we really doing a good enough job providing the support they need to make those choices?” he said.

McGarry offered Rockland Trust’s own response to the issue: the company’s wellness programs also include a financial wellness component, aimed at helping younger employees chip away at debt or start saving for retirement.

Another response has been an increased focus on health and wellness programs, said Michael Trilli, a senior health care analyst with Aite Group.

“I really see an emphasis on health and wellness programs targeted to different parts of your employee population,” he said. “I do also see within plan designs certain routine procedures or visits embedded within the health plan, so in other words, taking away the financial disincentive of going for various routine procedures.”

Kevin Kiley, president of the Massachusetts Bankers Association, said the association has also expanded on the wellness programs it’s had in place for its members for a number of years, with special emphasis on preventative measures for 50-plus individuals.

A Fine Distinction

Of course, there’s an important distinction to be made in this discussion: between older workers who stay on the job for passion or purpose and those who may have wanted to retire by now, but haven’t because they can’t.

Hugh O’Toole, a senior vice president at MassMutual, described meeting a trophy company owner in Springfield who had a dilemma: He had an older employee on staff, a man around 70, who crashed the forklift in the company warehouse every single day. Yet he couldn’t let the guy go.

“That is where I started to think that there is a total alignment between what is good for the employee and what is good for the employer,” O’Toole said.

Data suggest that O’Toole’s trophy company is not an exception. Only 24 percent of Baby Boomers surveyed for a 2016 study by the Insured Retirement Institute felt they had enough savings to last throughout their retirement, down from 36 percent who said the same thing in 2012. Only 39 percent of those surveyed said they’d tried to figure out what they would need to save to get through retirement, and of those, a third did not include health care in their calculations.

But nothing persuades a CFO so well as his or her own numbers. That’s where O’Toole’s work at MassMutual comes in. As the head of workplace distribution, O’Toole manages a unit within MassMutual that can take an employer’s own data on their own employees and run it through a number of calculations. Ultimately, they can tell that employer how much each age band costs them in terms of health care, workers’ comp and the like, and moreover, what proportion of their workforce is on track to retire at about age 65, or at least on their own terms.

The goal is to motivate CFOs to help their employees get retirement ready, by driving home the future liability to the company of an aging and financially strapped workforce.

“I try to distinguish: how do we make sure that people are in a position where they can decide to work or not to work?” O’Toole said. “We know that an older worker who chooses to work is incredibly valuable, but a financially strapped older worker is not only expensive, but also potentially dangerous.”