Why Offer a Lifestyle Spending Account to Your Employees?
As the importance of employee wellness has become more prevalent, so has the need for new and creative ways to better support your employees. A Lifestyle Spending Account (LSA) is a great option because it can be used by employees to pay for mental, physical and financial needs. Below are answers to a few commonly asked questions around LSAs.
What is a Lifestyle Spending Account?
A Lifestyle Spending Account (LSA) is a spending account for your well-being. LSAs are a fully customizable, post-tax benefit to give employers full control to create a plan that promotes healthy habits and overall well-being. Eligible expenses for LSAs will differ from plan to plan, but in general, eligible expenses are purchases that promote a healthy lifestyle.
Why Should an Employer Offer an LSA?
LSAs are being used by employers to better attract and retain employees. It is common for employers to consider eligible expenses that range from physical wellness (gym memberships, exercise equipment, etc.), financial wellness (student loan reimbursement, financial adviser costs, etc.), emotional wellness (meditation classes, counseling services, etc.) and other expenses that could improve employee well-being (pet care, camping equipment, etc.).
What Can an Employer Customize?
Employers have a number of things to decide when customizing their LSA including the following:
- When contributions are available for consumers to use
- How much they would like to contribute
- Which employees are eligible
- What expenses are eligible (more below)
- How funds are handled at the end of each plan year
- How funds are handled for terminated employees
What Are Common Eligible Expenses?
Listed below are common eligible expenses, but can be customized beyond what is listed based on what the employer is looking for:
Physical Wellness:
- Athletic Equipment and Accessories (examples: basketball, hockey stick, golf clubs, fitness apparel, fitness shoes, stopwatch)
- Exercise Equipment (examples: treadmill, elliptical machine, bicycle, free weights, rowing machine)
- Gym, Health Club, Spa and Fitness Studio Memberships
- Related: rock climbing, martial arts, tennis, etc.
- Fitness Classes (examples: yoga, pilates, cycling, etc.)
- Lessons (examples: golf, swimming, tennis, dance, online fitness membership/classes, etc.)
- Personal Trainer
- Fitness Trackers (examples: Fitbit, Apple Watch, etc.)
- Entry Fees (examples: marathons, leagues, etc.)
- Passes (examples: ski, snowboard, golf, swimming etc.)
Financial Wellness:
- Student Loan Reimbursement
- Home Purchase Expense Reimbursement (examples: down payment, closing costs, etc)
- Financial Advisor and Planning Services
- Financial Seminars and Classes
- Identity Theft Services
- Pet Insurance Premiums
Emotional Wellness and Other:
- Meditation Classes
- Non-Medical Counseling Services (marital, parental, etc)
- Retreats (examples: leadership, spiritual, etc.)
- Pet Care (examples: walkers, day care, grooming, etc.)
- Camping (examples: tent, site rental fees, cooking equipment, blow up mattress, sleeping bags, etc.)
- Personal Development Classes (examples: art, cooking, sewing, etc.)
- Annual Park Pass
- Hunting and Fishing Licenses
Does the Surency Flex Benefits Card Work With an LSA?
Yes! And if the employer already has a Surency plan, they can use the same Benefits Card members are already using.
Are There Any Tax Implications?
Since the employer funds an LSA with post-tax dollars, the dollars a consumer spends is considered taxable income to employees.
What Documentation is Required to Substantiate These Expenses?
Substantiation requirements are determined with the employer.
Want to learn more about our LSAs? Contact our Sales team here.