Introducing a new way to reward your employees and support their wellness
Trying to think of a way to give your employees a bonus or offer an incentive that isn’t cash? A Lifestyle Spending Account (LSA) offers an excellent means to not only promote a healthy lifestyle but also allow employees to proactively manage their own well-being.
Never heard of a Lifestyle Spending Account? No worries. We’ve got your back here at ADI Benefits – read on for a basic intro to LSAs.
What’s a Lifestyle Spending Account (LSA)?
Also known as a Wellness Account or Personal Spending Account, a Lifestyle Spending Account is an innovative, cash-free way for employers to reward employees while supporting their well-being.
For example, instead of giving an employee $1,000 for hitting a certain sales mark, an employer can set up a $1,000 LSA that allows that employee to be reimbursed for an assortment of fitness- and wellness-related services.
Typically, employers determine how much they want to spend and then tick off their desired eligibility options on a form from the LSA provider; acceptable items and services can include such things as fitness equipment, professional development and even child or eldercare. Employers can also create their own options, such as outdoor activities. But make sure to think wellness-related – so the purchase of a mountain bike rather than motorbike, swimming lessons not skydiving lessons. Then it’s up to employees to pay for an item, submit a claim and get reimbursed.
The benefits of Lifestyle Spending Accounts
The benefit for employers is that, unlike a cash bonus, an LSA expense can be written off as a business expense. It adds some flexibility to already existing benefits plans, and is a pay-as-you-go service that is easy to implement and control. It’s also a great way to promote wellness and a holistic lifestyle for your team members. The other thing, of course, is that even though you may make $1,000 available to each employee, not every employee will use the full amount.
For employees, a Lifestyle Spending Account is straightforward to use, and they have some choice and control over what’s important to them in terms of wellness. (Maybe it’s just the excuse they’ve needed to spend $500 on golf clubs rather than applying their cash bonus to another car payment!) Of course, like with a cash bonus, claims paid from these accounts are considered taxable income for employees.
Any drawbacks with LSAs?
The only problem with LSAs is that a lot of companies don’t know about them. They’re a relatively recent product, having only been around for about a year and a half, so they aren’t yet getting the attention they deserve. But, truly, it’s all upside for everyone involved.
Need more information on LSAs or just want to know if that new stroller or family membership to the aquarium will qualify? Get in touch with us at ADI Benefits.