Can I use a Lifestyle Spending Account (LSA) for gym apparel?

Are you curious about using your Lifestyle Spending Account (LSA) for gym apparel?

With the rise of employer-funded wellness benefits, it's a question on many minds.

Let's explore the ins and outs of LSAs and how they can support your fitness goals.

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account is a versatile wellness benefit that's fully funded by your employer. Unlike a Health Savings Account (HSA) or Flexible Spending Account (FSA), LSA funds are considered taxable income.

However, this post-tax structure gives employers more flexibility in designing a program that supports diverse aspects of employee well-being. Physical health, mental wellness, financial stability, and family care can all fall under an LSA's umbrella.

The specifics of each LSA vary by employer, but generally, you can expect your company to define:

• Contribution amounts (e.g., $500 annually)
• Funding schedules (e.g., deposited quarterly)
• Eligible expense categories (e.g., gym memberships, counseling, childcare)
• Rollover or "use it or lose it" policies
• Reimbursement processes (e.g., submit receipts via app)

This customizable approach allows LSAs to cater to a workforce's unique needs and priorities.

Examples of LSA-eligible expenses

So, what types of wellness expenses can an LSA typically cover? Again, it depends on your employer's plan design, but common eligible categories include:

• Fitness: Gym memberships, online fitness subscriptions (e.g., Peloton), workout classes (e.g., yoga, spin), personal training sessions, home exercise equipment, and athletic apparel or footwear.
• Mental health: Therapy or counseling services, meditation app subscriptions (e.g., Headspace, Calm), stress management programs, mental health workshops or retreats, and relaxation treatments like massage.
• Family care: Child care fees, babysitting services, elder care support, pet care (e.g., dog walking, pet sitting), adoption assistance, and fertility treatments.

Other possible expense areas include financial planning, educational pursuits, professional development, and charitable giving.

Are gym apparel and athletic clothes eligible LSA expenses?

Most LSAs permit gym apparel if it's specialized for fitness activities. Examples include:

• Workout shirts, leggings, or shorts designed for exercise
• Athletic shoes (e.g., running shoes, cross-training sneakers)
• Performance-oriented accessories like moisture-wicking socks or sports bras

However, general "streetwear" or non-fitness clothing is typically excluded. Employers often define eligible apparel as items "required to participate in a sport or activity".

Key Evidence from LSA Guidelines

1. Direct Inclusions:
   • Many LSA programs list "fitness apparel" and "fitness shoes" as eligible under Physical Wellness.
   • Athletic clothing and athletic shoes are commonly included in fitness categories.
   • Several LSA providers explicitly name "athletic clothes" as an eligible expense.
2. Specificity Requirements:
   • Most guidelines clarify that eligible apparel must be "specific to sport or fitness activity" (e.g., runners, yoga pants) and exclude casual wear.
   • LSA administrators typically include "athletic clothes" but emphasize that employers define eligible categories.
3. Tax and Reimbursement:
   • LSAs are funded with post-tax employer contributions, and reimbursements for gym apparel would be taxable income for employees.
   • Employees typically submit receipts for reimbursement via a mobile app or platform.

Employer Discretion Matters

While many LSAs cover gym apparel, employers ultimately decide which expenses qualify. For example:

• A company might exclude clothing but allow shoes.
• Others might set annual limits (e.g., $200 for apparel).

Employees should review their LSA's eligible expenses list or consult HR for specifics.

Comparison of LSA vs. Other Accounts

FeatureLSA (Gym Apparel)FSA/HSA (Gym Apparel)EligibilityEmployer-definedGenerally ineligibleTax TreatmentPost-tax incomePre-tax (FSA/HSA)FlexibilityHighLow

Most FSAs/HSAs exclude gym apparel unless prescribed for medical reasons, making LSAs a more flexible option for fitness clothing[2][10].

Steps to Use an LSA for Gym Apparel

1. Confirm Eligibility: Check your employer's LSA documentation for "fitness apparel" or similar categories.
2. Save Receipts: Retain itemized receipts showing the purchase of fitness-specific items.
3. Submit for Reimbursement: Use your LSA platform's claims process (e.g., via app or portal)[9][12].

For example, if your employer's LSA includes "athletic wear," a $100 pair of running shoes from a sporting goods store would likely qualify[1][4].

In summary, gym apparel is commonly eligible under LSAs when tied to fitness activities, but always verify your employer's plan details.

What are the benefits of using an LSA for gym apparel?

Using your LSA to purchase gym apparel can positively impact your physical and financial well-being, as well as your overall job satisfaction.

1. Encourages physical activity and healthy habits

When you have the right workout gear, you're more likely to feel confident and motivated to exercise regularly. Studies show that owning exercise-specific clothing can increase your commitment to fitness routines[14][15].

For example, a well-fitting pair of running shoes or moisture-wicking shirt can make your workouts more comfortable and enjoyable, encouraging you to maintain an active lifestyle.

2. Saves money on fitness-related expenses

Gym apparel can be expensive, especially if you're investing in high-quality, performance-oriented pieces. By using your LSA funds for these purchases, you can save significant money on fitness costs over time.

This financial support makes wellness more accessible and affordable, regardless of your budget. Instead of worrying about the price tag, you can focus on finding the gear that best suits your needs and preferences.

3. Boosts employee satisfaction and loyalty

When your employer offers an LSA that covers gym apparel, it demonstrates their commitment to your overall well-being. This type of investment in your health and happiness can improve your job satisfaction and create a stronger sense of loyalty to the company[16].

You're more likely to feel valued and appreciated when your workplace supports your wellness goals both in and out of the office. Plus, the flexibility to choose your own workout gear shows that your employer trusts you to make decisions that benefit your unique fitness journey.

How do I get reimbursed for gym apparel through my LSA?

The reimbursement process for gym apparel through your LSA is straightforward. First, confirm that your employer's plan includes "fitness apparel" or a similar category in its list of eligible expenses. You can typically find this information in your LSA documentation or by contacting your HR department.

Once you've verified that gym apparel is covered, make your purchase from a retailer that specializes in fitness clothing and gear. Be sure to save the itemized receipt, as you'll need to provide this when submitting your reimbursement claim.

Next, access your LSA platform's claims process, which may be available through a mobile app, online portal, or other digital interface. Follow the prompts to submit your reimbursement claim, uploading a copy of your receipt as required documentation.

After your claim is reviewed and approved, you'll receive your reimbursement either as an addition to your regular paycheck or as a separate payment, depending on your employer's arrangement with the LSA provider. Keep in mind that reimbursements for gym apparel through an LSA are considered taxable income, so you may see deductions on your paycheck related to these expenses.

If you have any questions about the eligibility of a specific item or the reimbursement process, don't hesitate to reach out to your HR representative or the LSA platform's customer support team for guidance. They can help ensure that you're maximizing your LSA benefits while adhering to your employer's policies.

Are there any tax implications for LSA gym apparel reimbursements?

It's important to understand the tax implications of using your LSA for gym apparel purchases. Unlike FSAs or HSAs, LSAs are typically funded with post-tax employer contributions[2][13]. This means that any reimbursements you receive for gym apparel will be considered taxable income.

When you submit a claim for gym apparel and receive reimbursement, the amount reimbursed will be added to your taxable income for the year. However, only the actual amount you're reimbursed is taxable, not the full annual allocation of your LSA[2].

Your employer should provide guidance on any tax reporting requirements related to your LSA reimbursements. They may include the reimbursed amounts on your W-2 form or provide a separate statement detailing the taxable income from your LSA.

It's essential to keep accurate records of your LSA expenses and reimbursements for tax purposes. Consult with a tax professional or your HR representative if you have questions about how your LSA reimbursements may impact your individual tax situation.

To better understand the mechanics and benefits of LSAs, you can explore how LSAs work in more detail. This resource provides a comprehensive overview of LSA features, eligibility, and how they compare to other popular employee benefits.

What's the best way for employers to implement an LSA that includes gym apparel?

Implementing an LSA that covers gym apparel is a great way to support your employees' physical fitness and overall well-being. To ensure a successful rollout and ongoing management of this benefit, consider the following best practices:

Partner with an experienced LSA provider that specializes in designing and administering flexible, customizable wellness benefits. They can help you navigate the complexities of plan design, compliance, and reimbursement processes, saving you time and resources.

Clearly define eligible gym apparel expenses in your LSA plan documents. This may include workout clothing, athletic shoes, and performance-oriented accessories. Be specific about what types of items qualify and any exclusions or limitations to avoid confusion and ensure consistency in the reimbursement process.

Communicate the gym apparel benefit to your employees through various channels, such as email, intranet, and company-wide meetings. Provide examples of qualifying purchases and explain how the reimbursement process works. Encourage employees to take advantage of this wellness perk and emphasize your commitment to their health and well-being.

Use an easy-to-navigate platform for submitting and processing reimbursement claims. Look for an LSA provider that offers a user-friendly mobile app or online portal where employees can quickly upload receipts and track the status of their claims. A streamlined claims process will increase employee engagement and satisfaction with the benefit.

Consider combining gym apparel with other health and wellness benefits in your LSA. This may include gym memberships, fitness classes, personal training sessions, and wellness apps. A comprehensive approach to employee wellness can lead to better physical and mental health outcomes, increased productivity, and higher job satisfaction.

Regularly review and adjust your LSA plan based on employee feedback and utilization data. Analyze which expenses are most popular among your team and consider expanding or refining your eligible categories to better meet their needs. Continuously improving your LSA will demonstrate your responsiveness and dedication to employee well-being.

Forma makes it easy for you to maximize your Lifestyle Spending Account benefits, including gym apparel, with a seamless reimbursement process and customizable plan options. Whether you're an employee looking to use your LSA for fitness expenses or an employer designing a flexible wellness program, Forma provides the tools and support to simplify the experience. Schedule a consultation with one of our experts today.