Can I use a Lifestyle Spending Account (LSA) for occupational therapy?

Can you use a Lifestyle Spending Account (LSA) for occupational therapy?

In 2025, many employers offer LSAs as part of their benefits package to support employee well-being.

But what exactly do LSAs cover, and can you use them for occupational therapy expenses?

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account (LSA) is an employer-funded benefit that provides you with funds to support your well-being and lifestyle choices. Unlike traditional benefits plans with fixed categories, LSAs offer flexibility and personalization.

This means you can choose how to allocate the funds based on your unique needs and preferences. Whether you prioritize fitness, mental health, family care, or professional development, an LSA empowers you to invest in what matters most to you.

Employers set up LSAs to promote a holistic approach to employee well-being. By providing these funds, they acknowledge that well-being extends beyond just physical health. LSAs recognize that supporting diverse aspects of your life—from stress management to personal growth—leads to improved job satisfaction, productivity, and overall happiness.

The amount of money in an LSA varies by employer, but it's typically a set annual allowance. You can use this money throughout the year on eligible expenses, which your employer determines based on their LSA plan. Common categories include gym memberships, fitness classes, mental health apps, childcare, elder care, pet care, hobby supplies, and educational pursuits.

How do Lifestyle Spending Accounts work?

LSAs are a flexible benefit that your employer funds and manages. Your employer sets a budget for the program and determines which categories of expenses are eligible for reimbursement. These categories align with the company's values and goals for employee well-being.

Typically, you'll receive a set amount of LSA funds on a monthly or annual basis. The exact amount depends on your employer's budget and program design. Once you have these funds available, you can spend them on approved expenses that fall within the eligible categories.

To get reimbursed, you'll usually submit your receipts or invoices through an LSA platform provided by your employer. Some platforms allow you to upload receipts directly, while others may require you to fill out a reimbursement form and attach your receipts. Your employer will review the expenses to ensure they meet the program guidelines.

It's important to note that LSA funds are generally considered taxable income. This means that the reimbursements you receive will be added to your taxable wages, unless the expense qualifies for a specific tax-advantaged exception. However, even with the tax implications, LSAs still provide a valuable benefit by helping you pay for expenses that support your overall well-being.

When using your LSA, it's crucial to keep track of your expenses and submit them for reimbursement promptly. Most programs have a deadline for submitting expenses, such as the end of the plan year. Any unused funds may be forfeited, so it's in your best interest to use your LSA regularly and stay on top of the reimbursement process.

Key Considerations for LSA Eligibility

1. Employer-Defined Parameters
   LSAs are fully customizable by employers, who determine eligible expense categories. While many programs include broad wellness categories like physical health or mental well-being, occupational therapy isn't universally covered unless explicitly listed[1][5][9]. For example:
2. Ohio State University's LSA allows reimbursement for therapies not covered by insurance if they align with health and wellness goals[3][6].
3. Some employers expand eligibility to include services like massage therapy or ergonomic equipment, which could overlap with occupational therapy needs[9][12].
4. Tax Implications
   Unlike HSAs or FSAs, LSA reimbursements are typically taxable as income unless the expense qualifies for a tax-advantaged exception (e.g., tuition assistance)[5][14]. Occupational therapy reimbursed through an LSA would generally be taxable unless the employer structures it under a tax-eligible category.
5. Comparison to Other Accounts
6. HSAs/FSAs: Occupational therapy is often eligible with a Letter of Medical Necessity (LMN) for these accounts[2][10][11].
7. LSAs: No LMN is required, but employers must explicitly include occupational therapy in their eligible expenses[5][9].

Steps to Determine Eligibility

1. Review Your Employer's LSA Guidelines
   Check if occupational therapy falls under approved categories like physical health, rehabilitative services, or wellness programs. For example, some LSAs cover "primary care substitutes" or "ergonomic equipment," which could apply[9][12].
2. Submit for Reimbursement
   If eligible, you typically pay out-of-pocket first, then submit receipts and documentation through the LSA platform[7][14]. Your employer or the third-party administrator verifies compliance with program rules.
3. Alternate Options
   If your LSA excludes occupational therapy, explore whether your HSA/FSA covers it (with an LMN) or if your employer offers a separate wellness stipend[2][10][11].

Can occupational therapy be covered by a Lifestyle Spending Account?

Occupational therapy eligibility depends on how your employer structures their LSA program. While some plans may cover occupational therapy expenses, others might not include it as an eligible category.

To determine if your LSA can be used for occupational therapy, you'll need to review your employer's specific guidelines and approved expense categories. Look for mentions of occupational therapy, rehabilitative services, or wellness programs that could encompass this type of treatment.

Keep in mind that even if occupational therapy isn't explicitly listed, some LSA plans may allow for case-by-case approval of expenses that align with the program's overall health and wellness goals. It's worth discussing your specific situation with your HR representative or LSA administrator to explore your options.

Key considerations for LSA eligibility

When evaluating whether your LSA covers occupational therapy, there are a few key factors to consider:

1. Employer-defined parameters: For occupational therapy to be eligible, it must be explicitly listed as an approved expense category in your employer's LSA plan. Each employer has the flexibility to customize their program, so what's covered can vary widely from one company to another.
2. Tax implications: In most cases, LSA reimbursements are considered taxable income, unless the expense qualifies for a specific tax-advantaged exception. This means that if your LSA does cover occupational therapy, you'll likely need to pay taxes on the reimbursed amount. However, the tax implications may be outweighed by the benefit of having some or all of your occupational therapy costs covered by your employer.
3. Comparison to other accounts: If you have access to other health-related accounts like a Health Savings Account (HSA) or Flexible Spending Account (FSA), it's worth comparing the eligibility rules. HSAs and FSAs often cover occupational therapy expenses with a Letter of Medical Necessity from your healthcare provider. In contrast, LSAs typically don't require an LMN but do require explicit employer approval of the expense category.

If you discover that your current LSA plan doesn't cover occupational therapy, you have a few options. First, talk to your HR representative about the possibility of adding occupational therapy as an eligible expense in the future. Many employers are open to feedback and may consider expanding their LSA categories to better support employee well-being.

Alternatively, explore whether any of your other employee benefits could help offset the cost of occupational therapy. This might include HSAs, FSAs, or wellness stipends that are separate from your LSA. By understanding all the resources available to you, you can create a comprehensive plan to manage your health expenses and prioritize your well-being.

What are the benefits of using an LSA for occupational therapy?

Using your Lifestyle Spending Account (LSA) for occupational therapy can offer several advantages that support your overall well-being and financial health. Let's explore the key benefits of this approach.

Flexibility in choosing providers and services

One of the most significant advantages of using your LSA for occupational therapy is the flexibility it provides in selecting your preferred providers and services. Unlike traditional health insurance plans that may limit you to in-network providers or require referrals, an LSA allows you to choose the occupational therapist or clinic that best meets your needs.

This flexibility empowers you to prioritize factors like location, specialization, and treatment approach when making your decision. Whether you prefer a provider close to home, one with expertise in a specific condition, or a clinic offering innovative therapy techniques, your LSA gives you the freedom to choose the option that aligns with your preferences and goals.

Potential tax savings if structured appropriately

When your employer structures the LSA program in a tax-advantaged manner, you may enjoy potential tax savings on your occupational therapy expenses. Some employers design their LSAs to qualify for tax exemptions, such as those related to medical expenses or educational assistance programs.

In these cases, the funds you use for occupational therapy through your LSA may be excluded from your taxable income, reducing your overall tax liability. This can result in significant savings over time, especially if you require ongoing or extensive occupational therapy services.

However, it's important to note that the specific tax implications of your LSA will depend on your employer's program design and the current tax regulations. Consulting with your HR representative or a tax professional can help you understand the potential tax benefits in your particular situation.

Encourages employees to prioritize their well-being

LSAs that cover occupational therapy send a clear message that your employer values your holistic well-being. By providing financial support for services that help you maintain or improve your physical, mental, and emotional health, your employer demonstrates a commitment to your overall wellness.

This encouragement can be particularly impactful for employees who may have previously foregone occupational therapy due to cost concerns or lack of insurance coverage. With an LSA, you may feel more empowered to prioritize your well-being and seek the care you need to thrive both personally and professionally.

Moreover, when employers promote the use of LSAs for wellness services like occupational therapy, it can foster a workplace culture that prioritizes self-care and work-life balance. This supportive environment can contribute to increased job satisfaction, productivity, and employee retention.

Supplements coverage gaps in traditional health insurance plans

Even if you have a comprehensive health insurance plan, you may encounter coverage gaps when it comes to occupational therapy. Some plans may limit the number of therapy sessions covered, impose high deductibles or copayments, or exclude certain conditions or treatment approaches.

By using your LSA to supplement your traditional health insurance, you can bridge these coverage gaps and access the occupational therapy services you need without facing significant out-of-pocket expenses. This can be especially valuable if you require frequent or long-term therapy to manage a chronic condition, recover from an injury, or adapt to changes in your abilities.

Additionally, LSAs can provide coverage for occupational therapy-related expenses that may not be covered by insurance, such as adaptive equipment, home modifications, or specialized training programs. By leveraging your LSA funds alongside your insurance benefits, you can create a more comprehensive and tailored approach to your occupational therapy needs.

How to determine if your LSA covers occupational therapy

To find out if your Lifestyle Spending Account (LSA) covers occupational therapy expenses, follow these steps:

Review your employer's LSA guidelines

Start by carefully reviewing your employer's LSA documentation, which outlines the eligible expense categories and any specific limitations or exclusions. Look for mentions of occupational therapy, rehabilitative services, physical health, or wellness programs that could encompass this type of treatment.

If the guidelines are unclear or you can't find a definitive answer, reach out to your HR representative or LSA administrator for clarification. They can provide more details on how your company's LSA program is structured and whether occupational therapy is an approved expense.

Submit for reimbursement

If you determine that occupational therapy is indeed eligible under your LSA, you'll typically need to pay for the services out-of-pocket first and then submit a reimbursement request. Most LSA platforms have a user-friendly interface where you can easily upload your receipts or invoices and provide any necessary documentation.

Your employer or the third-party administrator will review your submission to ensure it complies with the program rules. Once approved, you'll receive the reimbursement either through direct deposit or as a credit to your LSA account, depending on how your employer has set up the program.

Keep in mind that you may need to submit your reimbursement request within a specific timeframe, such as 30 or 60 days from the date of service. Be sure to check your LSA guidelines for any deadlines to avoid missing out on the opportunity for reimbursement.

Explore alternate options

If, after reviewing your employer's guidelines, you find that occupational therapy is not covered under your LSA, don't lose hope. You may have other options available to help offset the cost of this important care.

One alternative is to check if you have access to a Health Savings Account (HSA) or Flexible Spending Account (FSA). These tax-advantaged accounts often cover occupational therapy expenses when accompanied by a Letter of Medical Necessity (LMN) from your healthcare provider. An LMN is a formal document that outlines why the treatment is medically necessary for your specific condition or situation.

Another possibility is to inquire with your HR department about any separate wellness stipends or reimbursement programs your company may offer. Some employers provide additional funds specifically for health and wellness expenses that fall outside the scope of their LSA or traditional benefits plans.

If neither of these options is available, consider having an open conversation with your employer about the importance of occupational therapy for your well-being and productivity. Many companies are receptive to employee feedback and may be willing to expand their LSA categories or explore other ways to support your health needs.

Remember, advocating for your health is always worthwhile. By taking the time to understand your benefits, explore your options, and communicate your needs, you can create a personalized plan to access the care that's vital to your overall well-being and success, both at work and in your personal life.

What are some top LSA platforms for managing occupational therapy expenses?

When using your Lifestyle Spending Account (LSA) for occupational therapy expenses, choosing the right platform can make a significant difference in your experience. A well-designed LSA platform simplifies the process of submitting and tracking your expenses, ensuring a seamless reimbursement process.

One of the leading LSA providers is Forma , which offers a comprehensive solution for managing your occupational therapy expenses. With Forma, you can easily submit receipts, monitor your account balance, and access a wide range of eligible expense categories. The platform's user-friendly interface and mobile app make it convenient to manage your LSA on the go.

Other top LSA platforms to consider include WEX, ThrivePass, and Espresa. These providers offer similar features and benefits, such as streamlined expense management, robust reporting capabilities, and dedicated customer support teams to assist you with any questions or concerns.

When evaluating LSA platforms, look for ones that offer a broad range of eligible expense categories, as this will give you more flexibility in using your funds for occupational therapy and other wellness-related expenses. Additionally, consider platforms with intuitive user interfaces, mobile accessibility, and tools for tracking your spending and reimbursements.

Some LSA platforms may also offer additional resources, such as provider directories or educational materials, to help you make informed decisions about your occupational therapy care. These value-added features can enhance your overall experience and support you in maximizing the benefits of your LSA.

Ultimately, the best LSA platform for your occupational therapy expenses will depend on your specific needs and preferences, as well as your employer's partnerships and program design. Take the time to research and compare different options, and don't hesitate to reach out to your HR representative or the platform's customer support team for guidance in making your decision.

Is using an LSA for occupational therapy worth it?

Using your Lifestyle Spending Account (LSA) for occupational therapy can be a smart financial decision that supports your overall well-being. Occupational therapy helps individuals develop, recover, or maintain the skills needed for daily living and working. By accessing these services through your LSA, you can offset the costs and prioritize your health without added financial strain.

Employers recognize the value of offering personalized benefits like occupational therapy coverage through LSAs. When you have the flexibility to allocate funds towards services that directly impact your quality of life, you're more likely to feel supported and valued by your company. This, in turn, can lead to increased job satisfaction, productivity, and a stronger sense of loyalty to your employer.

However, before deciding to use your LSA for occupational therapy, it's important to carefully review your employer's specific policy. Ensure that occupational therapy is indeed an eligible expense category and understand any limitations or requirements for reimbursement. Keep in mind that LSA funds are typically considered taxable income, so factor in the potential tax implications when determining if it's a worthwhile option for your needs.

The advantages of Lifestyle Spending Accounts extend beyond just financial support. LSAs empower you to take control of your well-being by choosing the services and providers that best align with your unique needs and preferences. This personalization can lead to more effective and satisfying care experiences, ultimately contributing to better health outcomes and overall quality of life.

If you determine that using your LSA for occupational therapy is a viable and beneficial option, take advantage of this valuable resource. Communicate openly with your employer about your needs and engage with the LSA platform to streamline the reimbursement process. By prioritizing your well-being and leveraging the benefits available to you, you can create a more fulfilling and balanced personal and professional life.

Forma simplifies Lifestyle Spending Account (LSA) management, giving you the flexibility to use your benefits for what matters most—including occupational therapy if your employer allows it. With an intuitive platform and seamless reimbursement process, Forma helps you maximize your well-being without the hassle. Schedule a consultation with one of our experts today.