How LSA benefits work

Making the most of Lifestyle Spending Account (LSA) benefits

A Lifestyle Spending Account (LSA) benefit is an employer-sponsored that employees can use to cover the cost of various lifestyle-related expenses. LSA benefits are infinitely customizable. and typically used for lifestyle expenses not covered by existing health plans. Companies can use LSA benefits strategically to provide comprehensive coverage and fill in gaps not covered by core medical, dental, vision, and retirement benefits. Others may leverage LSA benefits support a specific initiative (e.g., a custom LSA benefit that supports workforce well-being and aligns with company values) or respond to an emerging need (e.g., an emergency relief LSA benefit for those impacted by the fires in Hawaii). The options and strategies behind making the most of an LSA benefit are endless.

But how exactly does this new emerging offering work? Understanding what's behind an LSA benefit is key to making the most of the option. We'll cover that in this blog.

How does an LSA benefit work?

With LSAs, employers can set up various allowances and define eligibility parameters. For example, a company can offer employees $100 per month for approved wellness activities, a separate account for financial aid assistance, and even one-time usage benefits for needs like adoption assistance or a new hire’s home office equipment.

At the highest level, the LSA construct includes a few basic parameters.

• Employers determine the funding.
• Employers define eligibility requirements for each spending account.
• Employees choose how to spend account funds.

Within the framework, employers set program eligibility so it fits the goals of the organization and employees. Some companies will be prescriptive with spending account types tied to specific initiatives, engagement survey results, or business goals and offer multiple types of LSAs. Others create a catchall Lifestyle Spending Account for broader support–perhaps mental health, physical fitness, learning & development, caregiving–whatever the company deems eligible. Lifestyle Spending Accounts benefit everyone.

Employees can use the LSA benefit differently depending on their personal preferences. For example, a company provides a wellness LSA and sets requirements that accommodate varied life stages. Those in their 20s may choose to spend funds on gym memberships. Others in their 30s may want to use funds for child care. Some in their 40s may pay for financial planning applications. With LSAs, the options are endless. The HR team can deliver on its main focus–supporting employees. And given the flexibility of an LSA program, they’re able to administer and manage successful benefits with greater ease.

Lifestyle Spending Accounts benefit everyone. Employees can use the LSA benefit differently depending on their personal preferences. For example, a company provides a wellness LSA and sets requirements that accommodate varied life stages. Those in their 20s may choose to spend funds on gym memberships. Others in their 30s may want to use funds for child care. Some in their 40s may pay for financial planning applications. 

Why LSAs are becoming a must-have

With LSAs, the options are endless. The HR team can deliver on its main focus–supporting employees. And given the flexibility of an LSA program, they’re able to administer and manage successful benefits with greater ease. 

LSA benefits help…

• Employers: Offer the most attractive benefits packages possible while optimizing spend.
• Employees: Enjoy unlimited flexibility with how they choose their benefits. 
• Benefits Professionals: Eliminate countless hours (and headaches) managing point solutions.

For more information about LSA benefits, <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">schedule a consultation</span> with one of our experts. We’d be happy to help you find the perfect solution for your unique needs.