What is a Lifestyle Spending Account?
A Lifestyle Spending Account (LSA) is an employer-funded, often post-tax account that reimburses eligible expenses related to employee wellbeing—physical, emotional, social, and financial. An LSA complements an existing benefits package, reimbursing employees for a wide range of expenses that may or may not be eligible with a Health Savings Account (HSA), Flexible Spending Account (FSA), or Health Reimbursement Arrangement (HRA).
LSAs can:
Deliver personalized benefits
Strengthen your benefits lineup
Maximize employee satisfaction
Attract and retain top talent
How does an LSA work?
You decide your LSA eligible expenses and the annual or monthly reimbursement cap (e.g., $500 per year for a full time employee and $250 per year for a part time employee).
You choose whether to require receipts.
If required, participants can easily upload receipts through their HealthEquity online account.
You can choose to enroll all employees without the need for individual elections and will then need to send HealthEquity your enrollments. Eligible team members will be automatically enrolled—no election required.
Reimbursements fall within one to three pay periods after approvals depending on plan design—if you’ve set up payroll, direct deposit, or checks for your employees to receive.
You’ll be able to access reports from the client portal to see the most common expense types, so you can adjust eligibility to best reflect the needs of your organization.
LSA reimbursement is considered a taxable benefit and employers will need to set up how taxes are withheld based on exemptions elected in the payroll system.
How to determine your LSA plan design
You can work with HealthEquity to design and implement the best program for your people and company culture. Some of the common categories and expenses our clients adopt include:
Fitness
Gym and health club memberships
Virtual fitness subscriptions
Classes with certified personal trainers
Home exercise equipment
Finance
Student loan assistance
Financial planning/advisory services
Utility and grocery assistance
Income tax preparation
Estate planning
Budget-tracking apps
Wellness
Nutrition counseling
Meditation apps
Massage
Cooking classes
Club memberships
Family support
Childcare assistance
Adoption assistance
Surrogacy and infertility
Pet walking and pet sitting expenses
Best practices when getting started with an LSA
Develop clear program goals. Survey your employees to understand their needs and how they are looking for support from their employer.
Clearly define eligible expenses and set a reimbursement camp.
Determine the process and method for reimbursement.
Look at regular reporting that provides you with analytics to optimize program performance.
Continually educate and communicate with employees about the program.
How to set up an LSA
Contact your HealthEquity representative or the Client Services Team at 855.428.0447 or by starting a chat.