Employers are seeking out new ways to improve their employee benefits to compete in today’s marketplace While not yet in the mainstream across the U.S., lifestyle spending accounts (LSAs) are beginning to emerge as the next big thing in employee benefits.
An LSA is an account funded solely by the employer which employees can use to make purchases in a variety of lifestyle categories. These types of accounts sound too good to be true, but they are really a win-win for both the employer and the employee.
Why an LSA works best for companies:
With an LSA, the employer can finally put their people’s budget to good use. Too many companies are wasting thousands of dollars each year on benefits their employees don’t need, don’t want, or don’t use. With an LSA, you only pay for what your employees actually use. No longer are you throwing money into the benefit pit hoping something works.
Now, you can give your employees what they actually need and want most. Additionally, because the LSA is not a tax benefit, it carries no additional tax obligations and different fund amounts can be offered to different classes of employees. An LSA is typically managed by a third party that will remove the hassle, issue approvals and manage the entire program off-site.
Why an LSA works best for employees:
In today’s marketplace, employees are looking for a company that supports their own ideals, lifestyle, and needs. With an LSA, one employee can get a gym membership while another employee can get airline vouchers or front-row football tickets. They have the ability to pick and choose when and where to use their LSA funds, depending on what they need/want at the time. An LSA allows each employee to live the lifestyle they choose with the support of their employer. LSAs are also huge motivators to stay and grow with the same company, knowing you and your family are being taken care of outside of the office.
The Top Benefits LSAs are Used For
LSAs are popular in Canada and on the west coast of the U.S., and are quickly growing into an emerging trend throughout the entire country. An LSA can cover everything from a doula to a driver and everything in between.
As a leader of LSA administration in the state of Utah, Beny has been offering LSAs to companies throughout the Beehive State. Our companies love the flexibility and variety our LSAs provide. As of 2021, we have seen these top 5 benefits emerge as the most popular options our clients choose to use with an LSA:
Everybody needs to eat, but meal planning takes time and effort we don’t have. Takeout is expensive, and going to dinner with a family is a nightmare waiting to happen. Eating out is the number one use of Beny Bucks (our LSA dollars). Employees can order takeout on their way home, have dinner delivered via DoorDash, or stop in for a quick bite to eat on the weekends. Having the ability to enjoy a meal together without worrying about the cost is a huge stress relief to many of our employee families. For the company? Paying for dinner is significantly less expensive than other benefits and perks they were offering that their employees didn’t need or want. If you want to take care of your people, feed them first.
Here at Beny, once our employees are fed – they want to be entertained. Our second most popular category of benefits is entertainment. We encourage our employees to take their spouse or significant other out on a date night each week, and Beny allows them to do that. Beny Bucks can reimburse employees for the cost of movies, go-kart racing, bowling, Top Golf, etc. Weekends are made for having fun, and Beny supports that by providing a wide range of entertainment for the bachelor working in your sales department or the baby boomer working in accounting.
#3: Auto Services
Coming in at number three is auto services. We have noticed that employees care about their cars, and driving to work every day takes a toll on their vehicles. Because auto maintenance can add up quickly, many employees use Beny to offset the cost of auto services. Our LSA dollars can be used for carwashes, basic car maintenance like an oil change or tire rotation, or even a full auto detailing service. Helping out with the little things shows our employees we care about what is important to them, like keeping that new ride looking beautiful and running great.
#4: Fitness and Wellness
Staying healthy is important for everyone, but that doesn’t mean everyone has the same healthy habits. Fitness and wellness is always a popular category for LSAs, because it provides the ultimate in flexibility. For one employee, fitness and wellness may mean protein supplements, gym membership, and even some weight equipment for the garage. For another, it’s a membership to a yoga studio and a massage once a month. Maybe one employee needs nutritional counseling or a diet program while another has their eye on spin classes. An LSA allows you to support each employee in their fitness and wellness needs and help everyone stay healthy all year long.
#5: Family Fun
The last benefit our Beny clients use most passes for family fun activities like water parks, local amusement parks, museums, etc. Taking a family of five to an aquarium or the children’s museum can easily cost over $100 for the day. Your LSA can cover the cost of these outings so your employee can enjoy the weekend with their family. By supporting the family, you are supporting your employee and those they love most.
These top five categories are the most common benefits employees use their LSA for. But this is just the beginning of the options. There are unexpected benefits you gain from an LSA and additional services that can be customized to your company, your area, or your budget. Give us a call today to see how an LSA can set your company aside from the rest and offer the ultimate in employee benefits.