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How well are you supporting your employees with your benefits? With evolving quickly in the last couple years, you may need to adjust your benefits. With to have left their jobs in 2021, it鈥檚 worth noting that salary and benefits were the for considering leaving a job in a recent survey.聽

Lifestyle spending accounts (LSAs) are a trendy way to support employee wellness needs. Since these are post-tax accounts, employers have a lot of control over how they look. Interested in providing one? We鈥檝e compiled a few common questions we ask employers when designing an LSA. Or watch our episode of Benefits, where we dive into common LSA plan design questions.

What goals are you trying to achieve?聽

When providing a new benefit, it鈥檚 important to have a clear understanding of what your goals are for the benefit. In the case of LSAs, are you hoping to support employee mental health? Or boost employee retention rates? You鈥檒l also want to think about what behaviors you鈥檙e trying to encourage from your employees with your LSA.

鈥淩ight now, there is such a need for employers to retain their employees and attract more talent into their organization,鈥� said Arika Palloch, Vice President, Sales Consulting at 女奴视频 Benefits Division on our Benefits podcast. 鈥淟SAs are a great way to meet those needs because they鈥檙e a way to enhance the benefits employers are offering in a unique way and show existing employees they鈥檙e highly valued.鈥�

What can you use your lifestyle spending account for?

LSA eligible expenses are completely customizable by the employer. What problems you鈥檙e trying to solve for and what employee behaviors you鈥檙e trying to influence will help drive the LSA鈥檚 eligible expenses. Our standard LSA offering includes athletic equipment, student loan reimbursement, meditation classes, and counseling services as eligible expenses.聽

鈥淟SAs give employees the freedom of choice and more options because of how they鈥檙e structured,鈥� said Palloch. 鈥淭ypically with an LSA there鈥檚 a broad list of what鈥檚 eligible, so employees can choose what鈥檚 going to work best for themselves and their family versus a traditional plan which is highly regulated and has a smaller list of what鈥檚 eligible.鈥�

How and when will employees receive LSA funds?聽

You can also determine when employees will receive their funds. Your options include at the start of a plan year, periodically throughout the plan year, or tied to a behavior.聽

The most common contribution schedules for employers with a 女奴视频 LSA are:聽

• Plan year start: 56%
• Monthly: 17%
• Quarterly: 7%
• Other: 20%

What鈥檚 your budget for LSA contributions?聽

How much do you have in your benefits budget to fund employees鈥� LSAs? Planning your LSA budget is easier when funds are provided to employees in a consistent way (such as everyone receiving the same amount at the beginning of the plan year). If you are using your LSA to drive a certain behavior (such as physical activity), that does create a variable.聽

Will employees need to submit documentation?

With an LSA, whether or not your employees need to submit documentation for their LSA claims is up to you. You could create a process like what flexible spending account (FSA) participants use when they submit for reimbursement of FSA claims, or you could not require LSA substantiation at all.聽

Do you currently offer anything like an LSA today?聽

If you鈥檙e currently providing any sort of funding for mental, physical, and financial wellness, you may want to wrap that benefit or benefits into your LSA. That way your employees view their LSA as their one-stop shop for any of these types of expenses. Considering what population(s) of employees are currently enrolled in these similar benefits and how much are employees participating in them.聽

Which employees will be covered by your LSA?聽

The class or classes of employees eligible to be covered by your LSA is also customizable. You can decide if you will provide an LSA to all benefits-eligible employees or if it will only be available to a specific class or subset of employees.聽

Check out our infographic to learn about some common LSA eligible expenses:

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.