Lifestyle Spending Accounts (LSAs) have been around for the past 5-6 years but have recently caught the attention of employers because of the flexibility LSAs offer. Lifestyle Spending Accounts allow for both the employer and employee to “have it your way.”
The Lifestyle Spending Account (LSA) allows employers to customize a post-tax spending account to help their employees pay for eligible products and services that promote healthy habits and the overall well-being of their employees.
The BASE® LSA is available to all businesses who want to help their employees pay for eligible expenses that promote physical, financial, and emotional well-being that are not covered by insurance.
Because of the flexibility of the Lifestyle Spending Account (LSA), one of the major benefits is that there is no “typical” design. The design comes down to exactly what the employer wants – they can have it their way. The list of eligible expenses is determined by the employer, so the list can be very narrow or very broad. One option is the employer can decide to give employees one lump sum to use towards all categories - physical, financial, and emotional – and pay for the eligible expenses that they need. Another option is the employer can choose to break out the categories, provide certain categories with a certain amount of reimbursement, allowing the employees to still pay for their eligible expenses.
Each LSA can have its own plan design, employee eligibility, dollar amounts, as well as funding and reimbursement criteria. Lifestyle Spending Accounts enable companies to give their employees an incentive without making a permanent commitment such as a raise, helping employees pay for their physical, financial, and emotional needs. The LSA also allows for a simple way to increase benefit options to help attract and retain good employees.
When a business wants to implement an LSA into the business, how it is designed is totally up to them and their bottom line. Just like Burger King, the employer can “have it your way” and BASE® is here to help.