How to find the budget for Lifestyle Spending Accounts (LSAs) | Blog posts | Forma

How to find the budget for Lifestyle Spending Accounts (LSAs)

Get tips for ways you can get funding and budget for Lifestyle Spending Accounts at no extra cost with existing resources in place.

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How to find the budget for LSAs

Finding the budget for employee benefits programs can be a challenge, especially with limited financial resources. You want to offer competitive benefits that meet the diverse needs of your workforce while staying within budget constraints.

As an HR professional, you balance employee expectations and company goals. This delicate dance requires strategic thinking and creative solutions.

Enter Lifestyle Spending Accounts (LSAs). LSAs are a flexible, personalized approach to employee benefits that can help you optimize your budget and deliver value to your people.

What are Lifestyle Spending Accounts (LSAs)?

Lifestyle Spending Accounts (LSAs) are employer-funded accounts that give employees a flexible way to spend money on various wellness and lifestyle expenses. With LSAs, you can offer personalized benefits catering to your workforce’s diverse needs and preferences.

LSAs typically cover a wide range of categories, such as:

The flexibility of LSAs allows you to design a benefits program that aligns with your company culture and values while supporting your employees’ overall well-being. Employees can choose how to allocate their LSA funds based on their individual needs and preferences, leading to higher engagement and satisfaction with their benefits.

Administering LSAs is straightforward with the right technology platform. Through a user-friendly interface, you can set up customizable spending categories, define eligibility criteria, and manage reimbursements. This streamlines the benefits administration process and reduces the workload for your HR team.

By offering LSAs, you demonstrate your commitment to employee well-being and work-life balance. This innovative approach to benefits can help you attract and retain top talent, boost employee morale, and foster a positive company culture.

The benefits of offering LSAs

When you offer Lifestyle Spending Accounts (LSAs) to your team, you open the door to a wealth of advantages for both your employees and your organization. These benefits contribute to a healthier, more vibrant workplace culture and bolster your company’s reputation and competitive edge in the market.

Some of the main benefits include:

Improved employee well-being

LSAs directly impact your employees’ well-being by providing them with the means to invest in their health, happiness, and overall life satisfaction. These accounts offer a broad spectrum of wellness and lifestyle options, from gym memberships to mental health support, aligning with individual needs and preferences.

The flexibility to choose how to spend their LSA funds empowers employees to take charge of their well-being, leading to a healthier, more balanced lifestyle.

Increased employee engagement and retention

The personalization aspect of LSAs significantly boosts employee engagement. When employees feel their employer genuinely cares about their well-being and offers benefits that resonate with their personal lives, their connection to the company strengthens.

Enhanced employer branding and attractiveness

In today’s competitive job market, standing out as an employer of choice is paramount. LSAs can significantly enhance your employer brand by showcasing your commitment to employee well-being and flexibility.

A strong employer brand attracts top talent and positions your company as a leader in employee benefits innovation.

How to find the budget for LSAs in 2024

When it comes to financing LSAs, it can be challenging to balance resources to ensure cost-effective solutions without sacrificing the quality of employee benefits. HR professionals need to optimize their existing resources to overcome this challenge.

1. Consolidate various employee benefits vendors

Consolidating multiple benefits vendors into a single LSA platform reduces administrative costs and simplifies benefits management. The savings from consolidation can be reallocated to fund the LSA program.

2. Utilize wellness funds offered by healthcare providers

Healthcare providers often include wellness incentives as part of their core programs to stay competitive. Access to these funds can be complicated, with highly complex reimbursement policies.

3. Repurpose existing budgets

As companies adapt to the evolving work landscape, there are opportunities to repurpose existing budgets to support a more inclusive and flexible LSA program.

4. Adjust compensation increases

In 2024, you can find additional funds for your LSA program by strategically adjusting annual compensation increases. Rather than allocating the full amount of a planned raise, consider redirecting a small portion to your LSA budget.

5. Bundle pricing for pre-tax and LSA administration

Consolidating pre-tax benefits and LSAs on a single platform eliminates redundancies, reduces software costs, and saves administration time. Use these savings to fund your LSA program.

Additional ways to find budget for Lifestyle Spending Accounts

1. Convert wellness challenge dollars

Wellness challenges can be costly and only draw in a small slice of the workforce. Shift these funds to an LSA with a flexible construct, allowing employees to select options that are meaningful and motivating to them.

2. Remove costly expense software

Consolidate and streamline with a holistic solution like flexible LSA benefits technology. Save on cost-per-click charges and staff time spent inputting information.

3. Repurpose 401k match contributions

Studies show employees prefer an employer who contributes to an LSA over a 401k. Take a portion of the money aligned to 401k matches and put it into an LSA, giving everyone a little something.

4. Improve cell phone and wifi reimbursements

Remove expense software fees and repurpose the savings to fund the account. You won’t be charged per click, making it a no-brainer for spending improvements.

5. Look for an ergonomic equipment budget

LSAs can help disseminate ergonomic needs at scale, allowing employees to select and ship items directly to their chosen destination.

6. Create a more inclusive family formation strategy

Reimagine and streamline your approach by defining eligibility rules and letting employees decide how to source these benefits, saving time and making your approach more inclusive.

7. Give renewed purpose to new parent budgets

Shift funds for new parent gifts into an LSA, giving new parents choices to use the funds for something they need most.

8. Draw from the Learning and Development budget

Professional development fits well within LSAs, giving employees choice and flexibility based on their roles, development opportunities, and career stage.

9. Refresh performance and competitions awards

Funding an LSA is much easier than using expense systems or procuring individual gift cards. Rewards can go into specific spending accounts for defined uses that benefit the company.

10. Streamline holiday gift budgets

LSAs solve the challenge of finding a gift every employee will value. It’s easy to administer and fits in with existing accounting.

11. Administer service anniversary bonuses

Similar to holiday gifts, retention and tenure bonuses can be administered in LSAs with all the administrative, tax, and accounting benefits.

12. Allow SWAG to be purchased

Give people the ability to select their SWAG using the budget, and the company only pays for items people want.

Final thoughts

The budget for LSAs in 2024 needs to be managed with innovative thinking, strategic resource allocation, and a focus on return on investment. Offering LSAs has numerous benefits, including enhanced employee well-being and a stronger employer brand, which far outweigh the initial costs.

A commitment to employee well-being through flexible benefits like LSAs fosters a more engaged, productive, and loyal workforce. This strategic approach benefits employees and contributes to your company’s long-term success and growth.