Employee Benefit Trends: What is a Lifestyle Spending Account?

Employee Benefit Trends: What is a Lifestyle Spending Account?

A Lifestyle Spending Account (LSA) offers employers an opportunity to help fund health and wellness costs that a traditional group health plan won’t cover. LSAs are often used as perks to attract and retain quality employees and could be a desirable piece of the employee benefits puzzle.

What Is a Lifestyle Spending Account?

A Lifestyle Spending Account (also called Personal Spending Accounts or Wellness Spending Accounts) is a relatively new employee perk that is designed to encourage spending on wellness activities.  Many employers already offer Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to help employees save and cover health-related costs but an LSA opens an entirely different type of spending.

In short, LSAs are flexible after-tax funds to support life’s everyday needs. Lifestyle Spending Accounts allow employers to build an account to fund employees’ everyday needs without the burden of managing additional reimbursements. Each employee is unique and a LSA gives the choice to use after-tax funds on expenses that aren’t covered by traditional benefits. With an LSA, employers create the program parameters by defining how much employees will receive and what the funds can be used for.  Typically, these benefits support the physical, mental, emotional and financial health of employees.

As employees demand customized benefits packages and more employers offer LSAs, it’s important for employers to understand the specifics of this spending account and consider if they are a good fit for their organization and employees.

What Are Some Examples of LSAs?

  • Financial Services (Financial Education, Student Loan Repayment)
  • Care Services (Child and Adult Care, Adoption and IVF Services, Pet Care)
  • Physical Health (Gym Memberships and Fitness Equipment)
  • Work from Home Expenses (Office Supplies and Office Equipment)
  • Professional Development (Continuing Education Courses and Conferences)
  • Mental Health Services (Counseling Services, Virtual Therapy)
  • Wellness (Nutrition Counseling)

How Does a LSA Work?

Employers are the decision-makers when determining what expenses are eligible for reimbursement through a Lifestyle Spending Account.  It’s another potential perk that employers can offer to improve their relationship with employees.  Additionally, the emphasis on health and wellness can help the employer foster a healthy workplace culture.

Let’s say that you have a lifestyle spending account with $1,000 in it for the year.  You spend $500 on a gym membership.  When you are reimbursed by your employer for the $500, you’ll have to report that as income at tax time.  Although you pay income taxes on the funds spent, it’s a way for employers to prioritize your wellness.  You’ll only have to pay taxes on your Lifestyle Spending Account if you actually spend the funds.

While many benefits, like health insurance, are seen as reactive perks for when problems arise, LSAs encourage a more proactive approach. By implementing a LSA, you can encourage your employees to focus on all aspects of wellness by giving them the financial means to build healthy habits and offset costs they’ll face along the way.

Remember, LSAs are entirely employer-funded so it does add to the budget.  If you do decide to offer LSAs, it is important to educate your employees on these additional benefits available to them to increase employee utilization. Employers are uniquely positioned to help employees understand the importance of LSAs and how to best spend and boost their overall well-being.

We are, after all, living in the age of personalization.  Everything in our lives, from our Netflix subscriptions to our Spotify playlists is customized to us and our preferences.  Likewise, lifestyle benefits can be designed in a way that addressed the various needs of your diverse workforce.  For example, a working parent can use their monthly allowance on childcare or work from home expenses while a Gen Z employee can use their allowance for paying down student loans or pet care.  LSAs offer the choice and personalization that your diverse, multi-generational workforce needs and wants.

Controlling Employee Benefit Costs Amidst Inflation

Controlling Employee Benefit Costs Amidst Inflation

Inflation is a silent budget killer- it causes everything to go up, from your groceries to your gas, as the purchasing power of money decreases.  Americans are feeling the pinch as the U.S. experiences the highest inflation level in 40 years.

Inflation has been particularly frustrating for Americans who are struggling to pay for items such as housing, food, energy, and vehicles.  However, consumer goods aren’t the only thing that have increased – employee benefit costs are also on the rise.  With rising inflation rates, many employers are struggling with rising healthcare costs.  A survey of large employers from the Kaiser Family Foundation found that 96% of respondents agree that the high costs of offering healthcare to their employees are excessive.

With inflation increasing, you may be tempted to cut benefits packages, but now more than ever, a generous benefits and perks package is crucial to retaining employees.  In fact, 63% of companies say that retaining is harder than hiring them.  Amidst the Great Resignation, HR is having to figure out how to alleviate the increasing benefit costs without passing those costs on to their employees and facing even greater turnover.  Fortunately, there are some strategies that employers can use to remain competitive in today’s market while still providing quality benefits for their employees:

  • Foster a Healthy Workforce – The healthier your employees are, the less likely they are to have extensive healthcare costs. Wellness programs are a great way to promote a healthy lifestyle.  A cost-effective way to provide wellness benefits while helping employees through periods of high inflation is through a wellness stipend. With a wellness stipend, you reimburse your employees for their wellness costs such as gym memberships, home exercise equipment and wellness apps.
  • Encourage the Use of Virtual Medical Services – With telemedicine, employees can schedule an appointment with your health care provider or specialist. They don’t have to drive to the doctor’s office, park or sit in a waiting room.  They can see their doctor from the comfort of their bed or sofa which makes it easier to fit into a busy schedule.  Telemedicine appointments are usually short visits, so employees can get back to work more quickly.
  • Supplement Your Group Plan With a Group Coverage HRA – One strategy employers can implement to lower costs while extending coverage is to add a high deductible health plan(HDHP) to their group plan offerings and supplement it with a group coverage HRA (GCHRA), also known as an integrated HRA.
  • Eliminate Benefits that Employees Don’t Use – Take a microscopic look at all the benefits you provide. Do you see any that aren’t being utilized enough to justify the cost of providing them?  A great way to learn which of your benefits your employees are and aren’t using is by sending out an employee benefits survey.  Your company can then invest the money from underused benefits to something that your employees value more.

While it may be tempting to simply reduce your benefits offerings during periods of inflation, it doesn’t have to be that way.   Comprehensive benefits attract better employees and retain them for the long haul—meaning employers benefit from a more productive and satisfied workforce.

Open Enrollment: Looking Backward to Plan Forward

Open Enrollment: Looking Backward to Plan Forward

When the autumn leaves fall and the weather turns cooler, we know it’s time to start thinking of open enrollment. Open enrollment season can be a confusing time. As you begin your research into which plan to choose or even how much to contribute to your Health Savings Account (HSA), consider evaluating how you used your health plan last year. Looking backward can help you plan forward to make the most of your health care dollars for the coming year.  Here’s what you need to know about your workplace benefits to maximize them:

1).  Know the Open Enrollment Dates

It is up to you to make sure you take advantage of the open enrollment period. Be sure you know when your company has open enrollment because it can be your only time to adjust benefits for the coming year.

2).  Evaluate Your Current Benefits

Before open enrollment starts, review the benefits you currently are receiving. Your pay stub can be an excellent resource to find this information; you should be able to find the benefits you are paying for under the deductions or withdrawals section.  Standard deductions might include medical insurance, dental insurance, 401(k) contributions, life insurance, vision insurance, long- term disability insurance, health savings account or flexible spending account contributions, and accidental death and dismemberment insurance.  Review those deductions to make sure you know what you’re paying for and whether you actually used the benefits.

3).  Ask These Questions to Decide What Benefits You Need

Everyone’s situation is different, but most employees should have at least medical, dental and vision insurance and make contributions to a 401(k) or similar workplace retirement savings account.

When evaluating your benefits package, consider what your needs will be or what life changes you can expect for the coming year:

  • Do you have a medical condition that requires ongoing care such as diabetes or heart disease?
  • Are you trying to get pregnant or are expecting a baby?
  • Are you getting married (or divorced)?
  • Is your child turning 26 and can no longer be covered under your health insurance?
  • Does your significant other have coverage, or will you need to include your partner in your health coverage?
  • Are you on track for retirement, or do you need to save more? Don’t forget to take advantage of your company match in your retirement account. This is free money for the future.

All of these are essential questions to ask yourself during the open enrollment season because they can make a difference in what benefits you choose to elect.  As you browse the different options, analyze the type of treatment and the amount of treatment you have received in the past. You cannot foresee every expense but focusing on the trends will help you make a sound decision.

4). Compare Out-of-Pocket Cost

Much like health networks, out-of-pocket costs are crucial when choosing the right plan for you and your family. Most health benefits summaries should highlight the amount you will pay in out-of-pocket expenses, including the pocket limit.

Your goal in comparing out-of-pocket costs is to narrow down the plans that pay a higher percentage of your medical expenses and offer higher monthly premiums. These types of plans are suitable for you if:

  • You need emergency care frequently
  • You are planning to have surgery soon
  • You often see a primary care physician
  • You have a pre-existing condition or have been diagnosed with a chronic disease like cancer or diabetes
  • Your household income is sufficient to cover the monthly premiums

5).  Do the Math

People focus on the monthly premium, but you also need to look at the deductible. For instance, if you have a choice between a lower silver plan premium of $345 a month for a plan with a $5,500 deductible, and a higher gold plan premium at $465 a month with a $1,750 deductible, you’re better off with the second plan if you anticipate needing more than $1,500 in medical care. With the second plan, your total annual cost for the premium and deductible comes to $7,330, a $2,310 savings over the lower premium plan.

6).  Look at Out-of-Pocket Costs

The deductible is just one out-of-pocket expense; you also have copayments and coinsurance. The three together are your maximum out-of-pocket costs. Under the Affordable Care Act, the maximum out-of-pocket limit is $8,550 for a single person and $17,100 for a family policy.

7).  Utilize Tax-Free Benefits

Flexible spending accounts (FSAs), health savings accounts (HSAs), and dependent care spending accounts provide wonderful tax advantages because contributions are made with before-tax income.  They can be used to pay for deductibles, prescriptions and health-related costs that are not covered by your insurance (braces, eyeglasses, etc.). At the end of the year, you lose any money left over in your FSA so it’s important to plan carefully and not put more money in your FSA that you think you’ll spend.  However, with an HSA, funds roll over from year to year which makes it a great way to save for future medical costs.

8).  Review the Provider List

Most health plans today have “in-network” providers. If you see those doctors and visit those hospitals, you pay less out of pocket than if you go outside the network. So, if you want to keep your own doctor and go to a certain hospital, make sure they’re on the provider list.

When it comes to choosing the best workplace benefits plan for you, education is your most significant defense against making substantial financial mistakes, including not taking full advantage of your employer’s benefits.  If you have questions about any of the benefits offered, ask your HR department for help or clarification.  And remember, looking backward on your past habits and expenses can be an important tool to help you plan forward for next year.

Eat Your Way to a Healthy Heart

Eat Your Way to a Healthy Heart

Each February we focus on ways to improve our heart health in honor of American Heart Month. This year we want to help you by turning your attention to the foods you eat and how to make smart choices with our “This or That” challenge!
Below you will see two foods to choose between. Your goal is to choose the food that is the healthier option. Answers can be found at the end of the challenge.

Diet Soda vs Carbonated Water
Skip the drink with the high levels of artificial sweeteners and choose carbonated water! Diet drinks have been linked to symptoms of metabolic syndrome. Some symptoms of this include high blood pressure, high blood sugar, and lower than normal HDL cholesterol levels. Pour yourself a glass of carbonated water and put a slice of fruit in your glass instead!

Butter vs Olive Oil
Pour on the olive oil to maintain good heart health. Butter is full of high amounts of saturated fat. Butter is also known to raise the bad cholesterol levels in your blood. Olive oil and even canola and sunflower oils contain heart healthy mono- and polyunsaturated fats.

Sweet Potato Fries vs French Fries
Warm up your new Air Fryer and start cooking sweet potato fries with a little olive oil. French fries are full of fat and salt and a study linked eating 2-3 servings of fries a week to a higher chance of an early death.

1 oz Salted Nuts vs 1 oz Potato Chips
Pass the pecans, please! When you choose nuts over chips, you are also choosing your health. Regular nut snackers are 14% less likely to develop cardiovascular disease and 20% less likely to develop coronary heart disease.

1.5 oz Dark Chocolate vs 2 Chocolate Chip Cookies
No matter how much you love Grandma’s cookie recipe, your heart needs you to choose the dark chocolate. A study has found that those people who eat dark chocolate 3 times a week reduce their risk of a heart attack or stroke by 11%.

T-bone Steak vs Grilled Salmon Fillet
Just keep swimming! Just keep swimming! Salmon is chock full of omega 3 fatty acids which reduce fat in your blood and reduces clogged arteries. Steak is famous for high levels of saturated fat and LDL cholesterol.

Coca-Cola vs Red Wine
Pop the cork, not the soda tab. Carbonated sodas are full of artificial ingredients and sugar. Red wine has been shown to increase your good cholesterol levels and has many antioxidants that can help protect the lining of the blood vessels in your heart.

You are now a “This or That” Food Challenge winner! Go celebrate with a grilled salmon dinner, a glass of red wine, and a handful of dark chocolate!

Sources:

https://www.webmd.com/heart-disease/ss/slideshow-foods-bad-heart
https://www.hopkinsmedicine.org/health/wellness-and-prevention/5-hearthealthy-food-swaps
https://www.mayoclinic.org/diseases-conditions/heart-disease/in-depth/red-wine/art-20048281

Communication in the Workplace

Communication in the Workplace

Today’s workforce looks markedly different than it did just 10 years ago. 1 in 3 workers in the US are millennials and this makes them the largest generation in our current workforce. The way this generation communicates makes it necessary for the office to adjust its messaging strategy. What was seen as top-notch communication tech in the early 2000’s has been replaced by new options. As we peer into 2020, let’s take a look at some new ways to communicate effectively with employees both in an office setting and across the globe.

Video Conferencing
Utilizing tech to communicate in your workplace is essential. Office spaces that were previously filled with people who interacted with one another daily now house screens and common space workstations. Because of this, video conferencing has become a necessity to build a sense of unity and community within a department. Employees that are in the office are able to see and interact with their coworkers that may be at their home office or even across the globe in a different country via video services like Zoom, GoToMeeting, and Skype. Collaborating on projects no longer requires you to sit across the table from your team as you can sit in front of a computer screen and share ideas and update progress.

Project Management
Since it is no longer commonplace to have all employees in the same office each day, managing workflow digitally is a necessity. Sites like Basecamp allow projects to be created and teams assigned to jobs within the project. As tasks are completed, team members update their progress online and everything stays organized. Information is easily shared because anyone can log on and read the latest update or ask for help. Emails aren’t lost in an inbox or spam box as the communication happens on one platform. It’s a great way to manage both a physical or virtual office.

Sharing is Caring
There are so many options for sharing files across platforms and with team members. Dropbox, Google Drive, and OneDrive are just a few examples of online tools to assist your team with sharing data, storing information and files in the cloud, and syncing files across multiple devices. These options can range from very basic and free to very secure and costly depending on your needs. Some services only offer small file storage and sharing capabilities and so you’ll want to do your homework to find an option should you have a large image file or data file that needs to be shared.

TXT 2 TLK
According to a survey with OpenMarket, 76% of millennials say texting is more convenient and allows them to communicate on their own schedule. 19% of them say they never check their voicemails. Why is this important to you? With millennials comprising the largest percentage of of the current workforce, you need to make sure you are communicating with them the best way possible. Texting to communicate upcoming events, meetings, reminders, or even to conduct employee surveys is a great option for relaying information to your staff. One thing to remember is that when sending a message via text, the context or heart behind the message is somewhat harder to convey than when delivering it verbally. Make sure the message is not open to interpretation so that the end result isn’t skewed.

As we ring in the new year, take the time to consider new ways to communicate and conduct business in your physical and virtual offices. Test out the methods mentioned here and maybe you’ll find a great new avenue for connecting with your employees!