Offering competitive benefits is a crucial strategy for employers in a competitive job market, as it helps them meet the needs of a diverse workforce. Employers strive to pinpoint adaptable and attractive benefits to a diverse employee base while considering the related expenses.
Employees often prioritize benefits such as health insurance, paid time off (PTO), retirement plans, and flexible work schedules. These are not perks, but essential elements that cater to their unique needs and significantly enhance their quality of life. Recognizing this, many forward-thinking employers are now incorporating lifestyle spending accounts (LSAs) into their voluntary benefits plans. This innovative benefit allows employees to personalize their perks, further enriching their work-life balance and overall job satisfaction.
What Is An LSA?
A lifestyle spending account (LSA) is a new benefit that has caught the attention of many employers. LSAs are employer-sponsored accounts that enable employers to reimburse employees for merchandise and activities that promote physical, financial, and emotional well-being. Unlike health savings accounts (HSAs), LSAs are not tied to tax advantages and are free from similar constraints, offering a more flexible approach to employee well-being.
Why Should My Business Utilize This Account?
LSAs offer employers the flexibility to select the benefits they wish to provide, ranging from gym memberships and nutritional services to sports and dance classes. They can also cover home office necessities, technology needs, eco-friendly activities, and family support or pet care expenses. Employers allocate an annual contribution of $850 per employee to these accounts, but the funds are only disbursed when the employee uses them.
LSAs Unique Appeal
The rising popularity of LSAs can be attributed to the flexibility they offer employees in choosing benefits that align with their personal values. Employers, too, are finding these accounts to be a compelling tool for retaining high-quality talent and fostering employee satisfaction. The unique appeal of LSAs lies in their ability to empower employees with the choice of benefits that hold the most value for them compared to their peers. This customization makes LSAs a desirable plan. Employers have found that while the voluntary benefits they currently offer are valuable to those who use them, their overall utilization is low, leading to questions about where best to allocate resources.
Allocation Of Resources
A growing number of employers are reevaluating their benefits portfolio, trimming back on offerings that they see limited use to accommodate the introduction of LSAs. This shift allows employers to focus on benefits that genuinely resonate with their employees. For instance, if a benefit such as adoption assistance is only utilized by two percent of your workforce, it might be time to reconsider your investment. LSAs, with their broad appeal, are likely to cater to a wider demographic within your employee base.
LSAs see an impressive uptake, with about 80 percent or more employees using them. Employees enjoy the personalization and adaptability offered by these plans. Given the diverse lifestyles, family situations, and preferences of your workforce, LSAs present a unique opportunity for everyone to benefit. Redirecting your benefits expenditure could be the strategic shift your company needs to keep its top performers on board.
Partner For Sucess
At GMS, our comprehensive benefits package provides employers and their employees with a wide selection of benefits options. Our team of benefits specialists is dedicated to delivering the most appealing benefits packages, encompassing everything from employee assistance programs (EAPs) to health and wellness programs. Your employees are your biggest asset – provide them with resources and coverage that make them their happiest.
By leveraging the assistance of a professional employer organization (PEO) and integrating in-demand benefits, small business owners can draw in and retain exceptional talent, cultivate a positive work environment, and propel their organizations toward growth and success. Contact us today to discover how we can assist you in managing employee benefits for your expanding business.