The rise of lifestyle benefits

Lifestyle benefits are aptly named – employees want benefits that supplement their lifestyle as part of their overall benefits package. Offering tangible lifestyle benefits not only helps your employees financially, it also makes them feel understood and valued by their employer. Lifestyle spending accounts (LSAs) are a great way for employers to offer versatile lifestyle benefits by allowing employees to choose which benefits they want to take advantage of.

How can LSAs help in today’s economy?
Due to forbearance and changing spending habits during the pandemic, a lot of people were able to both pay off debt and save. And when they spent, much of it was on durable goods. Today, many are starting to accumulate debt again and spending more on travel and other discretionary items. However, costs for things like transportation, parking and gym memberships have also increased to higher-pre-pandemic levels (or higher), coupled with a rise in inflation that is eating away at disposable income.

LSAs can help ease this burden by providing employees with added benefits as part of their compensation specifically for these expenses and more.

Which lifestyle benefits should employers offer?
Determining which lifestyle benefits to offer can be a difficult decision for employers. A good way to begin this process is to poll employees to understand which benefits they will actually use. Another way to ensure that lifestyle benefits will actually be used is to make them customizable or to offer a lifestyle spending account.

For example, an employee who works remotely will likely have different needs than an employee who commutes to work every day. The remote employee might want help with their internet bill or office supplies, while the commuting employee might want help with gas or public transportation expenses and parking.

The importance of LSA education
It is also important to ensure that employees understand their options when it comes to LSA offerings. Often we see employees neglect LSA coverage because they don’t understand which expenses are eligible, or how to allocate the funds properly. Providing an instructional demonstration, or even a meeting with a human resource professional could help a lot of employees feel more confident when opting in for these benefits.

Read more about the evolution of lifestyle spending accounts here.