The most recent news and information financial professionals from corporates should be aware of in order to stay abreast of the constantly changing business.
Financial professionals who are planning their business’s expenditure on employee benefits are now faced with a new approach to take into consideration. The lifestyle spending account, also called LSAs, can be used to cover employee’s expenses on items that range from fitness, pet care cleaning services, as well as salon treatments.
LSAs are currently offered by 51% percent of companies tracked by the benefits platform Benepass, according to Benepass’s most recent benchmarking guide to benefits. It’s an increase from 37% in the previous year and is what makes LSAs the most popular benefit that companies surveyed for the study over benefits for fitness and wellness.
In a way, LSAs can be described as giving employees raises, however, with an alternative name and method that employees can access funds. Contrary to health insurance plans or 401(k) plans that are subject to specific laws and regulations and regulations, LSAs are perks which do not have a legal definition which means they are able to be used to cover nearly anything that an employer chooses to fund.
In addition to that wide array of choices to employees’ spending is the fact that LSAs aren’t able to provide tax-savings for employees of more traditional benefits. They typically are tax-exempt for employers.
Benepass stated that LSAs reflect an intention to provide the employees wellness stipends “in a way that promotes equity and inclusion.” Because LSAs don’t need the funds to be used for something specific, such as children or gym memberships, These benefits “allows employees to tailor their benefits to their individual preferences and lifestyle needs.”
Bryce Armbruster, controller at the corporate finance platform Rho and CFO Brew, said that while he was examining the options for employee benefits, LSAs appeared to him to be a great idea. LSAs provide “optics over [cost] efficiency” by providing employees with an extra amount of money to spend in a specific way even though there aren’t tax benefits that come with these plans.
“I think it’s a great company perk,” Armbruster added, noting that it communicates that the employer has “invested in what your employees value.” Armbruster said he pointed to a variety of tax-deductible benefits he’s encountered from other companies, including the stipends for vacations, and added, “I love the idea that employers are trying to give their teams an emphasis on work-life balance.”
Other popular taxable perks according to Benepass report, are the opportunity to receive stipends for health and fitness (45 percent of employers included are listed in the report) and working at home (43 percent). The amount of these benefits can be wildly different, from the average of $169 per month for LSAs to $5,420 per year in the 5 percent of businesses that provide parental support funds, Benepass found.
Benepass did not specify the number of companies that are included in its database however, spokesperson Annalisa Rodriguez said to CFO Brew via email that the companies that are included in its database are ranging from small to huge and employ more than sixty thousand people.
