First Things First: What is a Lifestyle Account?
A Lifestyle Account (also referred to in the industry as a Personal Spending Account or Wellness Spending Account) is an employer-sponsored employee benefit that is quickly gaining popularity in the benefits space.
Unlike a traditional employee benefits plan, Lifestyle Accounts are not an insurance product. Lifestyle Accounts are a way for employers to deliver flexible lifestyle benefits that employees will actually use and enjoy. A Lifestyle Spending Account is an account that employers deposit a set amount of money into on a predefined basis, which employees can then spend on expenses that have been approved by the employer. The account works much like a bank account.
Ultimate Guide to Lifestyle Spending Accounts
The ultimate guide to Lifestyle Spending Accounts (sometimes referred to as Personal Spending Accounts, or Wellness Spending Accounts).
Things a Lifestyle Account Can Cover
Because a Lifestyle account is not an insurance product, there is technically no defined category of expenses that a Lifestyle Account is limited to. (Want to help fund your employees’ model train collection? Technically possible!) However, Lifestyle Accounts are primarily designed for employers to help employees with lifestyle expenses that they already incur (i.e. household expenses), or to support health and wellness costs.
You may have already heard of some of the more common expenses being offered as a work perk by some employers: fitness allowances, transportation stipends, company-paid lunches – Lifestyle Accounts can include all of those things and much, much more! At the end of the day, the control is with the employer on what they would like to cover (or not cover).
Typical Lifestyle Account categories can include (but are not limited to):
- Fitness, Sports & Equipment
- Child & Petcare
- Financial Services
Let’s explore these categories more in depth.
Admittedly a somewhat vague term, the wellness category of Lifestyle Accounts can cover a wide range of expenses that range from vitamins and nutritional supplements and weight loss programs, to holistic and non-traditional healing, to therapy and coaching and even midwifery.
Many of these expenses overlap with what may be covered under a traditional insurance plan or Health Spending Account (HSA), making it possible for employees to supplement their existing coverage using their Lifestyle Account.
This is a great option as well to help cover gaps in HSA coverage that may exist from variance in provincial eligibility of certain practitioners. (One caveat to keep in mind here though, is that these Lifestyle expenses will be considered taxable benefits by the CRA.)
2. Fitness, Sports & Equipment
Fitness is typically the most common category of lifestyle benefits, with many companies offering lifestyle benefits specifically dedicated to fitness.
Helping employees with fitness-related expenses encourages employees to stay physically fit and in shape. There’s plenty of research that shows that encouraging physical activity in employees is beneficial, from reducing presenteeism to reducing long-term healthcare costs to increasing brainpower.
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Fitness expenses encompassed in the Fitness category include gym memberships, fitness classes, personal training (including virtual training), exercise equipment, and even sportswear.
Another lifestyle account category you may be familiar with is Transportation, with many companies already providing transportation stipends or discounts on public transit passes to their employees.
Let’s face it: most people consider commuting to be one of the least enjoyable parts of the typical workday. While there’s not much an employer can do about city gridlock, it is possible to take some of the tedium of commuting away through contributing to an employee’s transportation expenses. These include things such as public transit, gas, parking, and rideshare services/taxis.
Employers can incentivize and encourage continued learning, skilling up, networking, and professional growth through the Education category of lifestyle benefits.
Whether it be for conferences, seminars, course fees, professional dues, industry events, or repaying student loans, companies can help their employees in their professional and personal development through helping with the reimbursement of educational expenses.
5. Child & Petcare
We all know that raising children or pets can be expensive. Employers can help cover the cost of childcare and petcare while showing they are invested in their employees both inside and outside of the office.
From daycare, lessons and programs, and tutoring to vet bills, pet insurance, and pet sitting and walking services, employers can help pitch in with the care of their employees’ loved ones.
Anyone can get bogged down by the routine errands and chores that life brings. Helping your employees eliminate the distractions of these mundane, often time-consuming tasks means that they can focus their time on what matters to them most.
The Convenience category emcompasses expenses such as food delivery, groceries delivery, and shipping expenses for online purchases. It can cover the expenses of a home office too, if your employees work from home; furniture, office supplies, or even electronics such as a second monitor.
With many employees working from home on a regular basis, it’s in a company’s favour to help configure employees’ home setups to enable ergonomics and productivity to help workers stay productive.
7. Financial Services
There is increasing research that productivity at work increases when employers help employees with their personal financial management.
The Financial Services category of Lifestyle Accounts enable employers to help contribute to employees’ personal finances. This may range from personal savings and investment accounts (e.g. TFSA, RRSP, RESP), student loan repayments, financial and estate planning, or credit counselling.
Though lifestyle benefits typically only consist of a minor percentage of an overall compensation plan, a regular monthly, quarterly, or annually lifestyle account deposit that goes into an employee’s savings can go a long way in the long run!
8. Entertainment & Travel
While you’d want your employees to work hard while on the clock, the importance of taking the personal time to relax, unwind, and recharge is equally important. The Entertainment & Travel category offers employers the chance to re-enforce their values and company culture of work/life balance.
The Entertainment category is designed for employers to help their employees relax and unwind in their offtime. Think of all the fun things you envision your employees doing to reset and get their minds off work: movies, concerts, sporting events, museum visits, and all the expenses associated with travel; a Lifestyle Account can cover those too!
Whether you’re a non-profit organization or are just passionate about giving, you can help your employees give back to their communities and the world at large through supporting charitable causes.
This can be a valuable addition or replacement for company charity days that help back your values and enable employees to not only spend their lifestyle benefits on themselves, but to contribute to the causes important to them.
Why Offer Lifestyle Accounts?
Lifestyle benefits are an excellent way for employers to make their overall compensation and benefits packages pop and help attract top talent. By keeping your benefits fresh, you bring great employee benefits to your employees, helping boost loyalty and employee retention rates.
In addition, lifestyle benefits are entirely customizable. So regardless of your individual employees’ lifestyles and the expenses that come with it, the wide array of things they can put their sweet lifestyle benefits towards means that all your employees can derive value from their Lifestyle Accounts.
Lifestyle benefits are also the perfect way for employers to demonstrate their commitment to their values. While it’s easy to “talk the talk,” a lifestyle account helps bring your company culture to life by offering your employees something they can be proud to receive.
Salary and insurance plans are a dime a dozen, but your employees will be chuffed to boast about that brand new Pelaton that you helped them buy!
Honeybee’s Allowance Account
At Honeybee, we know lifestyle benefits inside and out. That’s why our Allowance Accounts are among the most well-regarded lifestyle accounts in the industry.
With easy, painless administration and setup, Honeybee Allowance Accounts allow you to quickly set it and forget it – the pinnacle of benefits administration! Our Allowance Accounts are housed within our proprietary digital app, providing employees with a sleek, modern Honeybee-exclusive user experience.
Our Allowance Accounts are able to offer all of the categories this article listed and more, Conversely, employers may also choose to limit the categories they would like to reimburse their employees, making Allowance Accounts a truly entirely customizable product.
As with all of our product offerings, Honeybee has designed our Allowance Accounts to maximize your benefits investment and keep employees healthy, engaged, and excited to continue working their best – just as employee benefits were intended to do.