4 Things to Consider When Starting an LSA Program
Here are four things to think about when putting together an LSA program that can increase your success.
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Get the guideHere are four things to think about when putting together an LSA program that can increase your success.
Setting up a lifestyle spending account (LSA) for your employees is a relatively straightforward process compared to tax-advantaged accounts such as health savings accounts (HSAs) and flexible spending accounts (FSAs). Still, navigating the ins and outs of setting up an LSA program can be daunting when you are starting from scratch. How do you create a program that meets your organizational goals and encourages high employee engagement?
Here are four things to think about when putting together an LSA program that can increase your success:
First, you’ll want to budget how much you would like to contribute to the account for each employee, the cadence at which you’ll contribute funds, and what happens to unspent funds. The answers to these questions are all up to the employer. Some employers choose to offer $500 right at the beginning of the year, while others may allocate $50 per month to each employee. Employers can also choose whether to roll over unused funds or allow the funds to expire in a specific timeframe.
Next, you’ll want to determine the lifestyle categories and wellness areas in which the funds can be spent. What matters most to your employees? There are several key strategies that you can take to learn more about your employee base. The first is the good old-fashioned employee survey. Building and designing a survey is complex, and a focus group can help develop the line of questioning. Stay and exit interviews can also provide anecdotal data that highlight employee needs and what is motivating them to stay or leave.
You can fully customize their LSA design, including:
After making the decision to build an LSA, the next step is choosing the right partner to help you deploy and administer your program. Key factors to consider include:
Ultimately, you should view your LSA provider as not just a vendor, but a key partner to your benefits program. With a well-deployed program, you can engage 80-90% of your employees and delight them with flexible benefits designed to meet their individual needs.
Once the program is designed, education is key so that current and prospective employees are aware of the benefit, how it can be used, and what happens to unspent funds. Make sure that employees detailed communication about the platform. A lunch n’ learn is a helpful tool to get the conversation going while boosting engagement. Reducing the number of steps for employees to sign up can also increase engagement. If you can automate enrollment and eliminate account creation, your employees can start using their benefits in just a few clicks.
If you have employees in countries outside of HQ, you’ll want to consider their experience as well, particularly if your company plans to scale teams in those geographies. With your potential technology partners, you should explore global capabilities, including language, currency, cost of living adjustments, and platform feature parity, such as cards and reimbursements.
Designing an LSA program can be tricky, but it’s worth the investment. The benefits include increased recruitment and retention, greater flexibility for your employees, and cost savings. By paying attention to these considerations, you can create a program that your employees will love and engage with.
Have more questions about what it takes to craft a thoughtful LSA program? Reach out at sales@getbenepass.com.