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How to Win Internal Buy-In for an LSA Budget

Before implementing an LSA, internal stakeholders will want to ensure the program is worth it. Here's how to convince them.

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Employees today want more flexibility than ever, and lifestyle spending accounts (LSAs) are the ultimate tool for providing that. An LSA is a powerful way to improve retention and recruitment while boosting employee wellness, happiness, and engagement.

LSAs frequently boost engagement with benefits programs by offering employees more freedom to tailor their benefits to their personal preferences. Today, more candidates are evaluating potential employers for their flexible policies, wellness support, and inclusivity. 

But LSA programs are still often met with resistance from senior leadership because they are a fairly new perk in the market. To receive support and budget buy-in, you’ll need to highlight the long-term benefits of an LSA. Below are a few steps your team can take to win buy-in for a new LSA program. 

Define it

Not everyone may be familiar with an LSA program, and your team may need to highlight exactly what it is. A lifestyle spending account is a non-salaried allowance that can be used according to an employee’s personal preferences. Unlike flexible spending accounts (FSAs) and health savings accounts (HSAs), LSAs are fully funded by the employer and considered taxable income when spent.

Employers can outline a set of parameters for their lifestyle spending account, including what it’s called, spending categories, eligibility rules, and the contribution amount and cadence. Employers can even decide if funds expire at the end of each month, or if they will roll over so employees can purchase big-ticket items at the end of the year. 

Highlight the key benefits

Once the team is clear on the definition, you’ll need to highlight the key benefits of LSA programs: 

Recruitment and retention 

To combat the Great Resignation, many companies have reassessed their recruitment and retention strategies. Now, organizations must offer a culture built on employee engagement, flexibility, and work-life balance to improve recruitment and retention. Making employees feel cared for increases retention rates and ensures that you’re attracting top talent in today’s competitive market. 

To receive buy-in for an LSA program, highlight statistics that demonstrate how wellness support can improve recruitment. For example, Virgin HealthMiles/Workforce Magazine found that 87% of employees today consider health and wellness programs when choosing an employer. These numbers are even higher for Gen Z and Millennial respondents, with over 50% citing such benefits as a deciding factor. 

Many employees also leave jobs for mental health reasons. Mind Share Partners’ 2021 Mental Health at Work Report found that 68% of Millennials (50% in 2019) and 81% of Gen Zers (75% in 2019) have left roles for mental health reasons. 91% of respondents believed that companies should support mental health, up from 86% in 2019. 

Over the past few years, there has been a massive shift in how people think about work and its role in their lives. Make a case to senior leadership that emphasizes why mental health and wellness support is crucial to attracting and retaining top talent. 


Some companies may have limits on how much remote work or schedule flexibility they can offer due to the nature of their business, especially in industries such as manufacturing, construction, health care, or education. Even when there are limits to workplace flexibility, you can still create a positive culture through easy-to-use and personalized benefits programs. 

Building an LSA is ultimately about offering employees more choice and flexibility to increase the program’s usage and create employee goodwill. Pillars like food and groceries, wellness, mental health, and home office supplies can give your employees exactly what they need to streamline their workdays. 

Cost savings 

Unlike funds contributed to an HSA, employers only pay for the amount employees spend with an LSA. If employees choose not to spend their funds, employers keep that money. This can lead to cost savings at the end of the year while providing the employee with 100% of the benefit. With their LSA program, Bright Health saved over $250,000 annually due to voluntary forfeiture. It’s a win-win for employers and employees alike. 

You can also evaluate your current benefits and consider whether there are opportunities for cost savings by moving the budget into an LSA program. For example, website development platform Wix previously used a Grubhub corporate account to provide food benefits for their employees. After moving this budget into an LSA, they saved an estimated $75,000 in delivery service charges and fees. 


As your company grows, you will need to support even more employee needs through your benefits programs. Because of its inherent flexibility, an LSA is uniquely scalable and can adapt to new needs. 

With an LSA, it’s possible to expand your program to accommodate new spending categories at no extra cost. This gives your employees even more spending options and allows you to quickly change your program to adapt to current events, employee feedback, or company priorities. For example, nonprofit organization The Community Group added a new spending category to their LSA program to help employees pay for gas as prices rose due to inflation. 

“We want to show that we are aware of current issues,” said Katie Graham, Chief Strategy Officer. “It’s easy to call Benepass and ask, ‘Can we make sure that is covered?’” 

Benchmark against other organizations

A recent Mercer Insights Survey found that 70% of companies are considering adding an LSA to their benefits package. Benchmarking against other organizations in your industry may highlight where you are falling short. Closely examining your benefits also allows you to determine the return on investment (ROI) of current benefits. 

ROI is the biggest question leadership teams have about the benefits they offer. Assessing the ROI of your current programs helps you evaluate whether there is room for improvement. Are employees utilizing the benefits? What are the rates of participation? Some benefits, like a wellness program, may have specific goals in mind such as reducing health care premiums for the company. Understanding ROI can determine whether goals have been successful. It can also help HR teams build a budget for the following year. 

Examining your costs may also encourage senior leadership to think about current programs differently, especially in a post-COVID and increasingly remote or hybrid work world. If your workforce is hybrid, it might be time to reevaluate expensive on-site perks like a cafeteria or gym. 

Home office, food and grocery, and health and wellness LSA pillars may receive greater rates of participation since employees have more freedom over how they spend the funds. The same flexibility still allows on-site employees or hybrid employees to take advantage of perks closer to the office. 

Connect the program to larger business goals

Disengaged employees cost U.S. organizations around $450-$550 billion each year. Companies with highly engaged employees are 21% more profitable and enjoy higher customer satisfaction, increased profitability, healthier workers, better retention, and fewer workplace accidents. 

Employee engagement rates for LSAs are typically substantially higher than traditional single-merchant programs since employees can select the vendors that are most suitable to their unique location and needs. For example, at health insurance company Bright Health, 93% of employees participated in a new LSA program with an 85%+ employee satisfaction rate. Read more about Bright Health’s LSA program here

Interested in seeing more case studies to build your case to senior leadership? Check out our library of customer stories or contact sales@benepass.com for more information. 

Benepass Team