Lifestyle Spending Accounts (a self-insured, private spending account that an employer sets up for its employees) are gaining traction as the newest employee benefit. Employers decide the types of expenses that will be covered and how much an employee has access to. The reimbursement into the employee’s Lifestyle Spending Account is a 100% deductible expense to the employer as it is viewed as a business expense. It is however, viewed as taxable income to the employee.
Lifestyle Spending Accounts are gaining traction as the newest employee benefit.
In addition to providing a cash incentive to employees, the benefit shows employees that a company is committed to their healthy lifestyle and well-being. And as long as a company has at least one employee, this benefit can be added to its benefits arsenal.
Eligible expenses include items that support an employee’s physical wellness, financial wellness and/or emotional wellness, such as gym memberships; martial arts; golf, swimming, dance or tennis lessons; a personal trainer; marathon entry fees, student loan reimbursement; down payment or closing costs for a mortgage; identity theft services; child or eldercare, meditation classes; massage services; pet care; camping; and even hunting and fishing licenses. When setting up a company’s Lifestyle Spending Account, keep it mind the benefit should be wellness-related, like the purchase of an incumbent bike rather than a motorcycle.
Employers need to provide access to the reimbursement form, but it is up to the employee to pay for the item or service up front and then submit the claims form to the employer with a copy of the receipt for consideration.
For more information on this topic or to begin the process of setting up your company’s Lifestyle Spending Account, contact Blue Chip Benefits at Team@BlueChipBG.com or (888) 225-8244.