Using benefit accounts to support the work-life relationship

Employees who struggle to balance their work and personal lives can suffer from health issues, poor job satisfaction, exhaustion, burnout, and problematic behavior on the job. Despite 72 percent of Statista survey respondents acknowledging the importance of looking at work-life factors when job-hunting, they often need help achieving work-life goals once employed.

Considering the vital role of the work-life relationship in worker effectiveness, wellbeing, and long-term commitment, employers should prioritize it across all facets of their operations, including their benefits programs. Brokers and TPAs can help by offering different benefit accounts, like lifestyle spending accounts (LSAs) for various wellness expenses, dependent care flexible spending accounts (DCFSAs) for child care financial assistance, and health savings accounts (HSAs) for retirement and financial peace of mind. 

First, let’s examine the work-life relationship and consider how employer benefits can provide support.

Evolution of the work-life relationship

In 1817, Welsh manufacturer Robert Owen suggested that a well-balanced life included eight hours each of labor, recreation, and rest. However, blue-collar employees at the time routinely worked up to six days a week and up to 16 hours daily, averaging 70-100 hours weekly, and work schedules didn’t improve until the early 20th century.

The eight-hour-day and five-day workweek caught on when adopted by Henry Ford for his factories in 1926. Influenced partly by Ford Motor Co. findings that workers produced more when they worked less, the 40-hour workweek became U.S. law through the Fair Labor Standards Act in 1940.

Since then, radical changes in family structure, household labor divisions, political landscapes, the economy, public health (e.g., the COVID-19 pandemic), and human resource practices have all combined to evolve the concept of work-life balance into what it is today.

Although workers now seek a greater balance between their work and personal lives, it’s become evident that the two can’t always be easily divided. Instead, the notion of work-life balance has transformed into a more holistic approach known as work-life integration. This perspective acknowledges that work is a critical facet of life that coexists with other essential aspects, including home and family, personal well-being, and community involvement.

The traditional idea of work-life balance measured the time spent on work and non-work activities. However, the definition of work-life integration can differ. Instead of viewing home and work as competing entities, work-life integration focuses on discovering methods to blend the two to prevent either from fully dominating a person’s time.

Supporting the work-life relationship

The benefit programs a company offers can significantly impact employee health, productivity, and retention. Some choices are obvious – e.g. health insurance, retirement plans, and paid time off – while others may not be as evident.

Today’s workforce is looking to integrate their work and personal lives in a manner they find both rewarding and sustainable. To help support those goals, employers and their advisors should consider including the following in their benefits program:

• Scheduled flexibility
• Lifestyle spending accounts
• Dependent care spending accounts
• Health savings accounts
• Student loan repayment assistance

Let’s consider how each of these benefits supports employee work-life relationships.

Scheduled flexibility

In MetLife’s annual Employee Benefit Trends Study for 2023, as well as a separate Paychex survey undertaken in 2022, respondents yearned for the benefit of time – flexibility in work schedules, remote and hybrid working options, additional paid time off, consent to take more unpaid time off, and a four-day work week. In a recent four-day workweek study, 39% of employees said they were less stressed, 62% found it easier to balance work with their social lives, and 55% demonstrated higher productivity.

Although not a benefit per se, the impact of schedule flexibility on work-life integration needs no explanation. There’s little doubt that this option is the most difficult to adopt for the average employer out of all the benefit types included in this article. However, based on research, adding this one option to your benefits program can be transformational in the lives of your employees.

Lifestyle spending accounts

LSAs provide a very effective tool for addressing diverse workforce needs and interests. These accounts can pay for or reimburse nearly any type of expense deemed eligible by the sponsoring employer, up to an annual maximum set by the employer. Unlike most other benefit accounts, LSAs can simultaneously include products, services, and activities from multiple areas of life.

Companies use LSAs to address a wide spectrum of physical, mental, emotional, and financial wellbeing benefits, from gym memberships to life coaching, financial planning services to theater tickets, home office equipment, continuing education courses, and more. LSAs are entirely funded by employers and are taxable to employees.

Although LSAs are still relatively new to the benefits arena, brokers and TPAs who offer them can set themselves and their employer clients ahead of the competition while providing a creative and effective option for improving the work-life relationship.

Dependent care spending accounts

An estimated 72% of all employees have some degree of caregiving responsibility for children or adult dependents (e.g., elderly or disabled parents) who require supervision while the employee is at work. Offering a dependent care spending account (DCFSA or DCAP) helps support employee efforts to juggle work and family responsibilities by substantially reducing the tax burden on up to $5,000 annually spent for caregiving. DCFSAs are funded by employees through pre-tax payroll deductions.

Historically, childcare has often not been considered by some employers to be a worthwhile investment. However, not offering dependent care benefits puts an employer at risk of losing workers (and paying costs of up to 150% of their annual salaries to replace them). Brokers and TPAs can save their clients significant money and hassle by promoting the inclusion of childcare assistance in benefit programs.  

Health savings accounts

Offering an HSA helps support the employee work-life relationship in three areas: health care, financial wellness, and retirement planning. HSAs are funded by employees through pre-tax payroll deduction, although employers often contribute “seed money” to encourage employee participation.

Available only to those enrolled in a qualified high-deductible health plan, HSAs provide “triple tax” savings by way of tax-free contributions, tax-free withdrawals for qualified expenses, and tax-free balance growth through interest and investments. They hold an advantage over 401(k)s because withdrawals from HSAs for qualified healthcare expenses are always tax-free, whereas 401(k) withdrawals for any purpose are taxed at the owner’s current tax rate (plus an early withdrawal penalty, if not yet 65 years old). 

HSAs also deliver tax savings of up to 30% to 40% on contributed funds, leading to an increase in the employee’s take-home (hundreds of dollars annually) and a decrease in the employer’s payroll tax matching expense.

Although Devenir research finds that HSA growth remains strong, many employers do not yet offer them and when offered, many employees don’t enroll. Brokers and TPAs are key to providing the education that is key to filling those gaps.

Student loan repayment assistance

Student loan debt has been in the news a lot lately, particularly after the Supreme Court struck down the Biden Administration’s proposed student loan forgiveness program. Assistance with student loans scores as either a “must have” or “very important” employee benefit in nearly every survey of Millennial and GenZ employees.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, employer contributions to a structured student loan repayment assistance (SLRA) plan are not taxable to qualified employees but remain a business expense write-off for the employer. Through 2025, employers can make up to $5,250 annually in matching employee student loan debt payments.

Offering some degree of SLRA can make all the difference in attracting and retaining quality talent, particularly those in their 20s and 30s. TPAs and brokers can gain new revenue by offering SLRA administration services.

Good work-life relationships benefit everyone

When employees have a balanced and healthy work-life relationship, they are happier with their day-to-day life, more engaged and productive at work, and less likely to become a turnover statistic. Companies that respond with supportive benefit programs such as those outlined above can avoid many of the issues employers now face.

Bo Armstrong is a national conference speaker and author of numerous white papers and articles on the healthcare benefits industry. As DataPath’s Chief Marketing Officer, Bo focuses on identifying emerging market trends within the benefits industry and advocating for customers and their needs within DataPath.