Fitness and wellness, travel top list of most popular lifestyle spending account types
Employees overwhelmingly are using their LSAs to take care of their physical and mental health and wellbeing, demonstrating how effective these accounts are in providing a guilt-free avenue for employees to take care of themselves.
Lifestyle spending accounts, or LSAs, have emerged as attractive benefit options as the competition for talent heated up in recent years.
“Recent shifts in work culture have spurred employers to reimagine how they take care of their employees,” according to the flexible benefits platform Benepass. “Perks like office snacks and discounted gym memberships are nice, but they’re no longer enough to attract and retain the brightest talent. Instead, companies are turning to flexible solutions like an LSA to entice people to join their teams and keep employees happy.”
The 2024 LSA Spending Trends Report identified the most popular types of LSAs among U.S. workers:
- Fitness and broader wellness are in the top four spending categories by transaction volume and money spent. Employees overwhelmingly are using their LSAs to take care of their physical and mental health and wellbeing, demonstrating how effective these accounts are in providing a guilt-free avenue for employees to take care of themselves.
- Travel is the second-most popular category by spending, accounting for 17% of total spending. Taking a vacation is expensive, and when given flexible benefit funds, many employees use them on travel expenses so they can rest and recharge
- Pet care is another highly popular category of spend, with Chewy being in the top 10 of merchants by transaction volume and money spent. Pets are a part of the family, and people spend a lot of money on their furry friends. Allowing employees to use benefit funds on pet care is a strategy they highly value.
Related: HSA-like options for employees in high demand, survey shows
“People often enter their field of work because of their specific talents and interests,” the report said. “It makes sense then that employees’ spending habits vary by industry. LSAs enable employers to provide benefits that meet the wants and needs of all employees, regardless of the industry. When designing their LSA, companies should consider how their industry impacts the unique values and priorities of their employees.”
Lifestyle spending accounts can be a powerful benefit option that allows companies to provide more personalization than traditional methods of benefits administration, the report said.
“The modern workforce is increasingly diverse, and companies are tapping into the potential of LSAs to meet the wants and needs of employees of all backgrounds,” it concluded. “The data in this report underscore the incredible range of choices that companies can make possible for their employees by offering flexible lifestyle spending accounts.”