Put Lifestyle Benefits to Work—Your Way

A lifestyle spending account (LSA) is an employer-sponsored, post-tax benefit account that reimburses employees for eligible expenses supporting their personal well-being and everyday needs. Unlike traditional benefit accounts such as FSAs or HSAs, LSAs are highly flexible and not limited to healthcare-related expenses. Employers fund these accounts with set allowances and define which expense categories qualify for reimbursement—ranging from fitness trackers and personal trainers to nutritional supplements, office equipment, pet care, meal delivery and childcare.

LSAs are structured to improve employee wellness, satisfaction and engagement by giving people the autonomy to choose benefits that match their lifestyle. These accounts do not carry tax advantages and reimbursements may be considered taxable income depending on the benefit plan configuration. Employers can align their LSA benefits program with broader financial planning goals while maintaining control over unused funds and budgeting through configurable rules and cadence settings.

A lifestyle spending account (LSA) can be configured by the employer to cover a range of wellness-related and quality-of-life expenses. Common covered items include exercise equipment, fitness classes, wellness programs, mental health apps, personal development courses and ergonomic office supplies. Many plans also include reimbursement options for personal trainers, childcare, pet care and meal delivery services, depending on the benefits package design.

LSA funds are post-tax and considered a taxable benefit to employees, unlike flexible spending accounts (FSAs), health savings accounts (HSAs), or HRAs which offer tax-advantaged treatment for medical expenses. Employers determine which categories qualify and what substantiation is required, giving HR teams control over how the LSA supports employee well-being while maintaining compliance and budget oversight. The flexibility in eligible items makes LSAs a modern addition to competitive employee benefits offerings.

A health savings account (HSA) is a tax-advantaged account used exclusively for qualified medical expenses, available only to individuals enrolled in high-deductible health plans. HSA contributions are made pre-tax, reduce taxable income and can be invested for long-term savings. Funds roll over year to year and remain with the employee even if they leave the company.

A lifestyle spending account (LSA) is employer-funded, post-tax and used to reimburse expenses related to employee well-being that are outside the scope of traditional health plans. LSA funds are not tied to a specific health insurance requirement and do not carry the same tax benefits or investment options as an HSA. Employers define allowable categories and any unused LSA balance is typically subject to plan rules for expiration or rollover.

Yes. Lifestyle spending accounts (LSAs) are treated as taxable income when employees receive reimbursements. The value of the benefit is typically added to the employee’s W-2 and subject to income taxes in the year it’s used. This applies regardless of the reimbursement category, including wellness expenses or lifestyle benefits.

Employers can choose to gross up the amount to offset tax impact, but that is optional. While LSAs don’t offer tax advantages, they remain a popular way to support physical health, improve employee satisfaction and reinforce employee engagement across different demographics.