Here are some thoughts I've been having over the past week on the rise of Lifestyle Spending Account (LSA) platforms as a wellness benefit. I intentionally steer clear of HSA/FSA benefits, as the tax advantages of those make it a more nuanced discussion. Have thoughts? Reach out at [email protected].
What are LSA platforms?
These platforms allow companies to allocate a stipend for employees to make purchases from within approved categories. This can be for anything from wellness, to home office supplies, to...DoorDash(?). Companies pay a flat per employee per month (PEPM) fee on top of the money they provide for purchases.
At the end of the day, LSAs are free money, and employees will never complain about that. But if your goal (and sense of corporate responsibility) is to create a healthier workforce, here are a few reasons why I think LSAs are the wrong choice.
Little to No Experimentation
To employees, these platforms are often seen as an extension of their salary. That means they look to use it to subsidize preexisting costs such as their gym memberships or their annual running shoe purchase— instead of "chancing" it on a new experience or solution. Wellness benefits should be about expanding people's mindset, getting them to experiment and explore new techniques and practices- not just double down on what they're already doing and "risk wasting the benefit".
Use it or Lose it Panic Buying
People aren't always ready to embrace change. Motivation comes in waves. But with LSA's "use it or lose it" policies, employees are usually left scrambling to make choices two days before the new year. They panic-buy iron supplements they don’t need just to feel like they 'got their money’s worth'. These strict timeframes are not conducive to being there for people when they're ready.
Stray from the Science
I think the original idea behind these marketplaces was that they were a way to direct employees towards products or services that could positively impact their health & wellness. As these companies are driven by an internal metric of utilization, often without meaningful guardrails, their product offerings and what they'll reimburse has drifted to anything and everything. From Bose headphones, to cable bills, to supplements with dubious medical claims, many of the products available are "hand-wavy wellness" at best.
ROI Equation is Upside Down
Obviously corporate wellness ROI is a challenge, but at the most basic level you should be asking yourself 'How much did I spend, and how much behavior change did I actually introduce?' With LSAs, it's easy to spend $1,000 per employee per year and see no behavior change. I believe you're better off providing access to a much more affordable, and much more actionable product that is also conducive to experimentation (and therefore behavior change).
Conclusion
LSAs are a crowdpleaser because they're free money. If your goal is simply to appease employees, then by all means. But if your goal is to drive cost effective wellness behavior change, then I think I would look elsewhere. By comparison, HappMatch is just $4.45 per employee per month and offers a library of expert tools that encourage employees to experiment and discover their next wellness obsession."
|
