Health Spending Accounts (HSAs) are now a common element of many employee health benefit plans, but what about Wellness Spending Accounts (WSAs)? You’ve likely heard talk of them as they too are rising in popularity. So, what are they and should you add one to your benefits plan?
What is Wellness?
Before delving into wellness spending accounts, it’s important to be clear on what exactly wellness is. It’s certainly a buzz word these days and there are a number of good reasons behind that.
In a nutshell, wellness means pursuing activities, choices, and lifestyles that lead to a healthy and fulfilling life. It’s about a proactive choice to pursue better physical and mental health. Broad elements of wellness usually focus on things like nutrition, fitness, personal development, and mental health. The idea is to make wellness a lifestyle change, not a “one off” event or idea.
Wellness should be viewed as ongoing disciplines where healthy habits are maintained on a daily basis.
Wellness Spending Account
As an employer, there are a number of ways to promote wellness at your company. Including a Wellness Spending Account as part of your employee benefits plan is just one of them.
A Wellness Spending Account works like a bank account. You choose the amount of money that is available for employees to use on eligible wellness expenses. This money sits in the employee’s “wellness bank.” When your employee pays for an eligible wellness expense, they can submit a claim to be reimbursed from their Wellness Spending Account. They will continue to be reimbursed for wellness expenses until their account is depleted.
Unlike a Health Spending Account where the Canadian Revenue Agency determines which expenses are eligible, a Wellness Spending Account is much more diverse and flexible. The tradeoff is that while Health Spending Accounts are tax-deductible benefits for your employee, a Wellness Spending Account is considered taxable income.
On the plus side, because Wellness Spending Accounts are not governed by the Canada Revenue Agency, you have a lot more control over which expenses are eligible. Typically, your benefits provider will have a standard list of eligible wellness expenses, but you can still have input on what is included.
Usually, eligible wellness expenses are those that focus on nutrition, exercise, and mindfulness. You can choose to cover an extremely wide range of expenses. Examples include:
- Gym membership or fitness classes
- Sports equipment (tennis rackets, skis, running shoes, skates, etc.)
- Wearable fitness trackers
- Personal development courses and books
- Meditation classes
- Over-the-counter supplements
- Dance classes
- Recreational activities (ski lift tickets, entrance fees for races, indoor rock climbing, and so on)
These are just a few examples of items that could be included in eligibility. In covering a broad range of wellness expenses, the ultimate goal continues to be incentivizing employees to proactively pursue a healthier lifestyle.
If you want to make wellness a priority in your organization, offering a Wellness Spending Account should be only part of your overall strategy. There are many other ways to promote wellness in your organization and help build it into your company culture.
Organizing a workplace running club or a lunchtime walking group can be a way to get people moving, and it doesn’t cost anything. It can also be a great way to build camaraderie in your organization.
Ensuring your employees have access to healthy food and snacks is another way to encourage a healthy lifestyle. Consider bringing in fresh fruit each week or organizing a lunch-and-learn on nutrition.
You can also run wellness challenges where employees strive to exercise more, practice mindfulness, or concentrate on getting enough sleep. These can be fun team-building activities and are especially effective when leadership teams are involved.
Why Include a Wellness Spending Account?
Including wellness in your employee benefits strategy makes sense for a number of reasons. Wellness is proactive, as opposed to many other health benefits which are reactive. Encouraging employees to pursue a healthier lifestyle should translate into healthier employees.
Healthier employees have fewer absences, lower presenteeism, and higher productivity. Wellness can also have a positive impact on claim costs for the rest of your benefits plan. Healthier employees will need fewer health interventions, so fewer health benefit claims. All of this is good for your bottom line.
A Wellness Spending Account itself is a great addition to your total compensation package because it balances cost control for your company with flexibility for your employees. Because you set the pre-determined limit for the wellness spending account, you know exactly how much it will cost your company. You can customize what is covered too.
Employees will love that they have flexibility and choice around what they can spend their wellness dollars on. Having wellness dollars to spend also gives employees an incentive to try new things, which means they may find a new way to become active.
Offering a wellness spending account is also good for recruitment and retention. It’s a competitive labour market and prospective employees will shop around to find the best total compensation package. Including a Wellness Spending Account is another way to set your organization apart from your competitors.
Good advice is key
Is wellness an integral part of your employee benefits program? Are you looking for a way to invest in wellness on your own terms at a price point that you want? A Wellness Spending Account could be the answer. Review your options with one of our licensed advisors on the phone or in-person or contact us for a comparison quote.
Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefit packages that work as hard as you do.