WELCOME TO 2024 – where routine employee benefits like health insurance, long-term disability, gym reimbursements, etc. no longer guarantee a happy and engaged workforce.
HR leaders have begun shifting to more holistic and agile lifestyle benefits such as lifestyle spending accounts to accommodate changing priorities, evolving work models, and rising employee expectations.
Understanding the vital role of tailored and impactful lifestyle benefits is essential, and that's where the data below comes into play. Our comprehensive statistics on lifestyle benefits below will help you understand how widely they're adopted today, typical program budget, common program designs, and what employees purchase with their employee-sponsored funds.
But first, let's begin with a definition on what a lifestyle spending account is.
According to SHRM, Lifestyle Spending Accounts (LSAs) are defined as: "employer-sponsored accounts that enable employers to offer reimbursements to employees for merchandise and activities that promote physical, financial and emotional well-being."
While there is not currently a single universally accepted definition, most agree that the SHRM definition covers the fundamentals well.
Adoption of LSAs
- In a survey of more than 700 organizations conducted in March 2023, 13% of employers said they had an LSA in place or would offer one in 2024. That’s up from 9% of respondents offering an LSA in a survey conducted in 2022. (Mercer Insights, 2023)
- More than 10% of large employers already have implemented LSAs, while another 35% are considering them for 2024 (Business Group on Health’s 14th Annual Employer-Sponsored Health and Well-being Survey, May 2023)
- 7% of employers currently offer LSAs, and 38% are either planning to or are considering adding them by 2025 (WTW, 2024)
- 43% of companies are expected to offer LSAs by 2025 (Forma, 2024)
Key takeaway: LSAs are gaining significant traction, indicating a shift towards more comprehensive employee benefits (and away from point solutions).
Acquiring Budget
- 43% of employers indicate that lack of budget is the reason they haven't done this yet. (WTW, 2024)
- 75% of clients repurposed money to fund their LSA (Espresa LSA Benchmark and Trends Report, 2023)
Key takeaway: As companies slash benefits budgets, finding funds can be one of the biggest hurdles to getting started. The good news, however, is that by consolidating point solutions with low participation rates, LSAs can actually create cost savings.
LSA Program Budget
- Companies with under 100 employees spent $2,747 on average per employee per year on their lifestyle spending accounts in 2023 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Companies with 101 to 1,000 employees spent $1,431 on average per employee per year on their lifestyle spending accounts in 2023 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Companies with 1,000+ employees spent $647 on average per employee per year on their lifestyle spending accounts in 2023 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Company contributions generally range from $250 to $2,000 (Mercer Insights blog post, 2023)
- A range from $100 – $3,000 per employee and family per year (Brown & Brown, 2023)
Key takeaway: There is the significant variation in average annual spending per employee on lifestyle spending accounts (LSAs) based on company size, with smaller companies investing more to compete against large corporations.
LSA Program Design
- Typical expenses covered by an LSA include fitness center memberships, digital fitness subscriptions, financial counseling, home office expenses, weight management programs, caregiving, sports league and athletic club memberships, digital health app subscriptions, pet care (Brown & Brown, 2023)
- All-inclusive LSAs continue to dominate company offerings, with 57% of stipends occupying this category (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Quarterly LSA stipends result in higher participation rates, with a 75% average participation rate for quarterly stipends (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Learning and development stipends saw a 20% higher participation rate (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Birthdays gifts typically range $25-50 (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- Milestones range from $100-1,000 or more, depending on tenure (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- 57% of lifestyle benefit programs reset annually, 1% semi-annually, 9% quarterly, 8% monthly, and 25% never (Forma, 2022)
Key takeaway: LSA program design can have a significant impact on participation rates. All-inclusive, quarterly stipends are the best for maximum participation.
What Employees Purchase with Their Lifestyle Spending Accounts
- Data shows that employees are spending the most money on health and wellness claims (Compt Lifestyle Benefits Benchmarking Report, 2024)
- LSA claims submitted in 2023 were spent on 70,000+ unique vendors across all categories (e.g. wellbeing, learning & development, tuition, family, etc.) (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Food and health & wellness expenses comprise nearly half of all reimbursement claims (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average food claims amounts are $79 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average health & wellness claim amounts are $109 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee caregiving claim amounts are $203 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee coworking claim amounts are $162 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average student loan repayment employee claim amounts are $157 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee tech claims amounts are $167 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee personal travel claim amounts are $187 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee experience claim amounts are $147 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee financial wellness claim amounts are $146 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee productivity claim amounts are $142 (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Average employee anniversary bonus claim amounts are $141 (Compt Lifestyle Benefits Benchmarking Report, 2024)
Key takeaway: LSA purchases span a wide range of categories and vendors, underscoring the importance of providing employees with flexible, personalized benefits.
Lifestyle Benefits on Employee Happiness
- 84% of Compt surveyed users believe that the lifestyle benefits offered through Compt are a valuable benefit that makes them feel appreciated. (Compt Lifestyle Benefits Benchmarking Report, 2024)
- Lifestyle benefits demonstrated 50% more perceived value than a set option by employers (Forma, 2022)
- 46.8% of employees said that their lifestyle benefits "sparked joy" (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- 30.1% of employees surveyed said that their lifestyle benefits helped their family (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- 21% of employees surveyed said that their lifestyle benefits simplified their life (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- 16.1% of employees surveyed said their lifestyle benefits reduced their stress (Fringe Lifestyle Benefits Benchmarking Report, 2021)
- 11.2% of employees surveyed said that their lifestyle benefits gave them time back (Fringe Lifestyle Benefits Benchmarking Report, 2021)
Ready to enhance your employees' well-being with a Lifestyle Spending Account? At Compt, we offer flexible and customizable LSA solutions that cater to diverse needs. Request a demo today to learn more.
