Mercer Snapcast with Espresa’s Ryan Ramsey: How Lifestyle Spending Accounts (LSAs) are Shaping the Modern Workplace
Discover immediate and actionable ways you can create Lifestyle Spending Accounts (LSAs), the most wanted new employee program. Watch the snapcast and/or read the transcript below.
Welcome to our Snapcast 3.0! I’m here with Ryan Ramsey from Espresa. He’s one of our featured vendors at our upcoming event on April 21st at the Frisco Star. Before we have that event, we thought it would be a great opportunity to share a little bit more information about Espresa and lifestyle spending accounts. Ryan, you want to tell everybody about yourself?
First of all, thank you for having me. I’m super excited to be here! And, as Jennifer said, I’m Ryan Ramsey and I’m the VP of Strategic Alliance and Partnerships at Espresa. And a big part of my role is really working to build and strengthen relationships with our consulting partners and help educate the market about some of the exciting things that we’re doing around lifestyle spending accounts and other culture initiatives. So thanks for having me, Jennifer.
You bet. Well, do you mind telling us a little bit about what is a lifestyle spending account?
Absolutely. These are incredible benefits that I wish, in all of my consulting days, that we had access to.
At the highest level, a lifestyle spending account or an LSA is really a flexible wallet of money that an employer makes available to employees
Those employees then have the option to go choose things, typically a wide range of benefits or expense types that they truly value. And they can really get benefits that are meaningful to them.
Now LSAs don’t have the same restrictions or governance that other spending accounts do. And so that means that employers can have a lot of flexibility in the types of benefits and expense times they can make available. They can certainly accommodate some of the traditional things that employers have made available over time, whether that’s tuition reimbursement plan, various work-from-home stipends, that sort of thing. But to me what’s really exciting about these is some of the new and creative and innovative things that employers are making available. Whether that’s thinking about wellbeing from truly a total wellbeing capacity to things like family care, lifestyle benefits, community impact. We’re thinking about work from home or hybrid work in new and different ways and how they support their employees, so really, really exciting.
It is very exciting. Are these pre or post tax?
Yeah, that’s a really common question. So, LSAs in and of themselves aren’t tax-advantaged, like other spending accounts. So I would say that the majority of expenses that employers tend to flow through these type of accounts tend to be post-tax. However, we absolutely can accommodate both pre and post tax. And the way we do that is we integrate with payroll so we have the ability to code expenses in different ways. So, if we have pre-tax benefits that are eligible for expense or used for by employees, we feed that information right into payroll and the appropriate taxation is applied at the time of reimbursement, so short answer, pre or post-tax.
Love it. Why do you think that employers are really moving in this direction? Why do you see the demand?
Yeah, so it’s pretty interesting because lifestyle spending accounts, in and of themselves, have been around for quite a while, but they just haven’t seen the uptick. A lot of that had to do with the fact that there weren’t vendors like Espresa that were purpose-built to administer these things. Outside of that, I would say there’re a lot of different advantages and benefits to working with them, but there’s really four things that jump to the top for me. And the first is their ability to really deliver personalized value for every single employee. So, if you think about it, if your employer gives you money, that you can spend truly on something that you value, how incredible is that?
No matter where you are, what you think is important, you have a benefit that’s valuable to you. And so that’s really, really unique in the benefit space these days
They’re also incredibly flexible so employers can use them to meet a wide range of employee needs. They’re also highly engaging and it’s not rocket science when you think about it. If you give employees money to spend on things they truly value, they tend to use it. Most of our clients see participation in the range of 80 plus percent. And then, finally, the thing that really tops it off for me is really their ability to be used as a global tool.
So for employers that have international employees, you can really make these programs available in any country, any language, any currency
LSAs are a really powerful option to start thinking about benefits parody and inclusivity around the globe.
And there’s a lot more to it. I know we’re going to have time in a couple of weeks to talk more about it in person, but those are the things that really stand out to me.
Well, this was great, Ryan. And again, the intent of these Snapcasts is to bring Mercer’s point of view. And we really are seeing a significant uptick in a desire for employers to offer LSAs. We hope that you’ll join us on April 21st at the Frisco Star. Again, thank you again for your time, and we look forward to seeing everyone