Lifestyle Spending Accounts (LSA): The Fully Customizable, Launch Anytime Benefit

Discover immediate and actionable ways to give your employees flex-freedom to choose with Lifestyle Spending Accounts. The fully customizable, launch-anytime benefit. Watch the video, and read the transcript.

(Modified to remove superfluous language for readability)

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Hi, my name is Kaleana Quibell. I’m a guest host here for Transform at The Desk. And here I have with me Alex, CEO, and Co-Founder of Espresa. Thanks for joining.

Alex Shubat, CEO + Co-Founder, Espresa //

Thanks, Kaleana. Thanks for having me.

What is a Lifestyle Spending Account (LSA)?

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Talk to me a little bit about Espresa. One thing that I find most interesting is you’re focusing on LSAs, so for anyone who doesn’t know what an LSA is, tell me about Lifestyle Spending Accounts.

Alex Shubat, CEO + Co-Founder, Espresa //

LSA stands for Lifestyle Spending Accounts (LSA), and used to be called things like reimbursements, wellness wallets, and stipends. But the industry converges this name, “LSAs” because I think it [is considered similar] with HSAs and FSAs. [Most] everybody knows those benefits.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

What are you seeing employees use the LSA dollars for? Are they using it for wellness? Are they using it for personal? What are some of the trends you’re seeing?

The launch anytime and off-cycle benefit of an LSA compared to traditional benefits

Alex Shubat, CEO + Co-Founder, Espresa //

The beauty about LSAs, or Lifestyle Spending Accounts, is there’s no one plan that’s the same as a plan another company launches. FSAs or HSAs are used the same for all companies. It’s a government-regulated program for a tax incentive for medical purposes.

LSA is more like whatever the company wants to incentivize their employees to use the dollars for. A very common approach is, in the past, if you go to the gym, we’ll reimburse you for your gym membership. But not everybody goes to the gym. Somebody wants to play hockey, and somebody wants to have a gym at home.

LSA is more like whatever the company wants to incentivize their employees to use the dollars for.

The company starts to increase that or expand on the incentive to include physical wellness, which is going to the gym and yoga classes, to emotional wellness, which is things like meditation apps or some coaching in stress management.

They start with financial wellness because if I’m stressed with my loan payment, whether it’s a school loan or my mortgage, and I need some advice, why not help with that?

They start with financial wellness because, if I’m stressed with my loan payment, whether it’s a school loan or my mortgage, and I need some advice, why not help with that?

Also, depending on [generationally] where you are in your life, your goals for expenses change. I know you have a child, so you probably care about childcare, right?

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Yeah.

Alex Shubat, CEO + Co-Founder, Espresa //

By the way, I see him on LinkedIn all the time.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Thank you. He’s a handful!

Personalized, Fully Customizable Benefits

Alex Shubat, CEO + Co-Founder, Espresa //

So, if you have kids, this could be childcare. Where, for example, I’m later in my career. I have elderly parents. It’s more important for me to have elder care. Some employees have pets, so they want to have pet care, right?

With Lifestyle Spending Accounts (LSA), the beauty about it is you can make it as diverse as you can and, as a result, as inclusive as you can. The result is you provide a benefit and engagement for your entire employee demographic.

With Lifestyle Spending Accounts (LSA), the beauty about it is you can make it as diverse as you can and, as a result, as inclusive as you can.

 

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

From the employer’s standpoint, how does Espresa make that easier to administer? Because that’s always been a tricky thing, right? Do you put it in the payroll? Do you ask for reimbursements? There’s compliance. How do you help with that?

Alex Shubat, CEO + Co-Founder, Espresa //

Absolutely. Great questions. We make it extremely easy for employers.

Once they launch it, it’s fully automated. Their biggest interaction with us is during the plan design [phase] because we want to make sure that the plan they’re customizing fits their employee population and their company culture. The company selects the launch date and the employee base with access to the reimbursement program.

The company, in the implementation phase, also decides if they will add on other benefits, such as volunteer reimbursements, incentivized rewards, and recognition programs that feed into LSA funds, or incentivized challenges that will add to an LSA wallet.

Once the plan is fully customized and designed, we launch the program. We utilize eligibility file feeds and payroll feeds. [Espresa] LSAs are fully automated.

[Espresa] LSAs are fully automated.

Now, there are multiple ways for employees to access those funds.

The traditional approach is the reimbursement approach. Employees go to their favorite e-commerce site. They go to their local yoga studio downstairs or around the corner from their home, or they use their preferred credit card. They buy the product and service in whichever way they like. They send Espresa the claim. We look at the claim within 24 hours. 90% of the claims are reviewed within 24 hours. Employees are going to get their reimbursement dollars in the next company payroll cycle.

We look at the claim within 24 hours. 90% of the claims are reviewed within 24 hours.

 

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Great.

Alex Shubat, CEO + Co-Founder, Espresa //

Usually, before their credit card payment is due.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Which is key, yeah.

Alex Shubat, CEO + Co-Founder, Espresa //

Which is key.

We have other solutions as well that help employees.

For example, there is an integrated marketplace or store, an in-platform store, so if they buy a subscription or a product through our store, they don’t have to cash out front. There’s no other out-of-pocket expense.

They buy the product, the LSA amount is deducted, that’s based on the product cost, and then we bill the employer for that amount.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

So, tell me a little bit about the marketplace because we hear the word marketplace a lot.

At Transform, we’re seeing a lot of innovation in vendors, so does that help employees find resources that they might not have heard of before? Or how does the marketplace work?

Alex Shubat, CEO + Co-Founder, Espresa //

It’s both. Sometimes we have great vendor partners that we add to the marketplace. The companies might have already had relationships with some of their partners. They would bring them, and this is the home for them now. The vendor management team and the partner team continuously look out for new and innovative products. And hopefully, again, the marketplace covers what’s in your LSA. We keep increasing it and making sure it’s all-inclusive for what’s in your company plan.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

That’s amazing. We’re in a time, of course, where I think a lot of companies care greatly about reducing spend or trying to condense a lot of different point solutions and things, so are you seeing that? Does this help cover the place of a lot of different things people might be looking at?

Alex Shubat, CEO + Co-Founder, Espresa //

That’s a great question, Kaleana. What we see is companies have multiple budgets. They might have an LSA budget or wellness budget. They might have some incentive programs.

For example, a typical well-being program incentivizes you to walk so many steps or get an annual health check, right, or do a BMI screening. Well, that’s a wellness budget. Right?

And what we’re seeing now companies combine them, and that’s why we are here at Transform launching what we call our LSA Plus product.

What is an LSA Plus? In addition to giving employers a choice of, let’s say, a fixed wallet, $500 a year, a hundred dollars a month, maybe that’s $1,200 a year. They can start with an amount and fund the wallet. And then, as employees complete some incentive programs, let’s say, again, they walk so many steps, or they get an annual health check, those dollars than are added to the LSA program.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Oh, interesting.

Earned Allowance or Incentive-Based Lifestyle Spending Account, LSA Plus

Alex Shubat, CEO + Co-Founder, Espresa //

Yes! We call that an Earned Allowance or Incentive-Based Lifestyle Spending Account or LSA Plus. There’s an economic headwind, and companies are looking. They’re all instructed, can you help us reduce the budget?

We call that an Earned Allowance or Incentive-Based Lifestyle Spending Account or LSA Plus.

That’s where Espresa is fortunate, the right place at the right time. We’re offering a solution that addresses their budgetary needs. We’re growing because what they’re doing is they’re taking these multiple budgets and combining them into a Lifestyle Spending Account and still incentivizing employees. And they’re doing this with what their employees value and find important to them, wherever they are.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Tell me a little bit about those products that you’re doing, the LSA Plus, and so on. Are there any trends you’re seeing in terms of how employers are using the product or what you’re seeing? A lot of influx for employers?

Alex Shubat, CEO + Co-Founder, Espresa //

One of the biggest trends that we’re seeing companies look for when seeking to deploy programs, especially if they’re global employees, they like to deploy something to the entire population. Again, this brings us back to inclusivity and geographical diversity.

One of the biggest trends that we’re seeing companies look for when seeking to deploy programs, especially if they’re global employees, they like to deploy something to the entire population. Again, this brings us back to inclusivity and geographical diversity.

 

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

And global is the point.

Alex Shubat, CEO + Co-Founder, Espresa //

With HSAs and FSAs, it was always a U.S.-based plan. Employers had to find some other programs for the dispersed and global populations, right?

A Lifestyle Spending Account, because it’s not an industry or government-regulated program, it’s up to the company to decide what the funding is and how to launch it in other countries.

With Espresa, one of our biggest advantages is that today we operate in 80-plus countries.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Wow.

Alex Shubat, CEO + Co-Founder, Espresa //

We support 150 languages. We have a global support organization.

We support 150 languages. We have a global support organization.

Again, I give an example. An employee goes to their local yoga studio in Japan. They’re going to submit their claim in the Japanese language with the Japanese Yen as the currency, and we’re able to process that.

When employers, benefits, and engagement teams start seeing that as a big win for them, not only launching a program for the US population but launching it globally.

And in fact, if you look at our book of business, 79% of our clients are global, and they’re launching global programs. It reduces the administrative burden. Global LSAs offer more inclusive benefits wherever you are. That’s a big trend that we’re seeing companies seek. Global inclusivity. Global availability. Without a heavy administrative lift.

Global inclusivity. Global availability. Without a heavy administrative lift.

 

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

And that’s a huge challenge for employers because without a product like yours, they’re trying to find something local or unique to each of those hundred countries, and that can be really burdensome.

Alex Shubat, CEO + Co-Founder, Espresa //

It is very difficult. And they’re always saying, we have all this for the affiliate U.S.-based company, and then we have these one-off items in different countries. And employees travel, talk to each other, recognize the differences in their benefits, and maybe feel like they are less important or aren’t offered equitable benefits.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

And one thing that’s interesting. Back in the day, when people were doing all of these gym stipends just through payroll or reimbursement, I think an issue with that, right, is they don’t get the reporting or understand how people use your, is there value? So how do you handle that at Espresa? What sort of information are you feeding back to the employer to show them the worthwhile?

Alex Shubat, CEO + Co-Founder, Espresa //

The analytics, thanks to our Development Team and my Co-Founder and CTO, Raghavan Menon. He comes from Google. We have an amazing platform with a lot of data that we can align. You can see what employees are spending. Look at the U.S., for example. What are employees spending on? What are the categories of choice? How much money is left in their wallet? How much money is left in their total budget? Then you can evaluate that with data segmenting the different countries.

We also have the ability to deploy different programs for different employee categories. So, for example, you don’t have to have the same amount for all employees. You can fully customize the benefit to what your employees want.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Interesting.

Alex Shubat, CEO + Co-Founder, Espresa //

You can offer benefits to meet your employer’s needs. The employer can offer the benefit to the population they select that they budget for. They could opt to offer benefits to interns. It could be full-time, part-time, remote, or in-person employees. Then you’re able to look at your data by demographic and support executive buy-in of the LSA program’s success.

We receive what we refer to as employee labels, we have a way to tag the employee categories, and we can then provide the feedback and the information back to the employer to show them what’s available and utilized in every category.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Amazing. So, you’re basically creating a system through which employers can give the dollars, allow employees to do whatever they want with it, and make sure that it’s a meaningful program.

Alex Shubat, CEO + Co-Founder, Espresa //

And it’s within the plan. That’s what we make sure about.

Kaleana Quibell, Vice President, Wellbeing + Partnerships, Sequoia //

Amazing. That is all the time we have for today. Thank you so much for joining me. And that is Live from The Desk.

Alex Shubat, CEO + Co-Founder, Espresa //

Thank you very much, and great to reconnect.