Can I use a Lifestyle Spending Account (LSA) for flu shots?

You may be wondering if you can use your Lifestyle Spending Account (LSA) to cover the cost of flu shots.

LSAs are a flexible benefit that many employers offer to support their employees' overall health and wellness.

Let's take a closer look at what LSAs are and what types of expenses they typically cover.

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account is an employer-funded benefit designed to support your health and wellness. Your employer allocates a set amount of funds into your LSA, which you can then use to pay for a wide range of wellness and lifestyle expenses.

LSAs are becoming increasingly popular as employers recognize the importance of supporting their employees' physical, mental, and financial well-being. By providing an LSA, your employer is investing in your health and happiness, which can lead to increased job satisfaction, productivity, and retention.

Examples of LSA-eligible expenses

LSAs cover a broad spectrum of expenses related to your health and wellness. Some common categories include:

• Fitness: You can use your LSA to pay for gym memberships, fitness classes, personal training sessions, and athletic gear like workout clothes and shoes. Some LSAs even cover the cost of home exercise equipment like treadmills, stationary bikes, and weight sets.
• Professional Development: Many LSAs allow you to use funds for continuing education courses, professional conferences, and workshops. This can help you advance your career and acquire new skills while maintaining a healthy work-life balance.
• Care Services: If you have children or elderly parents who require care, your LSA may cover some of those expenses. This can include daycare, after-school programs, babysitting, and adult day care services. Some LSAs also cover pet care services like dog walking and pet sitting.
• Convenience Services: To help you save time and reduce stress, some LSAs cover convenience services like grocery delivery, meal delivery, house cleaning, and dry cleaning. This can free up more of your time to focus on your health and well-being.

Are flu shots an eligible expense for LSAs?

Unfortunately, flu shots cannot be paid for through an LSA because they are considered medical expenses. Medical expenses fall under the purview of tax-advantaged accounts like Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs).

This exclusion applies even to basic medical costs like vaccinations. For example, Dartmouth's LSA guidelines explicitly state: "Medical expenses that are eligible for medical insurance and/or FSA/HSA are not eligible for this benefit."

In contrast, FSAs and HSAs do cover flu shots as qualified medical expenses. Many providers, like Costco, offer flu shots starting at $19.99, which can be paid directly using FSA/HSA debit cards. The IRS allows FSA funds to cover immunizations without a prescription.

While your LSA may not cover flu shots, you can still use it for a wide variety of other health and wellness expenses. These could include fitness classes, stress-reduction programs, nutritional counseling, and more. Your LSA gives you the flexibility to invest in your well-being in the ways that matter most to you.

LSA vs FSA/HSA Coverage for Flu Shots

While LSAs cannot cover flu shots, Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) do. These tax-advantaged accounts are designed specifically for medical expenses, including preventive care like vaccinations.

Flexible Spending Accounts (FSAs)

FSAs explicitly cover flu shots as a qualified medical expense. You can use your FSA funds to pay for the vaccine without needing a prescription. Over 15 sources confirm FSA eligibility for flu shots, including preventive care provisions.

Many retailers, like Costco, offer flu shots starting at $19.99. You can pay for these directly using your FSA debit card, making the process quick and convenient.

Health Savings Accounts (HSAs)

Like FSAs, HSAs also cover flu shots as an eligible preventive care expense. You can use your HSA funds to pay for the vaccine at many retailers, pharmacies, and healthcare providers.

With an HSA debit card, you can easily cover the cost of your flu shot without having to submit receipts for reimbursement later. This makes getting your annual flu vaccine simple and affordable.

When deciding between using an LSA, FSA, or HSA for your wellness expenses, remember that medical costs like flu shots fall under FSA/HSA coverage. Reserve your LSA funds for fitness, mental health, professional development, or other eligible lifestyle expenses that support your overall well-being.

Benefits of Getting a Flu Shot

While your LSA may not cover flu shots, getting vaccinated offers significant benefits for your health, your family, and your community.

The CDC recommends that most people six months and older get a flu vaccine every year. Flu shots have been shown to reduce the risk of illness, hospitalization, and death from influenza.

Protects high-risk individuals

Flu shots are particularly important for vulnerable populations who are at higher risk for severe complications from the flu. This includes:

• Children under 5, especially those younger than 2
• Adults 65 and older
• Pregnant women
• People with chronic medical conditions like asthma, diabetes, and heart disease

Even if you are not in a high-risk group, getting vaccinated helps protect those around you who may be more susceptible. When more people get flu shots, it reduces the spread of the virus in the community.

Reduces healthcare costs

Influenza takes a significant toll on the U.S. economy each year. The CDC estimates that flu costs the nation $10.4 billion annually in direct medical expenses for hospitalizations and outpatient visits for adults.

Getting a flu shot can help reduce these healthcare costs by preventing illness and complications that require medical treatment. Many health insurance plans cover flu shots with little or no cost-sharing, and FSAs and HSAs can be used to cover any out-of-pocket costs.

Improves productivity

The flu can cause employees to miss days or even weeks of work, leading to millions in lost productivity for employers each year. The CDC Foundation reports that each flu season, nearly 17 million workdays are lost due to flu-related illnesses.

Getting vaccinated can help keep you healthy and productive throughout flu season. It also means fewer sick days spent caring for ill family members.

Many employers and schools offer free on-site flu shot clinics as a preventive health measure. Taking advantage of these programs is a simple way to protect yourself and support a healthy workplace.

How much does a flu shot cost?

The cost of a flu shot can vary depending on where you get it and whether you have insurance coverage. Without insurance, flu shot prices typically range from $20 to $70 per dose.

Many major pharmacies and retailers offer flu shots at competitive prices. For example, Costco offers flu shots starting at just $19.99 , which can be paid for directly using your FSA or HSA debit card. This makes it easy and affordable to get vaccinated without having to pay out of pocket.

If you have health insurance, your plan likely covers routine vaccinations like flu shots with little or no cost-sharing. Under the Affordable Care Act, most private health plans must cover certain preventive services, including flu shots, without charging a copayment or coinsurance.

Some employers and schools also offer free flu shot clinics as a benefit to their employees or students. Check with your human resources department or student health center to see if this option is available to you.

Local health departments and community health centers may also provide low-cost or free flu shots, particularly in underserved areas. These programs aim to increase access to preventive care and reduce the spread of influenza in the community.

When budgeting for your flu shot, remember that the cost of getting vaccinated is far lower than the potential costs of getting sick with the flu. By protecting yourself with a flu shot, you can avoid missed work days, medical visits, and other expenses associated with influenza illness.

When is the best time to get a flu shot?

The CDC recommends getting your flu shot in September or October, particularly if you are in a high-risk group. This timing allows your body to build up immunity before flu activity peaks, which typically occurs in February.

It takes about two weeks after vaccination for your body to develop antibodies that protect against the flu virus. So, even if you miss the recommended September or October window, getting vaccinated in November or December can still offer protection.

Remember, flu activity can continue well into spring, so it's never too late to get your shot. The CDC reports that significant flu activity can persist into May.

If you are pregnant, the CDC advises getting vaccinated before the end of October. This timing helps protect both you and your baby, as antibodies are passed on to the fetus during pregnancy.

Children who need two doses of the flu vaccine should start the process sooner, as the doses must be given at least four weeks apart. Your child's healthcare provider can advise you on the best timing based on your child's age and health status.

While your LSA may not cover the cost of flu shots , getting vaccinated is a smart investment in your health. By timing your flu shot right, you can maximize your protection throughout the season and reduce your risk of illness and complications.

What are the key differences between LSAs, FSAs and HSAs?

While LSAs, FSAs, and HSAs all help you save money on various expenses, they differ in several key ways. Understanding these differences can help you make the most of your benefits and choose the right accounts for your needs.

Funding Source and Tax Treatment

• LSAs are employer-funded accounts, and the funds are considered taxable income to the employee. Your employer sets aside a specific amount for you to use on eligible wellness and lifestyle expenses.
• FSAs and HSAs are primarily funded by the employee through pre-tax payroll deductions. This means you can lower your taxable income by contributing to these accounts.

Eligible Expenses

• LSAs offer more flexibility in terms of eligible expenses, covering a wide range of wellness and lifestyle costs like gym memberships, fitness classes, stress-reduction programs, professional development, and more. Your employer determines which categories are eligible under your LSA plan.
• FSAs and HSAs are designed for medical expenses. They cover costs like doctor visits, prescription drugs, medical equipment, and dental and vision care. FSAs can also be used for some over-the-counter medications and menstrual care products. HSAs provide the broadest range of eligible medical expenses .

Contribution Limits

• With an LSA, your employer determines the amount they will contribute to your account each year. This amount can vary widely depending on your employer's budget and goals for the program.
• FSA contributions are limited to $3,050 per year for 2023, per employee. If you're married, your spouse can also contribute up to $3,050 to their own FSA.
• HSA contribution limits are higher, at $3,850 for individuals and $7,750 for families in 2023. If you're 55 or older, you can make an additional $1,000 catch-up contribution.

Rollover and Portability

• LSA funds are typically "use it or lose it" within the plan year, although some employers may allow a short grace period or limited rollover amount. LSAs are tied to your employment, so you forfeit any unused funds if you leave your job.
• FSAs are also generally "use it or lose it," but some plans offer a grace period of up to 2.5 months or allow you to carry over up to $610 to the next year. Like LSAs, FSAs are tied to your job.
• HSA funds never expire and are fully portable, meaning you can take your account with you if you change jobs or retire. You own the account and can invest the funds for long-term growth.

While your LSA can't be used for flu shots or other medical expenses, it's a valuable tool for investing in your overall well-being. FSAs and HSAs are better suited for covering preventive care like vaccinations . By understanding the key features of each type of account, you can create a comprehensive benefits strategy that supports your health and wellness goals.

How can I maximize my employee benefits for flu season?

While your LSA can't cover flu shots, you have other options for using your employee benefits to protect yourself and your family during flu season.

Your FSA or HSA is the best way to pay for flu vaccines. These tax-advantaged accounts are designed for medical expenses like preventive care, so you can use your FSA or HSA funds to cover the cost of flu shots for yourself and your eligible dependents.

Many employers also offer free on-site flu shot clinics as part of their wellness programs. Taking advantage of these convenient opportunities can save you time and money while ensuring you're protected against the flu virus.

If your employer doesn't provide on-site flu shots, check with local schools, health departments, or community organizations. They may offer low-cost or free flu vaccine clinics, especially in underserved areas.

In addition to getting vaccinated, you can use your LSA to support your immune system and overall health during flu season. LSAs offer flexibility in covering a wide range of wellness expenses, such as gym memberships to help you stay active, nutrition programs to keep your diet on track, or stress-reducing hobbies like yoga or meditation.

Regular exercise, a balanced diet, and managing stress can all contribute to a stronger immune system, which may help your body fight off the flu and other illnesses. Plus, these healthy habits have benefits that extend well beyond flu season.

When planning your employee benefits strategy for flu season, think holistically about how your FSA, HSA, and LSA can work together to support your health and well-being. By using your FSA or HSA for flu shots and other preventive care, and leveraging your LSA for wellness expenses, you can maximize your benefits and stay healthy all season long.

A Lifestyle Spending Account (LSA) cannot be used for flu shots, but it can support overall wellness in other ways. For medical expenses like vaccinations, an FSA or HSA is the better option. Forma helps employers design flexible benefits that meet employees' needs, from LSAs to FSAs and HSAs.

Schedule a consultation with one of our experts today.