Can I use a Lifestyle Spending Account (LSA) for life coaching?

Are you wondering if you can use your Lifestyle Spending Account (LSA) for life coaching?

In 2025, more and more employers are offering LSAs as part of their benefits packages to support employee well-being.

But what exactly is an LSA, and how can you use it to invest in your personal growth through life coaching?

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account, or LSA, is a flexible benefit where your employer provides you with a stipend to spend on eligible expenses that contribute to your overall well-being. Unlike traditional benefits like health insurance, which have strict rules around what's covered, LSAs give you the freedom to choose how to allocate the funds based on your unique needs and priorities.

Your employer determines the amount they'll contribute to your LSA, usually on an annual basis. They also define the categories of expenses that are eligible for reimbursement. These often include things like fitness memberships, stress management programs, financial planning services, and personal development activities like life coaching.

The beauty of an LSA is that it empowers you to invest in your well-being in the ways that matter most to you. Whether you want to focus on your physical health, mental wellness, financial stability, or professional growth, an LSA can provide the financial support to help you pursue those goals. And with the flexibility to choose your own providers and services, you can tailor your benefits to your individual needs and preferences.

How do Lifestyle Spending Accounts cover life coaching?

General inclusion of life coaching in LSAs

Many LSAs explicitly list life coaching as an eligible expense. For example, Dartmouth College's LSA includes "Health/Life Coaching" as a reimbursable expense. Similarly, Espresa's LSA guidelines allow funds to cover "personalized coaching services," including life coaching and executive coaching. Lifetime Benefit Solutions' LSA also includes "personal development classes" and "health/life coaching" under their emotional wellness category.

Employer discretion in covering life coaching

Since employers define the eligible categories for their LSAs, coverage for life coaching can vary. Some employers may choose to restrict their LSAs to focus primarily on fitness or wellness, while others expand the scope to include professional development. For instance, Forma's LSA platform permits employers to include "career coaching or mentorship programs" if they choose. American Benefits Group's LSA also allows employers the flexibility to fund "life coaching" as part of their program.

To use your LSA for life coaching, first verify your employer's guidelines and check if life coaching is listed as an eligible expense. If it's unclear, contact your HR department or benefits administrator for clarification. Once confirmed, you can pay for the coaching upfront and submit your receipts for reimbursement via your LSA platform. Some employers may also partner with platforms that streamline payments directly to approved coaching providers.

It's important to note that while LSA funds are a great way to invest in your personal growth, they are typically considered taxable income, unlike pre-tax benefits such as HSAs or FSAs.

What are the benefits of using an LSA for life coaching?

Life coaching can be a powerful tool for personal and professional growth, helping you identify and achieve your goals, overcome obstacles, and develop new skills and perspectives. And when you use your Lifestyle Spending Account (LSA) to invest in life coaching, you can reap even more benefits.

Personalized growth and development

One of the key advantages of using your LSA for life coaching is that it allows you to tailor your personal development to your unique needs and aspirations. Whether you want to focus on advancing your career, developing your leadership skills, or achieving better work-life balance, a life coach can provide personalized guidance and support to help you reach your goals.

For example, if you're looking to take on more responsibility at work or prepare for a promotion, a career coach can help you develop a strategic plan, build your confidence, and navigate office politics. Or if you're struggling with stress or burnout, a wellness coach can help you develop healthy habits, set boundaries, and find more fulfillment in your personal and professional life.

Improved employee well-being and engagement

When employers offer LSAs that cover life coaching, they're not just investing in their employees' personal growth - they're also investing in the overall health and engagement of their workforce. Studies have shown that employees who feel supported in their personal and professional development are more likely to be satisfied with their jobs, committed to their companies, and motivated to do their best work.

In fact, companies that offer coaching and mentoring programs often see higher rates of employee retention and engagement. According to a survey by the International Coaching Federation, 80% of people who receive coaching report increased self-confidence, and over 70% benefit from improved work performance, relationships, and more effective communication skills.

Alignment with company values

By including life coaching as an eligible expense in their LSAs, employers can demonstrate their commitment to supporting their employees' overall well-being and growth. This can be especially valuable for companies that prioritize a culture of learning, innovation, and personal development.

For example, a company that values creativity and entrepreneurship might offer LSAs that cover business coaching or innovation workshops. Or a company that prioritizes diversity, equity, and inclusion might provide LSAs for leadership coaching and mentoring programs that help underrepresented employees advance in their careers.

Ultimately, by tailoring their LSAs to align with their company values and employee needs, employers can create a more supportive and engaging work environment that attracts and retains top talent.

How to use an LSA for life coaching

If your employer offers a Lifestyle Spending Account (LSA) that covers life coaching, you can take advantage of this benefit to invest in your personal and professional growth. Here's how to get started:

1. Verify employer guidelines

Before you book a coaching session, review your LSA's list of eligible expenses to confirm that life coaching is covered. If it's unclear or you have questions about specific providers or services, reach out to your HR department or benefits administrator for guidance. They can help you understand the parameters of your LSA and ensure you're using the funds appropriately.

2. Submit for reimbursement

Once you've confirmed that life coaching is an eligible expense under your LSA, you can proceed with booking your coaching sessions. Typically, you'll pay for the coaching upfront and then submit your receipts for reimbursement through your LSA platform.

Some employers partner with LSA platforms that streamline the payment process, allowing you to book and pay for coaching services directly through the platform. This can simplify the reimbursement process and ensure that your expenses are approved and covered.

3. Understand tax implications

When using your LSA for life coaching, it's important to keep in mind the tax implications. Unlike pre-tax benefits such as Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs), LSA funds are typically considered taxable income. This means that the money your employer contributes to your LSA will be reported as income on your W-2 and subject to income taxes.

However, even with the tax implications, an LSA can still be a valuable benefit for investing in your personal and professional development. By taking advantage of your employer's contribution and using the funds strategically, you can offset the cost of life coaching and other eligible expenses that support your overall well-being and growth.

To make the most of your LSA for life coaching, consider working with a coach who aligns with your goals and values. Look for a coach with experience and qualifications in the areas you want to focus on, whether that's career development, leadership skills, work-life balance, or personal growth.

Many coaches offer free consultations or introductory sessions, which can be a great way to explore whether they're a good fit for you before committing to a longer-term engagement. And don't hesitate to ask your HR team or LSA provider for recommendations or resources to help you find the right coach for your needs.

Are there any limitations on using LSAs for life coaching?

While LSAs offer flexibility in supporting your personal and professional development, there may be some limitations to keep in mind when using your funds for life coaching.

Employer restrictions

Depending on how your employer structures their LSA program, there could be certain restrictions around life coaching expenses. For example, some LSAs may only cover coaching services from certified or credentialed professionals, excluding coaches without specific qualifications.

Additionally, your employer may cap the reimbursement amount for life coaching, limiting how much of your LSA funds you can allocate to this expense. Dartmouth College's LSA, for instance, excludes expenses that aren't explicitly listed and limits reimbursement to $250 per year.

Documentation requirements

To ensure your life coaching expenses are eligible for reimbursement under your LSA, you'll likely need to provide documentation such as receipts or proof of service. This helps your employer verify that the coaching services align with their LSA guidelines and that the expenses were incurred within the applicable time frame.

When submitting your coaching expenses for reimbursement, be prepared to provide detailed information about the provider, the services rendered, and the dates of service. Some LSA platforms may require you to upload receipts or invoices directly, while others may have a manual claim submission process.

To get the most definitive answers about using your LSA for life coaching, review your employer's specific LSA policy or consult with your HR or benefits team. They can clarify any restrictions, documentation requirements, or other guidelines unique to your company's program.

Is life coaching through an LSA worth it?

Using your Lifestyle Spending Account (LSA) for life coaching can be a smart investment in your personal and professional growth. LSAs make coaching more accessible and affordable, allowing you to tap into personalized support without the full out-of-pocket cost.

Life coaching can help you identify and achieve your goals, develop new skills, and navigate challenges in your work and personal life. When you have access to coaching through your LSA, you can take advantage of this valuable resource to support your ongoing development and well-being.

Many employers recognize the benefits of offering LSAs that cover life coaching. Lifestyle Spending Accounts provide a flexible way for companies to support their employees' diverse needs and interests, from wellness and stress management to professional development and career growth.

If you're considering using your LSA for life coaching, take the time to review what expenses are eligible under your employer's specific program. Your HR or benefits team can provide guidance on the types of coaching covered, any provider requirements, and the reimbursement process.

Ultimately, investing in yourself through life coaching can pay off in greater self-awareness, improved relationships, and increased job satisfaction. And when you can access this support through your LSA, it becomes an even more valuable and worthwhile investment in your overall well-being and success.

Forma gives you the flexibility to use your Lifestyle Spending Account for life coaching and other well-being needs your employer chooses to support. If you're looking for a simple way to manage and maximize your LSA benefits, Forma makes it easy.

Schedule a consultation with one of our experts today.