Can I use a Lifestyle Spending Account (LSA) for wearable fitness trackers?

You may be wondering if you can use your Lifestyle Spending Account (LSA) to purchase wearable fitness trackers.

With the growing popularity of devices like Fitbit, Apple Watch, and Garmin, many employees are looking for ways to leverage their benefits to support their wellness goals.

The good news is that, in most cases, fitness trackers are eligible expenses under an LSA. However, it's important to understand how these accounts work and what other wellness expenses they can cover.

What is a Lifestyle Spending Account (LSA)?

A Lifestyle Spending Account is a versatile employee benefit that's fully funded by the employer. Unlike traditional benefits like health insurance or retirement plans, LSAs allow employees to choose how they want to allocate their benefit dollars.

This flexibility empowers employees to select wellness and lifestyle expenses that align with their unique needs and preferences. Whether it's fitness equipment, mental health apps, or professional development courses, LSAs put the decision-making power in the hands of the employee.

Examples of LSA eligible expenses

LSAs can cover a wide range of wellness and lifestyle expenses. While specific eligibility may vary based on your employer's plan, here are some common examples:

Fitness trackers and wearables: Devices like Fitbit, Apple Watch, Garmin, and Oura Ring that track activity, sleep, and other health metrics are often eligible under LSAs.

Gym memberships and fitness classes: Many LSAs cover the cost of gym memberships, yoga studios, spinning classes, and other fitness-related expenses.

Wellness apps and subscriptions: Meditation apps like Headspace or Calm, fitness apps like Strava or MyFitnessPal, and wellness content subscriptions can be eligible LSA expenses.

Home office equipment: With remote work becoming more common, some LSAs allow employees to purchase ergonomic chairs, standing desks, or other equipment to create a comfortable and productive home office.

Financial planning services: Recognizing the link between financial well-being and overall wellness, some LSAs cover expenses related to financial planning, such as consulting with a financial advisor or enrolling in a budgeting course.

Benefits of using an LSA for fitness trackers

Using your LSA to purchase a fitness tracker can provide several advantages beyond just the financial savings. Let's explore some of the key benefits:

Tax advantages

One of the most significant advantages of using an LSA for fitness trackers is the tax benefit. LSA funds are considered taxable income only when reimbursed to the employee, not when the employer contributes the funds. This means you can use pre-tax dollars to purchase your fitness tracker, effectively reducing the overall cost of the device.

Flexibility and personalization

LSAs offer a high degree of flexibility and personalization when it comes to selecting a fitness tracker. Rather than being limited to a specific brand or model, you can choose the device that best aligns with your fitness goals, lifestyle, and personal preferences. Whether you prefer a sleek smartwatch like the Apple Watch or a dedicated fitness tracker like the Fitbit Charge, an LSA allows you to make the choice that's right for you.

Promotes employee well-being

By subsidizing the cost of fitness trackers, LSAs can encourage employees to prioritize their physical health and well-being. Fitness trackers provide valuable insights into daily activity levels, sleep patterns, and other health metrics, empowering users to make informed decisions about their lifestyle habits. When employers offer LSAs that cover fitness trackers, they demonstrate a commitment to employee wellness and create a culture that values healthy living.

Attractive benefit for recruitment and retention

In today's competitive job market, offering comprehensive and flexible employee benefits can be a key differentiator for companies looking to attract and retain top talent. An LSA that covers a wide range of wellness expenses, including fitness trackers, can be a compelling selling point for potential hires. By showing that your company values employee well-being and provides the tools and resources to support a healthy lifestyle, you can improve job satisfaction, reduce turnover, and build a stronger, more engaged workforce.

How do Lifestyle Spending Accounts work?

LSAs are employer-funded accounts that allow you to spend money on a wide range of eligible wellness and lifestyle expenses. Your employer determines the contribution amount and the specific categories of expenses that are covered.

Once your employer sets up the LSA, you can start making purchases that align with the eligible expense categories. This could include buying a new fitness tracker, signing up for a gym membership, or enrolling in a stress management course.

After making a purchase, you'll need to submit a receipt or proof of purchase to your LSA administrator. This is typically done through an online portal or mobile app, making the process quick and convenient.

It's important to note that LSA funds are usually subject to a "use it or lose it" policy within a specified time frame, such as a calendar year. This means that any unspent funds at the end of the designated period will be forfeited, so it's essential to plan your purchases accordingly.

Behind the scenes, a third-party administrator manages the reimbursement process, ensuring that expenses comply with the LSA rules set by your employer. These administrators, like Forma, specialize in handling the complexities of LSA management, including expense verification, reimbursement processing, and customer support.

How to get reimbursed for your fitness tracker

Using your LSA to purchase a fitness tracker is a straightforward process. Here's a step-by-step guide to help you navigate the reimbursement process:

1. Check your LSA's eligible expenses: Before making a purchase, review your employer's LSA plan documents or contact your HR department to confirm that fitness trackers are indeed eligible expenses.
2. Choose your fitness tracker: Research and select a fitness tracker that aligns with your wellness goals and preferences. Consider factors like features, compatibility with your smartphone, and price.
3. Make the purchase: Buy your chosen fitness tracker using your preferred payment method, such as a personal credit card or debit card. Be sure to keep your receipt or proof of purchase.
4. Submit your reimbursement claim: Log into your LSA administrator's online portal or mobile app and follow the instructions to submit your reimbursement claim. This typically involves providing details about the purchase, such as the date, amount, and merchant name, as well as uploading a copy of your receipt.
5. Wait for approval and reimbursement: Your LSA administrator will review your claim to ensure it complies with your employer's plan rules. If approved, the reimbursement amount will be processed and deposited into your designated bank account or added to your next paycheck, depending on your employer's arrangement.

Are all fitness trackers eligible for LSA reimbursement?

While many LSAs cover fitness trackers as an eligible expense, it's important to understand that not all devices may be reimbursable under your specific plan. Eligibility ultimately depends on the rules and guidelines set by your employer.

Most companies recognize the value of fitness wearables in promoting employee wellness and include them as a covered expense category. However, some employers may choose to exclude certain brands, models, or accessories from reimbursement.

For example, your LSA might cover the cost of a basic Fitbit or Garmin tracker but not the latest Apple Watch or Samsung Galaxy Watch. Similarly, your plan may reimburse the device itself but not additional accessories like replacement bands or chargers.

To ensure your fitness tracker purchase is eligible for reimbursement, carefully review your company's LSA plan documents or reach out to your HR department for clarification. They can provide guidance on which specific devices and models are covered under your plan.

It's also a good idea to keep your receipts and any relevant documentation when making a fitness tracker purchase, as you'll need to submit this information when filing a reimbursement claim.

If you find that your desired fitness tracker isn't eligible under your current LSA, consider discussing your options with your HR representative. Some companies may be open to expanding their eligible expense categories based on employee feedback and changing wellness needs.

Tips for maximizing your LSA for fitness and wellness

LSAs provide a valuable opportunity to invest in your physical health and well-being. To make the most of your LSA funds, consider these tips:

1. Plan ahead: Review your LSA's eligible expense categories and contribution limits at the beginning of the plan year. This will help you create a wellness budget and allocate your funds strategically.
2. Prioritize your wellness goals: Identify the areas of your health and wellness that you want to focus on, such as increasing your daily activity, improving your sleep quality, or managing stress. Use your LSA to support expenses that align with these goals, such as purchasing a fitness tracker, enrolling in a meditation app, or buying a yoga mat.
3. Take advantage of employer-sponsored resources: Many companies offer additional wellness resources and programs beyond the LSA, such as on-site fitness classes, health coaching, or stress management workshops. Combining these offerings with your LSA-eligible expenses can help you create a comprehensive wellness plan.
4. Stay informed about your LSA balance: Regularly check your LSA balance and spending throughout the year to ensure you're on track to use your available funds. Most LSA administrators provide online portals or mobile apps that allow you to easily monitor your account activity.
5. Encourage your colleagues to participate: Engaging in wellness activities with coworkers can boost motivation, accountability, and camaraderie. Share your positive experiences using your LSA for fitness and wellness expenses, and encourage your colleagues to take advantage of this valuable benefit.

By leveraging your LSA to support your fitness tracker purchase and other wellness expenses, you can take a proactive approach to your health and well-being. This not only benefits you personally but also contributes to a healthier, more productive workplace culture.

Lifestyle Spending Account considerations

When using your LSA to purchase a fitness tracker, it's important to keep a few key considerations in mind to ensure you're making the most of your benefits.

Contribution limits

Your employer determines the annual or monthly contribution amount for your LSA. Typically, these limits range from $500 to $2,000 per year. Understanding your specific plan's contribution limits will help you budget and plan your wellness expenses accordingly.

Keep in mind that LSA funds often operate on a "use it or lose it" basis within a specified time frame, such as a calendar year. Any unspent funds at the end of the designated period will be forfeited, so it's crucial to stay on top of your balance and make strategic purchases throughout the year.

Compliance and tax implications

Compared to other health-related accounts like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs), LSAs have fewer compliance requirements. This allows employers greater flexibility in designing plans that meet their employees' unique needs.

However, it's important to note that reimbursements from an LSA are generally considered taxable income, unless the plan is subject to specific restrictions. This means that the funds you receive from your LSA may be subject to income tax withholding and payroll taxes.

Your employer or LSA administrator should provide clear guidance on the tax implications of your specific plan. If you have questions about how your LSA reimbursements will be taxed, consult with your HR representative or a qualified tax professional.

Integration with wellness programs

LSAs can be a powerful tool for promoting employee well-being when integrated with a company's broader wellness initiatives. By offering an LSA that covers fitness trackers and other wellness expenses, employers can incentivize participation in health-related activities and foster a culture of well-being.

Many companies choose to combine their LSA with a comprehensive wellness platform that offers features like health risk assessments, personalized health coaching, and wellness challenges. By streamlining the administration of these programs, employers can create a seamless experience for employees and drive higher engagement in wellness activities.

If your company offers additional wellness resources or programs, explore how you can leverage your LSA in conjunction with these offerings to create a holistic approach to your health and well-being. For example, you might use your LSA to purchase a fitness tracker, then participate in a company-sponsored step challenge or virtual 5K race.

By taking advantage of the full range of wellness benefits available to you, including your LSA, you can create a personalized wellness journey that supports your unique health goals and lifestyle preferences.

Is a Lifestyle Spending Account worth it for fitness trackers?

Using your LSA to purchase a fitness tracker can be a smart investment in your health and well-being. Not only does it provide a cost-effective way to acquire a device that can help you monitor and improve your physical activity, but it also demonstrates your employer's commitment to supporting your wellness goals.

One of the key advantages of using an LSA for a fitness tracker is the flexibility it offers. Unlike traditional wellness programs that may provide a one-size-fits-all solution, an LSA allows you to choose the device that best suits your needs and preferences. Whether you prefer a simple step counter or a more advanced smartwatch with heart rate monitoring and GPS tracking, you can select the fitness tracker that aligns with your lifestyle and goals.

From an employer's perspective, offering an LSA that covers fitness trackers can lead to a more engaged, productive, and loyal workforce. When employees feel that their company values their well-being and provides the tools and resources to support a healthy lifestyle, they are more likely to be satisfied with their job and committed to their work. This, in turn, can result in reduced absenteeism, improved morale, and lower turnover rates.

Moreover, investing in your health through the purchase of a fitness tracker can yield long-term benefits that extend beyond the workplace. By using your device to monitor and increase your physical activity levels, you may lower your risk of chronic diseases such as obesity, diabetes, and heart disease. This not only improves your quality of life but can also lead to lower healthcare costs over time.

In addition to the health benefits, using your LSA for a fitness tracker can also provide financial advantages. Since LSA funds are typically contributed by your employer on a pre-tax basis, you can effectively reduce the overall cost of your device. This means that you can access a high-quality fitness tracker at a lower out-of-pocket expense compared to purchasing it with after-tax dollars.

It's worth noting that the value of using an LSA for a fitness tracker extends beyond the initial purchase. Many fitness trackers come with companion apps and online communities that offer ongoing support, motivation, and resources to help you achieve your wellness goals. By leveraging these tools in conjunction with your LSA-funded device, you can create a comprehensive and sustainable approach to your health and well-being.

Ultimately, whether an LSA is worth it for a fitness tracker depends on your individual needs and goals. However, for many employees, the combination of flexibility, employer support, and potential health benefits makes an LSA an attractive and valuable option for investing in their well-being. By taking advantage of this benefit and using it to purchase a fitness tracker that aligns with your lifestyle and preferences, you can take a proactive step towards a healthier, happier, and more productive life.

Forma makes it easy to use your Lifestyle Spending Account for fitness trackers and other wellness expenses. With a seamless reimbursement process and flexible benefit options, you can invest in your health without the hassle. Schedule a consultation with one of our experts today.