5 smart ways to find budget for personalized benefits and LSAs

Personalized benefits, and Lifestyle Spending Accounts in particular, sit at the top of most total rewards wishlists right now. But the organizations that find a way to fund them aren't necessarily the ones with bigger budgets. They're the ones that stopped treating budget as a fixed constraint and started treating it as something worth reengineering.

The truth is that most companies are already sitting on the dollars they need. They're just spread across underused programs, inefficient tools, and vendors that were never set up to talk to each other. At Forma, we call this the “more is more” paradox.

If you're a benefits leader looking to make the case for flexible, personalized programs without walking into Finance asking for new money, this article is built for you.

Key takeaways

• Most companies already have enough budget for an LSA. The goal is to redirect it more strategically, not find more of it.
• Consolidating fragmented point solutions into one platform is one of the fastest ways to reduce administrative costs and vendor fees.
• Notional funding models can dramatically reduce projected program spend compared to assuming full utilization at face value.
• Building a turnover-cost argument gives Finance a number-driven reason to approve new or expanded benefits spend.
• Forma gives benefits and total rewards leaders a single platform to consolidate, launch, and scale flexible spending accounts, without increasing overall benefits spend. Schedule a demo today to see how teams do more with the budget they already have.

Why budget is the first barrier for personalized benefits

Getting approval for a new or expanded benefits program is rarely about whether employees want it. Utilization data, engagement scores, and retention benchmarks can all make the case. What slows things down is almost always the same conversation: where does the money come from?

Benefits budgets tend to be treated as immovable. Once programs are locked in, reallocation requires internal justification, vendor conversations, and often a full procurement cycle. That inertia is what keeps low-ROI programs on the books long after they've stopped delivering value.

The good news is that many benefits leaders have found real, repeatable strategies for surfacing that hidden budget, often without needing Finance to sign off on a dollar increase. The five approaches below are practical, they work at enterprise scale, and they don't rely on an optimistic budget forecast to get started.

5 ways to secure a budget for personalized benefits and LSAs

Finding the budget for an LSA or flexible benefits program is less about new funding and more about rethinking how existing dollars are allocated. These five strategies give you a concrete place to start, whether you're making the case for the first time or trying to expand a program that's already running.

1. Consolidate point solutions into a single platform

The average mid-size company runs between five and fifteen separate benefits programs, each with its own vendor relationship, contract, admin workflow, and renewal cycle. Gym memberships, remote work stipends, professional development reimbursements, commuter benefits: individually, each one seems manageable. 

Together, they represent a significant amount of duplicated spend and administrative overhead.

When you consolidate point solutions into a single spending account platform, those per-program vendor fees start to disappear. Redundant admin time collapses. And because employees access all of their benefits in one place, utilization tends to go up rather than down.

The budget you free up from eliminating redundant vendors and platform fees can often cover the cost of an LSA on its own. What makes this approach compelling to Finance is that it frames the LSA as a consolidation play, not a new spend line.

What to audit when consolidating:

• Vendors with overlapping benefit categories (e.g., wellness + fitness apps + gym reimbursements)
• Programs with per-transaction or per-claim fees that weren't scoped at launch
• Contracts where utilization is below 30% and renewal is approaching
• Region-specific benefits that aren't available to your full workforce

2. Reallocate dollars from underused benefit programs

Every benefits portfolio has dead weight. Programs that looked great in a benchmarking deck but never drove real engagement. Tuition assistance plans with complex eligibility rules that only a handful of employees ever use. Commuter subsidies that haven't been right-sized since hybrid work changed everything.

Low utilization isn't just a missed opportunity for employees. It's money sitting unused that your company is technically committed to spending. Running a proper benefits value assessment against your current portfolio gives you the data you need to show finance exactly where budget is being wasted and where it should go instead.

Redirecting even 20% of the spend from two or three underused programs can create enough runway to launch an LSA pilot. And because the total budget isn't changing, the internal approval process is usually much lighter than it would be for net-new spend.

Signs a program is a candidate for reallocation:

• Utilization consistently under 40% for two or more years
• Program was designed for in-office or pre-pandemic work patterns
• Employees rarely mention it in benefits surveys or engagement scores
• The vendor hasn't provided utilization reporting in the past 12 months

3. Pilot an LSA anchored to a specific use case

Asking for approval to launch a full LSA can feel like a big swing, especially when Finance is already scrutinizing discretionary spend. A narrower ask is often easier to get approved, faster to launch, and just as effective at generating the data you need to expand later.

Anchoring an LSA pilot to one specific use case, such as well-being, education & tuition support, or caregiving can give you a tighter scope, cleaner success metrics, and a much more digestible budget request. You're not asking for a platform overhaul. You're proposing a focused program with a defined population, a clear goal, and a measurable outcome.

Once that pilot shows results, expanding the LSA to cover more categories or a larger employee population becomes a straightforward conversation. You're no longer asking Finance to bet on a concept. You're asking them to scale something that's already working.

According to the Forma’s 2026 global lifestyle benefits benchmark report, dedicated use-case-specific accounts are seeing some of the highest year-over-year funding growth on record. Mental well-being accounts, for example, jumped 525% in median employer funding in a single year, with caregiving and meals and nutrition not far behind. These aren't niche experiments. They're programs that employers are actively scaling.

You can read more statistics like this in our 2026 benchmark report.

4. Use notional funding to right-size your budget forecast

One of the most common mistakes benefits leaders make when pitching an LSA to Finance is presenting the full allocation amount as the projected cost. If 1,000 employees each have a $600 annual wellness account, Finance sees a $600,000 line item. That's rarely what the program actually costs.

LSAs operate on notional funding, which means you allocate a budget per employee, but you only pay out what employees actually spend. Utilization rates vary by program type, but they're almost never 100%. 

Forma’s 2026 benchmark report shows that a $600 Fitness and Wellness allocation with a 71% utilization rate translates to roughly $426 in actual spend per employee. At 5,000 employees, that's a difference of nearly $900,000 between projected cost and realized cost.

Presenting a notional funding model instead of a face-value budget estimate can shift the conversation with finance entirely. Instead of defending a large headline number, you're showing exactly how the dollars flow and why your actual spend will be meaningfully lower than the allocation.

How to model notional funding for your pitch:

• Pull utilization benchmarks by account type from industry data (the Forma Benchmark Report is a strong source)
• Apply the formula: median funding per employee × utilization rate × headcount = forecasted program cost
• Present a range using low, median, and high utilization scenarios
• Show Finance that rollover or expiry provisions further reduce realized spend

5. Build a retention ROI case to get net-new dollars

Sometimes the right move isn't redistributing existing budget at all. It's giving Finance a compelling reason to allocate new dollars. And there's one argument that tends to cut through faster than anything else: the cost of employee turnover.

Replacing a single employee costs between 50% and 200% of their annual salary, according to Gallup, depending on role complexity and seniority. For a company losing 10% of a 500-person workforce annually, that number becomes significant fast. When benefits leaders can show that an LSA investment meaningfully moves retention metrics, the ROI math often justifies the spend many times over.

This approach works best when you can pair industry benchmarks with your own internal data. If exit surveys point to benefits dissatisfaction as a driver of attrition, or if engagement scores are lower in populations without flexible benefits access, you have the inputs to build a credible model. You're not asking Finance to fund a perk. You're asking them to reduce a cost they're already paying.

Linking your employee retention programs to a flexible benefits pitch is one of the most direct paths to getting a CFO or CRO to sign off on LSA spend. It reframes the question from "can we afford this?" to "can we afford not to?"

How to present the budget case to finance

Even the most well-constructed benefits argument can stall if it's pitched the wrong way. Finance teams aren't opposed to benefits investment. They're opposed to vague projections, unclear ROI, and programs that seem impossible to measure.

The most effective budget presentations lead with numbers Finance already cares about: cost per employee, utilization rates, and attrition impact. They show a clear before-and-after on program efficiency, not just a new line item request. And they tie the investment to outcomes that Finance is already tracking, like voluntary turnover, productivity, or headcount costs.

A few things that consistently make the difference in these conversations:

• Utilization projections grounded in benchmarks: Don't present full allocation as projected spend. Use notional funding models with real industry data to show what programs actually cost versus what they're budgeted at.
• Consolidation savings as an offset: If you're retiring vendor contracts or eliminating redundant tools, quantify those savings explicitly. A $50,000 reduction in vendor fees is real headroom for an LSA.
• A phased rollout plan: Asking for approval to pilot with one population or one use case is almost always easier than asking for full-scale launch. Lead with the pilot and frame expansion as a performance-triggered decision.

The flexible benefits ROI data is there to support your case. The job is to frame it in terms Finance finds credible rather than leading with employee satisfaction metrics that don't translate to a balance sheet.

Why Forma helps benefits leaders do more with existing budget

Forma is built for benefits leaders who need to deliver more value to employees without blowing up their budgets. The platform centralizes LSAs, HSAs, FSAs, HRAs, commuter benefits, and rewards and recognition into a single administrative experience, which means fewer vendor contracts, less admin overhead, and a dramatically simpler experience for both HR teams and employees.

What makes Forma especially suited to the strategies above is the flexibility of how programs are structured. You can launch a narrow, use-case-specific LSA and expand it over time. 

You can consolidate fragmented point solutions into one platform and immediately reduce the operational complexity that was costing your team hours every week. And because Forma operates on notional funding, you only pay for what employees actually spend, which makes the cost model straightforward to present to Finance.

Forma serves nearly one million employees across hundreds of companies worldwide, with a 78% monthly utilization rate that reflects what happens when benefits are personalized, accessible, and easy to use.

Ready to build a business case for flexible benefits at your organization? Schedule a demo today and see how Forma helps total rewards leaders get more out of every benefits dollar.

Frequently asked questions about funding personalized benefits and LSAs

What is notional funding and how does it apply to LSAs?

Notional funding means the employer allocates a set budget per employee, but only pays out what employees actually spend. If an employee has a $600 wellness account and uses $420 of it, the employer's realized cost is $420, not $600. This model makes LSAs significantly more cost-efficient than traditional benefits, where full disbursement is often assumed regardless of actual use.

How do I know which benefit programs to cut or reallocate?

Start with utilization data. Programs with sustained utilization below 40%, limited geographic reach, or eligibility rules that exclude large portions of your workforce are the strongest candidates for reallocation. Benefits that were designed for in-office or pre-pandemic work patterns are often the most underused in a hybrid environment and the easiest to redirect without significant pushback.

Can a company start with a small LSA and expand it later?

Yes, and this is often the most practical path forward. Launching a use-case-specific LSA, covering professional development or caregiving support, for example, lets you demonstrate results with a contained budget before scaling. Most platforms, including enterprise-grade ones, are built to support phased rollouts and can expand eligibility categories or funding amounts as internal buy-in grows.

What data should I bring to finance when pitching an LSA?

Bring utilization benchmarks, a notional funding model showing projected versus actual spend, consolidation savings from vendor reduction, and if available, internal attrition data tied to benefits dissatisfaction. Frame the LSA as a cost-optimization move as much as a benefits improvement. Finance teams respond more readily to efficiency arguments than to employee experience ones, so leading with numbers strengthens the pitch.

Do LSAs replace FSAs and HSAs, or can they run alongside them?

LSAs are separate from pre-tax accounts like FSAs and HSAs. They're employer-funded, not employee-funded through pre-tax deductions, and they don't have IRS contribution limits or strict eligibility rules. Many companies run both, using an LSA alongside pre-tax accounts to cover different categories of employee needs. The two program types are complementary rather than competing.

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