What is the North Coast Administrators Lifestyle Spending Account?
Not every employee has the same lifestyle needs. Lifestyle Spending Accounts give employers the flexibility to allow employees to spend benefit dollars on the things that matter most to them. From physical and mental health needs, to professional and educational development, to travel and entertainment, employers can determine how their employees are able to spend their lifestyle spending account dollars.
How is a lifestyle spending account different from other health benefit accounts?
Similar to health savings accounts (HSAs) and flexible spending accounts (FSAs), lifestyle spending accounts often have funds that are meant to be used for specific types of purchases. However, there are differences.
No tax benefit. Unlike HSAs and FSAs, lifestyle spending accounts do not offer any tax advantages. You fund the accounts, and the funds are considered taxable income for your employees.
Employers control how funds are spent. With HSAs and FSAs, there are restrictions on the use of funds, but these are typically set by the IRS. With lifestyle spending accounts, employers create the program parameters. Employers can restrict the use of funds to certain types of purchases or leave it wide open.
Key benefits of lifestyle spending accounts
Funding flexibility. Employers can fund participant accounts to predefined amounts per employee, and set limits for specific types of services. Should employees’ needs change, you can easily add more dollars to the account.
Easy to manage. Lifestyle spending accounts decrease the administrative burden placed on HR teams to manually administer perk programs and you can rest easy knowing your program will always be IRS compliant.
Preservation of unused funds. Unlike cash or gift cards, companies only pay for what employees use. Any account funds not spent will be returned to the employer at the end of the plan year.