A healthy worker equals a healthy business, that's a no-brainer.
But what can a company do to strengthen its workforce? Often times, companies decide to provide health and dental plans to its employees. The problem, however, is that these benefits deal with only immediate factors like tooth aches or back pain. It doesn't proactively address the root of the issue. Most of all, health and dental benefits are often a prerequisite for competing in today's hiring environment.
The solution is an employee wellness program, aimed to promote healthy lifestyles and choices.
Here are the 19 most frequently asked questions about an employee wellness program in Canada:
1. Is it worth it for a small business to add an employee wellness program?
It can be difficult to measure the impact of a wellness plan, but it is no doubt that employees weigh these benefits into their job search and retention.
Since small businesses can accumulate higher (relative to number of employees) health costs than normal businesses, it's important to be proactive when it comes to employee health.
A quality wellness program creates incentives for employees to proactively manage their health. For example, offering a spending allowance strictly for healthy choices. Anything that promotes healthy living can be deemed a wellness benefit, even actively encouraging employees to participate in a company sports leagues or simply offering a napping area. Some can be more effective than others, but what most employers don't realize is that implementation and usage are key to success. It is no surprise that small businesses can have difficulties with funding because wellness encompasses such a wide range of expenses. One option is to opt for a Wellness Spending Account, where employers can offer a variety of options to employees without breaking the bank.
At the end of the day, no company is too large or small to offer an employee wellness program. The return on investment can be justified if the plan is implemented well. It's all about workplace productivity and no plan is a greater boost than a wellness-focused one.
"According to the Wellness Councils of America, businesses save about $3 in health care expenses for every $1 spent on wellness programs. This equates to a return on investment of 300 percent. Businesses can reap an even greater ROI when they make special programs for employees at-risk of developing chronic problems, since these employees typically cost more to cover than the average employee." - Chron
2. What are some popular employee wellness programs and offerings?
You might like the idea of these offerings. In fact, you might already be offering some of these:
- On-site fitness center / gym
- Workplace Exercise Club / Activities - ex. Yoga class, spin class
- Smoking cessation programs - lifestyle coach, pharmaceutical assistance
- Transportation options - shared bikes, transit credits, monthly passes.
- Food Catering - a person's diet has a large impact on their general well being. There is no doubt that this benefit will be expensive, but also highly influential.
- Healthy Snack Tray - a lower commitment alternative to food catering
- Gym Memberships and Personal Training
- Wellness Spending Account - all inclusive plan which allows employees to choose their wellness spending
- Self Help Business Books
- Paid Day Off From Work After Every X Number of Weeks - ex. some public sector jobs offer every third Friday off
- Wellness Challenges - ex. Weight Loss
- Employee Assistance Programs - they are typically arranged through calls and provide advice and consulting on issues pertaining to relationships, stress, etc.
3. What is a Wellness Spending Account (WSA)?
A Wellness Spending Account (WSA) is a personalized wellness health program which provides employees with a taxable allowance to spend on wellness-related activities and products. The purpose of the plan is to promote employee wellness while limiting expenditures for the employer through a pre-determined allowance. This puts cost control in the hands of employers and allows for flexibility in employee spending.
4. How does a Wellness Spending Account work?
Every provider creates different but similar guidelines for the plan. The basic principles of a WSA is: a set allowance to each employee regulated by the employer, for spending on exclusively wellness related expenses.
At Olympia Benefits:
Sign up is available on our website. Claims and reimbursements will be done through our mobile app. This process allows approved claims to be reimbursed to employees within 2-3 business days.
5. How does a WSA differ from other wellness plans?
A WSA helps employees target and deal with individual problems by offering a wide range of eligible expenses to spend their money on. A key employee might be facing some stress in the form of back pain lately. They might be going to see a physiotherapist through the health and dental benefits, but a wellness package can make all the difference. For example, they could use the wellness spending account on swimming lessons and passes to strengthen their back and improve overall health. This bundled with the physio sessions can create amazing results.
Although many companies already offer wellness-related benefits in one form or another, a WSA allows the employer to bundle these benefits into one plan for smooth implementation and ease of access. Employees will be able to get reimbursed for a wide range of wellness items, such as gym memberships, professional development courses, and more. Claims are straightforward, and reimbursements are considered a taxable income (T4).
In today's competitive market, a WSA helps separate your business in enticing the top talent.
6. What are some other names for a WSA?
A Wellness Spending Account (WSA) is also known as a Health and Wellness Plan (HWP) or Lifestyle Spending Account (LSA). For the purposes of this article, we will refer to these plans as a Wellness Spending Account (WSA). These plans/accounts are types of Employee Wellness Programs meant to boost employee wellness.
7. Who is suitable for a Wellness Spending Account?
Olympia's WSA works for a business of any size (1 to 100+ arm's length employees).
At the moment, this WSA offering is only available to existing Olympia HSA Group clients.
HSA Group is Olympia's Health Spending Account plan for a small business with arm's length employees. It is a tax-free allowance for employees to spend on the medical expenses of their choice.
8. What is the difference between an Health Spending Account (HSA) and a Wellness Spending Account (WSA)?
In short, a HSA is a tax free benefit for employees to spend on health and dental expenses. Whereas, a WSA is a taxable benefit to be spent on wellness related expenses. Due to the tax free nature of HSA, eligible expenses are regulated by CRA. A WSA, on the other hand, is chosen by the employer or provider and much more lenient in what is eligible.
9. What are the primary benefits of a WSA?
A Wellness Spending Account (WSA) is used by employers to improve employee satisfaction within the company by encouraging employee wellness and healthy, active lifestyles.
- Encouraging Employee Wellness
- Creating Productive and Engaged Employees
- Flexibility for what Employees want to spend
- Cost Certainty for Employer Budgeting
10. Does the WSA allowance add to an employee's taxable income?
Yes, it is important to note WSA allowances are taxable for the employee, meaning WSA funds used up by an employee contribute to their yearly taxable income (T4). Unused dollars in a WSA plan do not add to an employees taxable income.
11. How are the WSA claims funded?
Wellness Spending Accounts are typically funded by the employer and reimbursed to claims made by the employee. Usually, employers will top off the funding account so that employees can receive immediate reimbursement upon a claim being processed.
The Olympia WSA is only available to existing Health Spending Account Group users. As such, the funding for employee alllowance's will be taken from the same funding account as the Health Spending Account. Claims and reimbursements are done through our own mobile app. We advise employers to pay into their funding account at the start of each month. Employers can determine a reasonable amount to pay by looking at total employee allowances (total liabilities).
12. Are dependents covered under a Wellness plan?
A wellness plan is meant to directly benefit the health and productivity of the employee. Therefore, dependents are not eligible in a Wellness Spending Account.
13. What is the plan year?
Because a Wellness Spending Account adds to your taxable income, the plan operates on the calendar year (January - December). This means that allowances are pro-rated. For example, adding a new employee into the plan in June 2019 would half their total allowance in the plan year of 2019. In January 2020, they would receive a new full allowance to be spent anytime between January 2020 and December 2020.
14. What expenses are eligible under a Wellness Spending Account (WSA)?
Each WSA provider typically creates their own list of eligible WSA expenses. Alternatively, the provider can work with plan sponsors (employers) to determine eligible expenses within each unique plan.
Here are some common WSA categories and their respective eligible expenses:
- Nutrition
- Dietitian
- Over-the-counter supplements
- Fitness
- Golf clubs
- Trail running shoes
- Frisbee
- Bicycle helmet
- Skis
- Personal Development
- Mental Health
- Hiking retreat
- Hypnosis
- Art therapy
15. Who determines the eligible expenses in a Wellness Spending Account?
A Wellness Spending Account is a taxable benefit. Therefore, eligible items are determined by the WSA provider.
Employers can also select the categories of eligible expenses that meet their specific needs and corporate culture.
16. How do I manage the WSA?
- Each employee is designated a limit as to how much they can spend in their WSA
- This limit is set by the employer
- The limits are separated through classifications (they are based on factors determined by the employer such as job title, years of experience, or anything you so choose)
- The total of all employee limits is the maximum expense an employer can incur over a plan year
- Typically, the employer allocates the previously agreed amount into the WSA in equal monthly installments
- Employees pay for the expense personally and then make a claim with the WSA provider
- If the expense is eligible, then the employee will be reimbursed through their WSA allowance. The expensed amount is added onto the employee’s total taxable income.
- Employees cannot claim over their limit
- However, it does not mean they have to spend all of their WSA allowance
- Employees can only be reimbursed for eligible expenses that pertain to the WSA guidelines set by the WSA provider
17. What are the steps involved with signing up and setup?
Employers sign up for the plan online through My Olympia, as the plan is only available to existing HSA Group users.
Employers set allowances for employees based on a factor of their choice such as job title, years of experience, etc. Employers also determine a monthly amount to contribute to the funding account within the plan. This ensures employees are reimbursed in a timely manner if they do claim.
Employees pay for their wellness related expenses personally and then make a claim on our digital app. Save the receipt in case of an audit. Once the claim is approved, employees will be reimbursed in their personal bank account within 2-3 business days. The reimbursement is taken from the employer funding account within the WSA. Monthly payments are established by the employer.
18. Why choose Olympia Benefits as your Wellness Spending Account provider?
- No premiums
- Flexibility and choice for employees
- Cost control and customization for employers
- Set employee allowance spending to only wellness related expenses
- Attract and retain top talent
- Promote healthy lifestyles among your employees
- Additional incentive for employees to take care of their health
- Differentiate your benefits package from competitors
- Great add-on / pairing to an HSA
- One system, smooth implementation
19. Where can I learn more about the Olympia WSA?
Olympia's WSA is a fully digital plan with claims and reimbursement done through a fast and simple digital process. Employees can log into their personal account and make claims, while seeing reimbursement or audit status.
To learn more about Olympia's Wellness Spending Account, download our FREE Guide:
Listen to our Podcast Episode about Employee Wellness Programs:
Related Reading:
Do Employee Wellness Programs Actually Work?
Top 24 FAQ for Employee Benefits Package for small business
Top 53 FAQ about Olympia Health Spending Accounts
Health Spending Account Definitions
HSA vs insurance [2 ways to pay for medical expenses]