NOTE: Olympia Benefits will be launching a Wellness Spending Account in 2019. Please download our eBook below if you are interested in learning more about our product.
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 flexibility for employee spending.
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.
Varying Names, Same Plan
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.
What is a Wellness Spending Account?
A Wellness Spending Account (WSA) is used by employers to improve employee satisfaction within the company by encouraging employee wellness and healthy, active lifestyles.
The plan allows an employer to provide a taxable allowance to employees, which is used strictly for wellness related activities.
These plans typically provide spending allowances for things like gym memberships, classes, relationship counselling, or that new pair of running shoes.
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.
What is 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:
- Over-the-counter supplements
- Golf clubs
- Trail running shoes
- Bicycle helmet
- Personal Development
- Courses and textbooks
- Mental Health
- Hiking retreat
- Art therapy
How does a Wellness Spending Account work?
Olympia Benefits uses a digital platform for sign up, claims and reimbursement. This process allows approved claims to be reimbursed to employees within 2-3 business days.
Employers sign up for the plan online.
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 platform. 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.
- Each employee is designated a limit as to how much they can spend in their WSA
- The limits are separated through classifications (they are based on factors determined by the employer such as job title, years of experience, or anything applicable)
- The total of all employee limits is the maximum expense an employer can incur over a plan year
- 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 using their WSA allowance. The expensed amount is added onto the employee’s total taxable income.
- Employees do not have to spend all of their WSA allowance but cannot claim over their limit.
- Employees can only be reimbursed for eligible expenses that pertain to the WSA guidelines set by the WSA provider
Who decides on 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.
Advantages of using a Wellness Spending Account:
- No premiums
- Flexibility and choice for employees
- Cost control and customization for employers
- Restrict employee allowance spending to 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 to an HSA
What are the benefits of a Wellness Spending Account?
1. Encouraging Employee Wellness
2. Creating Productive and Engaged Employees
2. Flexibility for what Employees want to spend
3. Cost Certainty for Employer Budgeting
Who can use 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.
Where can I learn more about Olympia's WSA?
Note: The Olympia WSA is not yet available but will be soon. For more information, please download or eBook below
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.