Caring for your health and well-being is so much more than just seeing your doctor. Maybe you work out in a gym regularly to keep your body healthy, or you like to take a yoga class to clear your mind. Usually, these types of expenses aren’t covered by your health insurance, and you have to pay for them yourself. This is where a lifestyle spending account (LSA) may be able to help.

Below, we’ll go over lifestyle spending accounts – how they work, the expenses they cover, how they differ from a flexible spending account (FSA) and much more.

You might be familiar with other employer-sponsored accounts, like flexible spending accounts (FSAs), health savings accounts (HSAs) and health reimbursement accounts (HRAs). In some ways, LSAs are similar, but what you can use them for is unique.

LSAs address your well-being beyond the doctor’s office or pharmacy by providing money you can use on things that help improve your physical, mental and financial health. In this way, they complement other accounts as well as your health insurance plan benefits.

LSAs are 100% funded by your employer. Generally, your employer determines the amount they’re going to contribute to your LSA. There’s no limit to what they can contribute, and the amount varies from employer to employer. But on average, most employers contribute from $500 to $2,000 every year.

Your employer also defines eligible expenses. This means they’ll determine what you can spend your LSA funds on and what you can’t. Typically, eligible expenses include categories not covered by your health insurance or other employer-sponsored spending accounts.

For example, if you see a therapist because you’ve been diagnosed with depression, you probably wouldn’t be able to use your LSA to cover your copay. But you may be able to use your LSA to reimburse the cost of a mindfulness app that helps with mental well-being. Other categories that an LSA covers may include health and well-being, nutrition, and fitness. But since LSAs are so flexible, there could be many more categories included.

One important note: Unlike other special reimbursement accounts, LSA money is considered taxable. You’ll pay taxes either when the funds in your LSA become available to you or when you actually use them – check with your employer to see how your LSA will be taxed. Even though the money is taxable, you’ll still pay less when you use your LSA than you would pay out of pocket.

Lifestyle spending accounts can help you have a better work-life balance, help improve your mental and physical health, and more. Other benefits of an LSA include:

1. LSAs are typically flexible – With an LSA, you can focus on the things that matter most to your personal health and well-being. For example, you can decide if you want to use your funds for a fitness class one month, and then take a cooking class the next month. Within your employer’s spending categories, how you use your funds is up to you.
2. LSAs are easy to understand and use – Lifestyle spending accounts are usually straightforward regarding what you can use funds for and how to get reimbursed. So it’s easy to use this employer benefit to its full advantage.
3. LSAs can balance out your insurance coverage – A lifestyle spending account complements your insurance, since not all expenses related to your health are typically covered by your health plan. That means LSAs can help reimburse more of your well-being expenses than insurance alone.

LSA-eligible expenses vary from employer to employer but usually include things like:

• Physical well-being – Gym memberships; fitness classes; exercise equipment; fitness trackers; race entry fees; and ski, golf and other activity passes
• Financial well-being – Financial planning services, financial seminars and identity theft services
• Emotional well-being – Nonmedical counseling; spiritual retreats; well-being classes such as art and cooking; annual local, state and national park passes; and sporting licenses

Other things that may be covered include home office equipment, grocery and meal delivery, charitable donations, and more. As traditional health insurance rarely covers these types of things, an LSA can help fill in the gaps.

Lifestyle spending account (LSA) vs. flexible spending account (FSA)

LSAs and FSAs generally have lots of differences. For example, FSAs are limited to specific medical expense categories, while LSAs tend to allow for more choice. Here’s an overview of key LSA and FSA differences:

How to submit claims with your LSA

Usually, reimbursement with your LSA account is pretty straightforward. You’ll likely be able to submit a claim online or through an app, depending on your employer or who’s administering your LSA.

You’ll fill out a form with details about your expenses, provide receipts for the products or services purchased, and then submit everything for reimbursement. HealthPartners members with LSAs can submit a claim online or use the HealthPartners mobile app for Android and iOS.

If your claim is approved, reimbursement funds are sent directly to your bank account if you’ve signed up for direct deposit, or by check. Some LSAs may charge fees for check reimbursements.