Conclusion: Protect Your Team, Grow Your Business
Understanding Health Spending Accounts in Alberta
Employee expectations are changing. As workplaces evolve and the focus on mental and physical well-being grows, more Alberta employers are expanding beyond traditional health and dental benefits. One of the most flexible and modern ways to do this is through a Lifestyle or Wellness Account.
At Summit Benefits, we help organizations design customized employee benefit solutions that go beyond basic coverage. Lifestyle or Wellness Accounts are one of the fastest-growing tools in that toolkit, giving employers an opportunity to promote balance, engagement, and retention in the workplace.
What Is a Lifestyle or Wellness Account?
A Lifestyle or Wellness Account (LSA) is an employer-funded, taxable benefit that allows employees to use allocated credits for a wide variety of wellness-related expenses. Unlike a Health Spending Account (HSA), which is limited to eligible medical expenses as defined by the Canada Revenue Agency (CRA), an LSA covers a much broader range of personal well-being costs.
The purpose of an LSA is to encourage employees to live healthier, more balanced lives. The employer provides an annual allowance—say $500, $1,000, or more—and employees decide how to use it. These funds can support everything from gym memberships to mental health programs, nutrition services, and even personal development activities. With Wellness Accounts, the employer chooses what is/ isn’t eligible to tailor the plan to fit their needs.
Because the expenses are not tied to CRA medical eligibility, LSAs are considered taxable benefits to the employee. This means the amount reimbursed is added to the employee’s taxable income (annually, quarterly, or monthly), while the employer can still deduct the expense as a business cost.
Examples of Eligible Wellness Expenses
Lifestyle or Wellness Accounts can be customized to reflect your company culture and employee priorities. Common eligible expenses include:
- Gym or fitness club memberships
- Yoga, Pilates, or fitness classes
- Sports equipment or athletic wear
- Home fitness gear or wearable fitness trackers
- Mental health or life coaching programs
- Nutritional counselling or weight management programs
- Smoking cessation support
- Stress management or mindfulness programs
- Financial planning or life skills workshops
- Hobby and recreation courses such as art, music, or dance
- Personal development or continuing education courses
- Family wellness programs or daycare support
Employers can choose to make their program broad and inclusive or set specific categories that align with company values. For example, a business might focus on physical and mental health only, while another may include personal growth and work-life balance activities.
Benefits of Offering a Lifestyle or Wellness Account
1. Promotes Employee Well-Being
An LSA empowers employees to take ownership of their health and happiness. It acknowledges that wellness means something different to everyone—what helps one person manage stress or stay active may not work for another. This personalized approach helps improve overall morale and engagement.
2. Attracts and Retains Talent
Employees are looking for workplaces that support their lifestyle and values. Offering an LSA demonstrates a commitment to holistic well-being and can make your organization more attractive to potential hires. It also helps retain existing staff by showing that the company invests in their personal growth and balance.
3. Encourages a Positive Workplace Culture
When employees feel supported in pursuing healthy lifestyles, it contributes to higher energy levels, improved focus, and lower absenteeism. LSAs can complement other wellness initiatives, such as mental health days or team fitness challenges, fostering a culture of wellness and inclusivity.
4. Flexible and Easy to Administer
Like Health Spending Accounts, LSAs are simple to manage. Employers set an annual credit amount, employees submit receipts for approved expenses, and reimbursements are made through payroll or a benefits administrator. The company maintains full control over budget limits and eligible categories.
5. Tax-Deductible for Employers
Although taxable to employees, Lifestyle or Wellness Account contributions are typically deductible as a business expense, making them financially efficient to implement.
How Lifestyle Accounts Differ from Health Spending Accounts
Both accounts work in a similar fashion but can be used by employers to help create comprehensive care for their employees.
HSA accounts must follow the CRA guidelines regarding coverage and tend to focus more on the medical services like a traditional plan. Prescription Drugs, medical supplies, and medical practitioners are all commonly put through Health Spending Accounts.
LSAs are broader in scope and allow for proactive care for employees. Since they are not regulated like HSAs the definition is broader with emphasis on supports and wellbeing for employees creating a comprehensive care plan.
In short, an HSA is designed to fill the gaps in traditional health and dental plans, while an LSA enhances overall quality of life. Many Alberta employers choose to offer both, providing a comprehensive approach that supports physical health through HSAs and mental or lifestyle balance through LSAs.
Designing the Right Plan for Your Business
A successful Lifestyle or Wellness Account should align with your organization’s goals and culture. Here are some best practices:
Define the purpose
Decide whether the account will focus on physical wellness, mental health, family support, or general lifestyle enrichment.
Set contribution limits
Determine how much to allocate per employee per year, ensuring it fits within your benefits budget.
Decide on eligible expenses
Create clear categories and guidelines so employees understand what they can claim.
Communicate effectively
Educate your employees about how to use the account, submit claims, and understand the tax implications.
Review annually
Evaluate participation rates and employee feedback to refine your program over time.
Summit Benefits helps Alberta employers design both Health Spending and Lifestyle Accounts that are practical, compliant, and aligned with company values.
Why Partner with Summit Benefits
At Summit Benefits, we specialize in crafting flexible benefit solutions that help businesses of all sizes build healthier, happier teams. We work with you to:
- Customize plan design and eligibility criteria
- Determine the right balance between HSAs and LSAs
- Set up efficient administration and reimbursement processes
- Ensure compliance and clarity for both employer and employee
- Provide education and communication tools to increase engagement
We understand that no two workplaces are the same, which is why every plan we create is personalized to fit your organization’s needs and budget.
Final Thoughts
A Lifestyle or Wellness Account is more than just a perk—it’s a statement that your company values the overall well-being of its people. When combined with a Health Spending Account, it creates a powerful benefits package that supports both physical and mental health.
If you’re ready to modernize your employee benefits and strengthen your workplace culture, Summit Benefits can help. Contact our team to learn how we can design a Lifestyle or Wellness Account tailored to your business and your team.