The LSA Advantage: How Benefit Brokers Can Win More Business with Lifestyle Spending Accounts

In today's competitive job market, attracting and retaining top talent requires going beyond just health insurance. Employees crave benefits that enhance their well-being and cater to their individual needs. This is where modern Lifestyle Spending Accounts (LSAs) like Maxwell come in, and forward-thinking benefit brokers can leverage them to win more business.

The Evolving Benefits Landscape

Traditionally, benefit packages focused on core medical coverage. But with rising healthcare costs and employee expectations shifting, a more holistic approach is needed. According to our friends at SHRM, “employees’ satisfaction with their benefits fell to 61 percent in 2023, down from 64 percent in 2022 and reaching its lowest point in the past decade.” Employees are looking for benefits that address financial wellness, work-life balance, and professional development.

LSAs: A Powerful Tool for Brokers

LSAs offer a unique opportunity to address these evolving needs. Here's how brokers can use LSAs to stand out and win more clients:

• Fill the Gaps in Traditional Benefits: While health insurance is crucial, it often leaves gaps in employee well-being. LSAs can be used to cover areas like gym memberships, mental health resources, or dependent care assistance. This allows brokers to showcase their ability to create comprehensive benefit packages.
• Year-Round Value Proposition: Unlike traditional benefits with enrollment periods, LSAs can be implemented or modified at any time. This empowers brokers to address client needs throughout the year, fostering stronger relationships and demonstrating ongoing value.
• Differentiation in a Crowded Market: The benefit broker landscape is competitive. By offering LSA expertise, brokers can differentiate themselves and showcase their understanding of the latest trends in employee benefits.
• Increased Client Satisfaction: A well-designed LSA program with diverse spending options leads to happier and healthier employees, and usually cost savings by consolidating underused programs/solutions. This translates to higher client retention rates for brokers.

Considerations when recommending an LSA

1. Client Fit: Not all LSAs are the same. Consider your client's industry, workforce demographics, and budget. For example, an LSA that requires a significant budget per employee and only offers access to products and gift cards on a marketplace might work well for a small tech startup. This approach will not work for a large healthcare system that is dealing with compressed margins, and a workforce with diverse needs.
2. Regulatory Compliance: LSAs come with specific IRS regulations. Brokers need to stay up-to-date on compliance requirements and ensure the platform they recommend meets all legal standards. Partnering with LSA providers who prioritize compliance minimizes risk for your clients.
3. Platform Functionality: Look for modern solutions. Many legacy FSA and HSA vendors offer LSAs but their platforms are outdated. Choose an LSA with a platform that's user-friendly for both employers and employees. Features like offering an intelligent debit card so employees don’t have to submit reimbursements, transparent reporting tools, mobile accessibility, and connection to traditional benefits, and other parts of the EVP enhance program adoption and satisfaction.
4. Integration with Existing Systems: Seamless integration with existing payroll saves time and reduces administrative burden for employers. Look for LSA providers that offer smooth integration capabilities.
5. Flexibility and Customization: The beauty of LSAs lies in their flexibility. The platform should allow employers to customize LSA budgets by talent segments, block spend categories, and provide employees with choices in-platform and out of it to cater to diverse employee preferences and maximize program impact.
6. Client Education and Support: Successful LSA implementation requires clear communication. Partner with providers who offer comprehensive education materials and ongoing support for both employers and employees. This ensures a smooth user experience and maximizes the benefits of the program.

The subscription fees and corresponding commission from an LSA launch may be minimal compared to health insurance. However, by leveraging LSAs, benefit brokers can become trusted advisors who not only secure basic benefits but also create a comprehensive well-being package for their clients. This strategic approach positions them to win more business and build stronger, long-term client relationships.

So, embrace the LSA advantage and watch your business thrive in the ever-evolving world of employee benefits! –

Maxwell’s global award winning platform offers the industry’s most flexible, impactful, and cost-effective LSA. If you are a benefits broker, book a time with us and let’s explore how LSAs can help you retain clients and win more business.