As the workforce changes and becomes more diverse, flexible options that offer employees more choice are growing in popularity. Personal Spending Accounts (sometimes known as Wellness Spending Accounts) provide additional health and wellbeing options to employees beyond what is typically covered in a traditional benefits plan.
What is a Personal Spending Account?
A Personal Spending Account (PSA) is designed by the employer, who allocates a set amount of money to each employee for use on eligible items. The list of eligible items for a PSA can be almost limitless, as employers are the ones who dictate what will and what will not be covered. This allows them to tailor the plans to their employee’s specific needs.
The Weird and Wonderful Uses of a Personal Spending Account
A PSA can cover a whole range of things, but we want to highlight some of the lesser known uses that we’re calling the “weird and wonderfuls.”
Expenses related to the care of a child can be claimed under a PSA, with such examples as daycare services or summer camps.
Likewise, expenses related to the care of an elder (dependent on the employee for care) can be claimed under a PSA, including companionship services or certain activities.
#3. Green Initiatives
A PSA can help keep a plan member and the environment healthy! Alternative transportation (transit passes, bicycles, etc), energy-efficient appliances or solar and wind energy products are all eligible under a PSA.
#4. Fitness Expenses
If your employees are big fitness gurus, you can cover their membership fees, equipment costs or personal training and consultations.
#5. Professional Services
At some time or another, everyone has a use for professional services. These could include financial investment advice, tax return preparation, legal expenses such as wills or home purchases and sales.
#6. Education or Personal/Professional Development
PSAs can cover online courses, workshops on your favourite hobby, or even the learning of a new language! Employers can also choose to cover and encourage employees’ professional development (a win-win for employers and employees both).
PSA’s are meant to give you additional options to keep you healthy, and part of that is safety! Home alarm systems like smoke alarms, carbon monoxide detectors, or even security systems can all be considered eligible, as well as first aid products or even life jackets for your camping trip!
This list is not complete and is meant only to reflect some of the lesser known uses of a PSA. It’s important to remember that the employer ultimately decides what is and isn’t covered when they set up the plan, and plan members looking to make claims should confirm their individual coverage.
This sounds a lot like a Health Care Spending Account…
A Health Care Spending Account (HCSA) works similarly to a Personal Spending Account in the fact that they’re made up of a set amount of money determined by the employer. However, there are significant differences in how they’re regulated and what is covered under each.