The 8 Best Lifestyle Spending Accounts (LSA) in 2023
Thoughtfully-crafted reviews and recommendations by experts about WEX, Forma, Benepass, and more
Fortunately for People Teams, we’re experiencing a golden age of the historically stagnant Lifestyle Spending Accounts (LSAs) industry. The pandemic finally made workforce wellbeing a priority for every organization which led to a massive amount of investment and innovation in the space. Today, employers have countless options and the biggest challenge is finding the right one.
It’s also more important than ever to select the right LSA. Due to widespread layoffs across industries, employers are set to receive significantly more qualified applicants for open roles than they have in years. The right compensation and benefits is key to hiring the best talent in the market.
We’ve used or investigated each LSA as an employee and employer, but before sharing reviews of each, you should consider which of the following factors matter most for your decision:
- Flexibility: How diverse are your workforce’s needs and how flexible does your LSA program need to be to drive utilization and satisfaction? The entire premise of Lifestyle Spending Accounts is that they provide for an unrestricted way for employers to invest in their workforce’s wellbeing. While they lack the tax advantages of HSAs, FSAs, and other government-incentivized contribution programs, LSAs have the potential for far more flexibility from merchant eligibility to purchase method.
- Best of breed vs. single vendor: Do you want to select the best possible LSA vendor for your workforce? Or do you prefer to just go with the one included with your healthcare or payroll provider? Consider whether you need to check a box on a town hall meeting or actually move the needle on employee engagement surveys.
- Coverage: Is your organization co-located around an HQ and in need of discounts at local wellness vendors? Or are you remote? Do you only need domestic coverage or is your workforce international?
- Ease-of-use: How important is it to have an LSA that is both easy to administer and easy for employees to understand and use? Do you have the bandwidth to go through a lengthy implementation and learning curve?
- Budget: Do you plan to invest in a generous allowance per employee or would you rather just give them access to discounts on wellness vendors?
WEX
WEX is the household name in the benefits space. While their LSA is more of an afterthought offering compared to their primary focus of pre-tax benefits offerings, they are still the most trusted vendor for larger organizations.
Pros
- Single vendor: WEX offers a single pre-funded debit card that can be used for all pre-tax and taxable lifestyle spending benefits.
- Integrated: WEX integrates with virtually every payroll provider to make it easy for organizations to pre-fund accounts and manage eligibility. They also offer a mobile app for employees to view and access their benefits.
Cons
- Hard to use: Benefits cards are notoriously fickle, declining when purchases are above an allowance threshold or because merchant eligibility can’t be immediately determined. They’re also tedious to distribute and replace when they inevitably get lost. Employees generally end up uploading receipts instead which is a hassle that lowers utilization.
- Limited coverage: Because LSAs are not WEX’s primary focus, they don’t offer much in the way of customization, discounts, or wellness recommendations. The eligibility guidelines are vague and arbitrary.
- Don’t expect employees to get particularly excited about an LSA administered through WEX. The overall web experience is lacking and basically feels like a glorified receipt management system. Employees tend to complain about a lack of visibility into the status of their reported purchases and delays for getting reimbursed.
- Upfront costs: The implementation time and costs will not be conducive for companies with fewer than 200 employees.
Forma
Forma is one of the venture-backed darlings in the industry, having raised $50m+ from leading firms. As such, they’ve established a renowned brand in Silicon Valley, appealing to the incredibly generous and lavish employee lifestyles among unicorns. They offer both a prepaid card and a marketplace, along with a receipt upload tool.
Pros
- Single vendor: Forma does a good job of checking virtually every box, with all the bells and whistles. They offer taxable benefits and integrations with pre-tax benefits, payroll providers, HRIS systems, and SSO. They offer a marketplace and card, with endless customization for each. They offer great reports and analytics along with 24/7 support and robust account management.
- Global coverage: Forma is impressively available in 60+ countries.
- Forma offers widely-liked mobile apps that make it easy for your employees to view and access their benefits.
Cons
- Expensive: Forma caters to the Silicon Valley elite and is very expensive with lengthy implementations and contractual commitments.
- Tedious: You would think that three ways to make purchases (marketplace, prepaid card, and receipts) would be ideal, but it leads to significant cognitive overload for employees. The vast majority of employees will just upload receipts if they utilize their allowance at all.
- Restrictive: Card frequently gets declined at point of purchase because Forma’s eligibility classifier is highly restrictive.
- Third-party: Purchases from the marketplace tend to take weeks to months to arrive. Employees can’t easily make returns or access warranties since they don’t have a first-party relationship with the merchants.
- Upfront costs: The implementation time and costs will not be conducive for companies with fewer than 200 employees.
Level
Like Forma, Level is a venture-backed hypergrowth industry leader. They focus more on pre-tax benefits (particularly dental) than Lifestyle Spending Accounts, but offer a compelling experience for combining benefits.
Pros
- Single vendor: Unlike WEX which combines HSAs/FSAs with LSAs, Level combines dental, vision, and transit benefits — which are much more common but less related — with LSAs. With many plan customization options and integrations, People Teams will find it convenient to run multiple benefits via Level.
- Global coverage: Level is available in 30 countries and six languages.
Cons
- Hard to use: Again, benefits cards are notoriously fickle, declining when purchases are above an allowance threshold or because merchant eligibility can’t be immediately determined. They’re also tedious to distribute and replace when they inevitably get lost. Employees generally end up uploading receipts instead which is a hassle that lowers utilization.
- Like Forma, Level can feel like it’s designed by a committee of investors to check boxes and win RFPs more than to actually solve a tangible problem with technology. Combining dental and commuter benefits with LSAs sounds nice but may be overwhelming for employees, especially as it will be disconnected from primary health insurance.
- Their mobile app is pretty buggy and employees complain that reimbursements are sometimes reversed, transferring money from employees back to Level or their employer.
JOON
JOON revolutionized the LSA industry with the only card-connected solution that delivers a superior experience for employees. They are singularly focused on wellness-oriented thought leadership content and LSAs that are easy to set up, administer, and use.
Pros
- Flexibility: JOON is the most flexible option on the market as you can customize programs with templated categories down to the individual merchant. Since employees use their own personal cards to make purchases anywhere, they never have to inconveniently login to a marketplace or have a prepaid card embarrassingly declined at the point of purchase.
- Ease of use: The card-connected “Set It and Benefit” experience avoids all of the drawbacks of prepaid cards and marketplaces. If utilization is your goal, JOON is the best solution because it’s fully automated for employees and admins. They also have a limited but high-quality list of discount partnerships.
- Affordable: Beginning at just $250/month, JOON is a great option for small and medium sized businesses. Plus, they are the only option in the market that offers monthly subscriptions and doesn’t try to lock you into a long-term contract.
Cons
- Coverage: JOON is focused on US-based employees and only recently added coverage for Canada and the EU. It does not work in South America or Asia.
- Single vendor: You will need to pick another solution if you want a single vendor for both pre-tax and taxable benefits. JOON only offers LSAs.
- While JOON has a sleek and modern web and mobile-friendly interface, they don’t offer a dedicated mobile app.
Optum
As part of one of the largest healthcare conglomerates in the country, it’s hard to state how much of an afterthought Optum’s LSA is within their suite of 1,000+ products and services. Their LSA offering is precisely as janky as you’d expect and yet it’s incredibly popular amongst large employers.
Pros
- Single vendor: The breadth of offerings from Optum and their parent company, UnitedHealth, are simply unmatched. You can’t beat the administrative convenience of combining health insurance, employee assistance programs, pre-tax benefits, and Lifestyle Spending Accounts.
- Optum offers premium account management services with a dedicated account manager.
- Optum offers a popular mobile app for accessing and managing all your benefits.
Cons
- From a data privacy perspective, many employees may have concerns about their wellness decisions (or lack thereof) being shared with their health insurance company.
- Selecting Optum for LSAs makes it clear to your workforce that you are simply “checking a box” rather than prioritizing flexibility or wellness. Employee utilization will be very low.
Fringe
Fringe takes a different approach to lifestyle benefits with a recognition, rewards points system, and marketplace with a wide range of discounts to wellness and lifestyle brands and products.
Pros
- Easy to administer: Besides for withholding taxes and pre-funding an account to draw funds down from, People Teams don’t need to do much to run an LSA with Fringe.
- Fun: The gamification aspect of Fringe will be considered tacky by more senior employees, but may be attractive for a younger workforce.
- Affordable: Because Fringe generates revenue from purchases within their marketplace, they are generally priced more affordably than other solutions. Further, employers can select the amount they want to invest in allowances and shift more of the cost to employees.
Cons
- Limited selection: Marketplaces are notoriously restrictive with a limited selection that may be frustrating for a diverse workforce. Fringe has some well-known brands in their marketplace, but mostly second-rate brands that employees wouldn’t normally pick.
- Taxability: Marketplaces make taxes into a significant headache, since employees may be awarded points they never actually use.
- There’s no receipt upload or reimbursement capability, so if an employee can’t find what they want in the marketplace, they can’t use Fringe to invest in their wellbeing. Further, if they attempt to buy something that costs more than their points, they will have to add a personal credit or debit card and pay to cover the difference.
Espresa
Espresa is a recognized leader in the employee rewards and retention space and has an impressive LSA offering. Leveraging a discount marketplace, Espresa’s LSA is lightweight and fully virtual.
Pros
- Single vendor: While they don’t offer pre-tax benefits, Espresa offers a suite of employee rewards programs beyond LSAs, from gamified challenges to employee resource group management. If you want to go all-in on a culture of recognition, you won’t find a broader set of features.
- Ease of use: Espresa offers a widely-respected mobile app but their web platform feels a bit dated.
- Affordable: Because Espresa takes a cut of each purchase made through its marketplace, their per employee fees are relatively low at $1-$2.
Cons
- Restrictive: Marketplaces are tedious to use and have limited choices for employees with diverse needs. Employees generally end up uploading receipts (which are manually reviewed, often abroad by contractors) instead which is a hassle that lowers utilization.
- You will need to pick another solution if you want a single vendor for both pre-tax and taxable benefits.
Benepass
Benepass focuses on being a more modern version of WEX, with a full suite of pre-tax benefits and LSA programs.
Pros
- Single vendor: Like WEX, Benepass lets you administer a single card for all pre-tax and taxable benefits. Unlike WEX though, wellness-oriented LSAs are not an afterthought for Benepass but a major strategic focus that includes features for rewards and recognition.
- Global coverage: Benepass’s card works internationally.
- Easy to administer: Benepass gives you a lot of program customizability from templated categories to employee eligibility. They also offer robust real-time dashboards to track utilization.
Cons
- Hard to use: We’re beating a dead horse at this point, but it’s important to re-state: benefits cards are notoriously fickle, declining when purchases are above an allowance threshold or because merchant eligibility can’t be immediately determined (Benepass even has a help center section dedicated to the topic). They’re also tedious to distribute and replace when they inevitably get lost. Employees generally end up uploading receipts instead which is a hassle that lowers utilization.
