How Employers Can Jazz Up Their Benefits with Specialty Accounts
Benefits brokers and company benefit managers are constantly looking for ways to inject more excitement into employee benefits packages. The more excited employees are about their benefits, the more effective those benefits are as retention and recruiting tools. Are you looking for a creative way to jazz up your company’s benefits? If so, consider the specialty account concept.
Specialty accounts are known by other names including lifestyle and wellness accounts. They are separate financial accounts into which employers contribute a predetermined amount on a regular schedule. The money is available to employees to spend on designated lifestyle and wellness products and services.
A rudimentary example would be a wellness account through which employees could pay for things like gym memberships, nutritional counseling, massages, etc. The beauty of the specialty account is that the employer gets to decide how much to contribute and on what the money can be spent.
How Accounts Are Set Up
The experts at BenefitMall explain that specialty accounts are fairly easy to set up and administer. Employers work with their benefits brokers or third-party administrators to establish separate financial accounts into which funds are contributed. Funds are disbursed to employees through a variety of means including cash reimbursements, prepaid debit cards, and vouchers for services.
To set up an account, the employer must decide:
- how much to contribute
- how often to contribute
- whether or not funds can be rolled over
- how the funds can be spent by employees
- whether or not employees are expected to contribute.
There is so much flexibility with specialty accounts that it is difficult to describe them in detail. The important thing to know is that the accounts can help employees pay for everything from pet healthcare services to the latest entertainment options.
Fund Expiration vs. Rollover
A key aspect of offering voluntary benefits through specialty accounts is giving employees something of value while also keeping costs under control. When cost is a primary concern, employers often choose to attach an expiration date to the funds in a given account.
For example, a company might contribute $100 per month to a wellness account through which things like gym memberships and massages can be paid for. Employees have only 30 days to use those funds, after which they will expire. The start of every month sees a new $100 contribution from the employer.
Attaching expiration dates saves money for the simple fact that not every employee will use their entire allowance every month. Employers make the funds available while knowing full well not all the funds will be utilized.
Meanwhile, the rollover model allows employees to roll unused funds into the next month. Employers spend more money, but they also give their employees more value as well.
More Companies Are Doing It
Survey data from 2022 suggests that specialty accounts are no longer on the fringe. They are mainstream. Clearly, more companies are getting on board as evidenced by the following numbers:
- 40% of large companies offer specialty accounts
- 30% of medium-size companies offer the accounts
- 35% of small businesses fund employee specialty accounts.
The tech sector and healthcare are the two industries in which specialty accounts seem to be particularly popular. Healthcare organizations contribute the most, at $267 per month on average. Your average tech company contributes $193 per month.
Any employer or benefits broker (like BenefitMall.com) looking to jazz up a benefits package should consider specialty accounts. They are easy to establish, incredibly flexible, and offer employees an opportunity to directly control the benefits they utilize and the extent to which they utilize them.