You don’t need us to tell you that food prices are high. Some attribute the cause to energy costs and labor shortages, but other factors are also at play. For instance, the avian bird flu epidemic has raised chicken and egg prices. Extreme heat and reduced cattle herds have led to higher butter prices. Margarine also costs more due to the effects of the war in Ukraine on vegetable oil exports. And severe weather has consumers struggling to find certain fruits, nuts, and vegetables at any price.
High food prices can affect employees in ways that may not be obvious. Some will struggle to feed their families while keeping up with other bills, turning to eat-now pay-later services that increase debt. Others may de-prioritize medical care and postpone treatment. In 2022, 38% of Americans delayed medical treatment for themselves or a family member (Gallup), and a fourth of those cases involved severe health conditions.
How can employee benefit accounts help?
Traditional benefit accounts, such as FSAs and HSAs, can pay for specific nutritional products. A Letter of Medical Necessity is often required. Examples include some dehydration treatments, specialty baby formulas, and certain varieties of meal replacements.
However, “non-traditional” Lifestyle Spending Accounts (LSAs) can go further. Depending on the employer’s goals and choices, LSAs can help pay for groceries, meal services that deliver healthy ingredients, and cookbooks or cooking classes for those interested in affordable, nutritious eating.
Supporting employee food security can provide significant advantages to an employer. Limited access to (or funds to buy) fresh, healthy food often leads to eating cheap, convenient alternatives. Poor nutrition can promote chronic diseases like type 2 diabetes and obesity, leading to higher healthcare costs.
Additionally, financial pressures and related food insecurity can affect employee productivity. The Financial Post estimates that financial stress among employees costs their employers over $40 billion in lost productivity in 2022.
Hungry for LSAs?
Post-tax, employer-funded LSA accounts can be used, among other purposes, to help employees meet the nutrition needs of themselves and their families. These versatile accounts are easy to administer and can begin anytime during the year.
LSAs provide companies with an attractive and elegant solution to help employees lessen food insecurity, lower healthcare costs and increase productivity. Short of excluding Section 223 medical expenses in order to avoid triggering ERISA, employers can make nearly any legal product, service, or activity eligible for LSA reimbursement.
DataPath, Inc. has been a full-service TPA solutions provider for nearly four decades. Our cloud-based Summit platform is the industry’s first all-in-one cloud-based solution for CDH, HSA, Well-Being, COBRA, and Billing administration, plus, we offer comprehensive Operations BPO and award-winning Marketing Services for users of any administrative platform. Please enter your email (above right) to be notified when new blog articles are published.