Employee well-being is essential for organizational success. Leading employers are enhancing retention, attracting talent, and building inclusive cultures with comprehensive benefits packages—including popular fitness reimbursement benefits.
A fitness reimbursement benefit, formerly called gym reimbursements, can include a variety of perks focused on enhancing physical well-being. This article outlines typical eligible fitness reimbursement expenses and explores broader, inclusive options, covers tax implications, and provides tips for designing an effective program.
Here’s what we’ll cover:
- Fitness reimbursement program
- Fitness lifestyle benefit guidelines
- Implementing a fitness reimbursement benefit
Fitness reimbursement program
A fitness reimbursement program is ideal for future-focused organizations that value inclusive, sustainable employee wellness. While allocating funds for physical fitness might seem optional, activities like exercise have proven benefits such as reducing anxiety and depression while boosting confidence and fostering positive connections.
Well-being extends far beyond traditional health-related benefits. A comprehensive approach that integrates emotional, physical, financial, and social health is essential for employee engagement and productivity. As 75% of employers now offer well-being wallets that include a wide range of benefits, there’s a growing shift toward holistic wellness solutions that go beyond just fitness.
Since preferences vary—some employees may favor weightlifting while others enjoy dance or meditation—it’s crucial to offer diverse eligible activities, ensuring all employees can find options that fit their abilities and interests. Employers must consider all angles of a fitness reimbursement benefit and include eligible expenses for every employee to enjoy. An inclusive program can drive engagement and overall wellness.
Eligibility criteria
Traditionally, employers only offered gym reimbursements—as it was simpler for their benefits or finance team to administer internally. Every employee has a different fitness goal and to make this benefit more personal and inclusive, it is vital to consider a more comprehensive fitness reimbursement program. LSA programs champion this inclusivity and simplicity—offering less administrative work for employers and quick, mobile claims submissions for employees.
Determining eligible expenses for fitness reimbursement programs means considering both typical industry standards and the unique needs of your workforce. Commonly covered activities include running shoes, yoga passes, or on-demand fitness memberships like Les Mills.
While it is ultimately up to employers to determine eligibility criteria, employers should account for geographic and physical diversity. For instance, a team in one region may prefer tai chi over pilates, so including varied options can help all employees feel valued and comfortable. Ultimately, setting eligibility involves balancing industry norms with flexibility to support employees’ diverse fitness interests and needs.
Eligible expenses
To maximize participation in fitness reimbursement programs, a wide variety of eligible expenses can make the program inclusive and engaging for all employees. When your talent sees benefits tailored to their lifestyles, they’re more likely to engage. Common eligible expenses beyond just gym reimbursement include:
- Gym memberships and fitness classes (e.g., pilates, dance)
- Personal training (in-person or virtual)
- Fitness equipment (like weights, mats)
- Wearable fitness devices (like trackers)
- Outdoor and seasonal sports (ski passes, hiking fees at parks)
- Recreational sports leagues
- Apparel and fitness apps
To keep the focus on fitness and compliance, avoid covering medical expenses or health-related costs that overlap with traditional healthcare benefits. By thoroughly planning and researching their necessities, organizations can plan an effective and fruitful fitness lifestyle benefit program.
Fitness lifestyle benefit guidelines
Fitness benefits don’t have to be strictly physical—consider options inclusive of all abilities. For example, steps challenges may not be accessible for employees in wheelchairs or with chronic conditions. Offering diverse choices, like yoga, swimming, apparel, or a recumbent arm bike, allows everyone to find activities that fit their needs and preferences. When employers meet employees’ needs, it leads to a more supportive, accessible, and holistic wellness program.
Expanding the focus: a holistic approach to well-being
Well-being extends far beyond traditional health-related benefits. A comprehensive approach that integrates emotional, physical, financial, and social health is essential for employee engagement and productivity. As 75% of employers now offer well-being wallets that include a wide range of benefits, there’s a growing shift toward holistic wellness solutions that go beyond just fitness. While fitness expenses are still common, this broader perspective helps address the full spectrum of employee needs.
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Implementing a fitness reimbursement benefit
The best way to implement lifestyle and fitness allowances is by understanding your workforce’s unique needs. Use surveys, focus groups, or industry data to identify the most valued expenses. For example, a company with a hybrid workforce may prioritize home-office equipment or mental health support over traditional fitness reimbursements. In contrast, a workforce with young families may prioritize childcare or fitness-related reimbursements. Tailor and design your program to provide a variety of options that meet the diverse preferences of your people, ensuring maximum engagement and inclusion.
Tax liability and consideration
Employees are responsible for paying income taxes on any money spent from their LSA funds, as it’s considered taxable income and appears on payroll stubs with applicable withholdings. However, employers don’t incur any tax burden for these reimbursements, making lifestyle benefits a straightforward way to support employee wellness without increasing employer tax obligations.
Start Claiming Your Fitness Reimbursement with LSA Plus™
With no tax concerns, exceptional customization, and simple implementation processes, claiming fitness reimbursement benefits has never been simpler. Take the initiative to get your employees moving and more aware of their physical health, especially for remote and hybrid teams. By consolidating benefits into a single, streamlined platform with LSA Plus™, your people can focus on their wellness without navigating multiple, complex systems.
