Espresa Lifestyle Spending Accounts, LSA+ Featuring Dan Weinstein

Additional reference materials

• Discover Espresa Global Lifestyle Spending Accounts
• Webinar: Espresa Leadership Forum for Global Employee Reimbursements (LSAs)
• Blog: The Most Popular Employee Benefits – Beyond the Expected
• Espresa’s LSA and Remimbursements Platform

Erika Lawney, Shortlister // Good afternoon everyone and welcome to today’s Meet a Vendor webinar hosted by Espresa. I’m Erika Lawney shortlist Vice President of Vendor Relations and I’m so glad you could join us. Before I turn things over to our presenter, I’d like to review a few quick housekeeping items, especially for those who may be first time attendees. Our Meet a Vendor webinars take place on Tuesdays and Wednesdays at 1:00 PM Central Time. We use a condensed format of 30 minutes that includes a 25 minute presentation followed by five minutes of questions. To submit a question, use the go-to webinar widget on the right hand side of your screen. There’s a little tab for questions where you can type those in and send them over to me. We’ll get to as many as we can during the time that remains after the presentation. So with that, I’m going to hand things over to today’s presenter. We have Dan Weinstein, Regional Vice President of Strategic Alliances with Espresa.

Dan Weinstein, Espresa // Thank you so much, Erika, appreciate that and welcome to this presentation on Espresa. As Erika mentioned, I’m Dan Weinstein, I’m coming from sunny Colorado and just a little about myself I’ve got over 20 years of experience in the HR space I’ve actually been on the consulting brokerage side of things for the past 12 years, most recently at Aon and and Mercer and really just have a passion for all things HR and community. Been very involved with DisruptHR and DisruptHR Denver. Some of you may be familiar with that in your local cities as well. I will just point out here at Espresa, we all like to have a little bit of fun so if you happen to find any Easter eggs planted throughout the presentation, maybe make a note in the chat along with any questions you might have and send them on over. So with that we’ll jump right on in.

Espresa is a culture benefits platform built with flexibility and choice in mind. And what that means is we consider Lifestyle Spending Accounts, or LSAs, really as the chassis to provide a flexible benefit that can be added to along with wellbeing and challenges, rewards and recognition and employee resource groups or ERGs and communities. What this means is we can help employers solve for a wide variety of employee engagement needs and create a truly inclusive benefit offering with the ability to deliver in a flexible way globally. In short, Express’s LSA Plus enables employees to live life free.

So why are we here, right? We’ve seen about two thirds of employers are considering adding an LSA and if you’re out there talking with your clients or if you are an employer yourself, this means that you’re likely having conversations and looking at these and continuing to investigate how they might fit in here. Lifestyle Spending Accounts or LSAs are an increasingly popular benefit that employers are leveraging to impact attraction and retention, employee experience and ultimately organizational culture. LSAs offer a variety of benefits. Some of the most notable are the incredible flexibility that in which they can be offered. You’re going to hear flexibility or flexible and choice come up a lot today here. Their ability to offer customized and personalized benefits to every employee that allows them to choose what fits for their personal needs and that drives a really high level of participation.

And then last but not least, for those employers and groups that have a global population, this can be deployed globally in an equitable and inclusive fashion.

Who is Espresa? Espresa is a seven year old company, we’ve been around since 2015. We have over a hundred clients with over a million users globally. I’d like to point this out, we are a mobile first, global first platform. We’ve got 20 by five customer support and our span of clients and you see some of the common names up on the board here span from clients with a hundred employees all the way up to 200,000 employees in over 40 countries globally.

What makes Espresa unique? The main piece is how we approach the market and there are four key goals in mind. First and foremost, we are purpose built, meaning that we built LSAs from the ground up and not as an add-on or an afterthought. We created our approach with ultimate flexibility. LSAs by their nature are flexible reimbursement accounts but they could only be as flexible as your partner and that’s why we make sure every reimbursement is verified by human adjudicators. We also built the system to be simple for the employee to use as well as the HR team to administer, roll out and report on.

Lastly, we built our platform to be global and mobile first to address being inclusive to an employer’s entire population, meeting their employees when and where they are. No longer do you need to just roll out a program in the US only and look for a different solution internationally, this is one that could fit all needs. Using this foundation to transform the market we’re the first to integrate and focus on LSA Plus with the ability to seamlessly integrate across wellbeing and challenges, rewards and recognition or ERGs and communities. With every company trying to accomplish something unique, we’re flexible enough to meet them each where they are and grow with where they want to be. We’re having employers come to us asking how we can help them support their initiatives around things like sustainability, charitable giving and communities often using challenges to gamify building the culture around what’s important for each employer. And we’re going to look a little bit later at a couple of scenarios that will really bring this to life for you.

At their core, LSAs are a flexible wallet of money that an employer can give employees to spend on a wide range of benefits. LSAs can handle traditional reimbursement options like gym and tuition reimbursement, but offer the ability to go beyond traditional options to include a wide variety of benefits and expenses that employees value. You can see some of the more common areas offered to employees on the screen here, but with a flexible LSA you can provide even more choice such as meal delivery and travel that haven’t often been paired with benefits. You see here childcare, which is a common reimbursement, but many employers are looking to expand that category and be more inclusive thinking of it more of a care wallet. So employees who may not have kids or who are caring for aging parents can use it for that reason. They’ve also expanded it to include pets, so those with fur babies who are returning to the office part-time can use it for dog walking or other pet care services. We’re also seeing an expansion in the area of charitable contributions and really bringing it full circle to align with an organization’s core values.

A couple emerging trends point to being purposeful just as I mentioned with how these wallets can be used, including setting up an emergency fund wallet with specific limitations focused on those employees who are least able to absorb an unexpected expense such as say a flat tire or childcare complications that might otherwise keep them from being able to work. The other one I hinted at earlier was a sustainability wallet that can focus on an employer’s ERG commitments such as renewable energy at home, reducing carbon footprints, composting, public or group transportation as examples. Included in this, employers have already had kind of core reimbursements I mentioned before.

So a key piece that employers are looking to do is streamline the administration of common in-house manage reimbursement. Common ones you’ll see all the time are tuition reimbursement, adoption assistance is another one and all these can be combined, they can have their separate wallet, but really streamlining the administration and choice for both the employer and the employee to access easily. So this slide here really brings to life the inherent choice that LSAs provide to the five generations of employees that you and your clients have in the workforce today. We know employees are demanding more inclusive, personalized benefits that support them in their lives beyond work and here we’ll see it in action.

For example here we’ve got Idris who’s newer in career, he works in the office or as his employer likes to call it, works on campus. Things that are of mind for Idris are student debt and career growth, which is not surprising based on where he is in his career. Some examples of how he uses his LSA is through his student loan repayment. He’s also looking for additional certifications. So ongoing education is another area he likes to use his LSA. And finally he goes to the gym and is really focused on fitness and wellbeing.

Meanwhile, we have Amanda who’s mid-career. She works remote, top of mind for her family support and financial security. So it’s not surprising that meal delivery services are something that she values to really help with her get the most out of her time. Finding a math tutor for one of her sons is another area and finally her and her husband are looking towards retirement and they’ve hired a financial advisor so she’s able to use some of her LSA funds there.

And then lastly, there’s Javier. He’s later career, he’s an empty nester. He works hybrid top of mind for him are health, community and travel. So not surprisingly he’s really gotten into the Peloton so he uses his LSA funds for a Peloton membership. He likes to use some for charitable donation what’s important to him, and then he’s a couple dogs and when he goes out of town he needs a place for them so he pays for pet hotels through that.

Again, three very different individuals, employees with three very different areas that are important to them in their personal life outside of work and that single LSA can help drive value for each of them and essentially drive this connection back to their employer.

I mentioned earlier Espresa was built global first and as a matter of fact, almost 80% of our clients have employees internationally that currently reside in over 60 countries. We can offer LSA plus programs in all countries and deliver our app and website in over 130 languages as well as take claims in native languages and delivery reimbursement in all currencies. In addition to this, we offer a tool called Purchasing Power Parity to make sure the LSA offering being offered is equitable across the world. That might mean for example, that if in the US an employer is offering a $1000 a year LSA wallet, that might be the equivalent purchasing power of about $290 in India or about $1,300 would be needed to get that same purchasing power in Switzerland for example. Again, we’re looking to make sure it’s equitable across the globe.

We’re also mobile first with the employee experience being first and foremost on our mind. This system is an audience smart platform, meaning it can show different information and offer different programs based on who and where users are logging in. This is important because you may be looking at trying to talk about open enrollment coming up in the US where that’s not applicable in other countries where maybe you’re doing a specific challenge around volunteering in Spain. So this can set itself up so that they know who’s logging in and see just what’s important to them. We can pull in information for wellbeing challenges, from smart watches and apps to gamify the system and also engage employees where they are and even more important expand their engagement across the full LSA Plus offering.

This idea of a single culture benefits platform is supported when we look at the increase in participation in non-monetary peer to peer recognition awards at some of our clients that are given when an LSA is also offered and employees are easily accessing their benefits, then they’re taking that time to recognize a peer and further build that employee engagement cycle that increases employee satisfaction and retention. This is just one example of what we mean by being more than a reimbursement platform, but truly LSA Plus. We talk about choice and flexibility a lot and that is for employees and employers.

There are three main forms of engaging within LSA and we can do all of them. By far the most common approach is a reimbursement process. In this scenario, we set up the guidelines for each wallet specific to the client and adjudicated by humans. Then employees have the flexibility to purchase approved items however they want and in conjunction with their normal purchases. The most common way we see this is someone making an Amazon purchase that might include kids’ school supplies, some new pillows for the couch and then a yoga mat. In this case they just upload the full receipt, note the yoga mat for reimbursement and away they go. Within 24 hours, about 90% of all claims are approved or denied and then we automate the file to payroll to include appropriate taxes being taken out with the reimbursement to the employee at the next payroll run.

Often paired with reimbursements is a curated in platform store sometimes called the Marketplace where we’re able to pull in any items that fit with that LSA from partners like Amazon Business Prime and Abenity, which is a discount marketplace. We do not mark up anything on our marketplace or for that matter, in our reward store. So employees’ LSA and recognition dollars go farther. We’re also able to issue debit cards. We have found cards are most often used with lower wage employee populations who may not have a credit card of their own or the time between purchasing and reimbursement through payroll creates a point of friction that takes away from their experience. In this case, the key to this is flexibility in meeting employees where they are, regardless of which way we’re looking to use the platform.

Typically when we start talking about reimbursements, the question comes up and you may wondering what would be an appropriate dollar amount for an LSA wallet. The answer, like the account itself, it’s flexible and depends on a number of factors. Broadly speaking, as you can see on this chart, the vast majority of our clients offer LSA wallets that range from about $500 to about $1500 per year. That’s a pretty broad range understandably, the $500 side of it tends to be a good starting point for employers looking to do something new but not sure about how it’ll be received and the outcomes that they are expecting. As organizations have LSAs in place and start to see that proof is in pudding for more than a year or if they’re looking to establish them for a specific purpose right away we see wallets that tends to be closer to a $1,000 or $1,200 a year. The upper end of the spectrum on this chart has been used by organizations in particularly competitive talent markets as well as those who have very purposefully consolidated many other programs into broad LSA wallets with employee choice and flexibility being paramount. Oftentimes these are organizations that are maybe taking dollars that may have been used for real estate or other areas and still driving them to employee benefit that drives value.

We talked through a few different employee scenarios on the other slide we had Idris and Amanda and Javier and those highlights of the different uses of an LSA from very different individuals showing how personal choice came into play. Here we’ll take a look at a couple different scenarios from an employer standpoint. You’ll probably recognize each of these as a mashup of very common traits you see in your own clients or if you’re employer yourself, you’ll probably start to see some of this popping up as if you’re looking in a mirror. But ultimately this is how we help use a LSA Plus to help them in their journey to solve specific issues.

In this case, to start out, we’re looking at a mid to large size global employer who likes to consider themselves an early adopter in all aspects of their business, including HR and benefits. They not only have all five generations in their workforce, but every shade of employee work situation from essential employees who never left the office over Covid to those that are newly back in office full-time hybrid and full-time work from home. They have a catalog of point solutions for every employee need they’ve encountered and they’ve seen very low and oftentimes zero utilization in the majority of them.

This organization believes in building culture but seems to always be chasing the latest buzzwords and approaches from wellbeing to community involvement to diversity equity inclusion to resource groups and peer to peer recognition to name a few but never really fully able to engage their employee population in any single one of them. As much as they have added solutions for many needs, they continue to find their catalog of core and expanded benefits is much larger for their US population than for their international populations. And this is an area of concern for them as they try to be inclusive and equitable across their entire global population.

The largest priorities they want to solve for were around streamlining administration for dispersed reimbursement programs and providing a truly flexible and individualized experience for all employees on the same platform. They wanted their employee resource groups to be global in reach and their work around inclusion to include challenges that support their core mission around community, wellbeing and sustainability and allow for flexible streamlined global recognition.

This employer puts in a global LSA Plus with wallets for traditional tuition and adoption programs and a lifestyle wallet that takes in recognition and challenge points to an earned allowance process. This provides more choice in how individuals spend their money. Ultimately employee engagement is in the high 90% plus in their LSA and across their culture program all in one app. They’re well on their way to seeing how this engagement correlates to other employee and productivity metrics working towards a true return on culture investment. In a second scenario, we’re finding more and more common now that we’re on sort of the I would say the tail end of the early adopter phases of LSAs.

This is a midsize US-only steady growth organization. You know this client or maybe this client is you as one who is fiercely proud of their roots and position in their markets. Ownership considers their employees to be their family and has offered very traditional benefits in that same fashion. They have avoided offering too much choice with the rationalization that they have a broadly generous offering and have kept their HR department lean and mean even before their other organization started scaling back in that area. The limited HR department is close to putting in a focused adoption assistance program to expand their core offering into family planning for the first time.

This employer has strong connections with their local community they got started in and drives their culture to give back through volunteering and donations connected with that cause. The Covid pandemic has forced them to accelerate some change and look at their processes faster than they would normally want to. They’re more aware now than ever that they too are dealing with the five generations in the workforce everyone else has and continually hear that employees want more choice and flexibility in their benefits and how they get involved in their own local communities.

Their small but mighty HR department looks to outsource the administration of the adoption assistance program and use the same vendor to a pretty traditional wellness approach with a small LSA wallet focused around physical, mental and financial wellbeing dimensions as a start and looking at social and career down the line.

They also saw the ability to take the very positive feedback from their existing community program and increase engagement and involvement by creating challenges around volunteering with local nonprofits, important to each individual employee that provides funds that could be donated to the same platform. This employer puts in an LSA Plus as well with a starter wellness wallet and a second adoption assistance wallet for their new program. They add the community involvement challenges and are considering allowing a non-monetary peer-to-peer recognition connected with their core values, including community and charity. Almost without realizing it, they had become more innovative than their peers in their offering and created a truly inclusive offering that is a unique attraction and retention tool for HR to use now and in the future.

So I hope you found those real world scenarios helpful or maybe even saw your own situation staring back at you in the mirror. We’ve helped those type of organizations move past just a reimbursement process to a true LSA Plus and we see that we’re succeeding in our goals in both customer satisfaction and member satisfaction ratings that are extremely high. That shows us we’re delivering on the simplicity and ease of use for your clients’ HR departments and their employees.

We often talk about making heroes out of HR and a step before that, making heroes of our consulting and broker partners with a flexible solution to help all your clients achieve their attraction and retention goals. We look forward to having the chance to bring our experience, insights and best practices and partnership to ensure you achieve similar results and we love additional conversations. So thank you so much for your time today.

At this point I’m going to hand the floor back to Erika to see if there are any questions that have come in while we still have a few minutes. Erika, are you there?

Erika Lawney, Shortlister // LSA Plus solution, taking the time to present this short lecture today thank you again. And and for all our attendees on the line, Dan’s contact information is up on your screen and it will remain there until the end of the webinar. Please do copy that down so you can reach out to him directly to learn more. And Dan, I have to say we’re going to move right into our Q and A because there were so many questions that came in while you were presenting and I want to get to as many as we can with the time that remains. But for those that have asked questions, if we don’t have time to get to yours, please do reach out to Dan and the Espresa team directly and they will be happy to help.

Okay, Dan here is our first question. This is a bit of a long one, so bear with me. Some of these benefits can be tax advantaged under certain circumstances like education and childcare expenses, but others cannot, like gym reimbursements. Are these LSAs taxable benefits? Are there tax advantages to an LSA for employers or employees?

Dan Weinstein, Espresa // Okay, that is a great question and it’s probably something that I may have kind of sped past. So you’re absolutely right, whoever asked that question. There are different tax uses here. So the majority of expenses that go through an LSA are taxable. So you know, when you think about a true kind of flexible piece, we look at gym reimbursements, yoga mats, those sort of things are taxable.

However, as we talked about within there, we can accommodate both taxable and non-taxable items. So that may be something like childcare expenses and it can be in its own wallet or it can be combined in a broader wallet. The key to all this is we assign codes by expense type and that information is shared back when we send file to payroll. So ultimately payroll will tax or not tax based on the codes assigned to that during implementation. Hope that answered. If you have any further kind of clarification, please throw it into the chat of the questions.

Erika Lawney, Shortlister // Okay, perfect. All right here’s our next question. You talked about other plug and play programs for LSA. Are there more common combinations you see?

Dan Weinstein, Espresa // Ah, yes. So you heard me talking a lot about LSA Plus and we talked about some of the other pieces that we put in here. Kind of maybe to back up a second, first and foremost a lot of the motivations for bundling the solutions within Espresa are around consolidating existing vendors and streamlining administration. So I mentioned in one of our scenarios an organization who is already doing tuition reimbursement and adoption assistance. Those reimbursement programs can be brought in and help from that administrative standpoint as well as enhanced employee experience. So as employees are coming in, it’s easy to find, easy to apply for and get answers and get reimbursement from. Another one is also kind repurposing existing investments. You know, we talk about that, the point solution fatigue, someone who’s got, you know, 10, 15, 20 point solutions kind of taking that and really looking to bundle that all together in a single LSA.

Now the the broader piece where really tends to be LSA Plus are kind of a bundling combination of some of the other areas. So the most common one we see is LSA Plus wellbeing and challenges. And oftentimes that’s where there is an existing wellbeing program in place. So you can combine or or reduce fees there and really create a connected experience, especially when we talk about earned allowance. And so that’s an area where if there are dollars being achieved for a wellbeing challenge or a reward and recognition, those dollars can actually flow directly into the LSA and provide even more choice.

I mentioned before probably the second most popular one is LSA Plus rewards and recognition. And this is really exciting when you talk about culture because when you set up an LSA and you give employees free dollars, they’re going to go in and use it and we see extremely high participation and then when you add the ability in that same platform to recognize employees, their colleagues, they are doing it whether there’s dollars attached to it or not. And that just continues to create this cycle of building culture and connectivity.

And then, you know, kind of we talk about the full culture platform, it’s really bringing those challenge and rewards and recognition together and oftentimes helping to offload the administration around employee resource groups to give a really truly broad engagement that’s inclusive of all employees globally. So that was a bit of a long answer, but great question.

Erika Lawney, Shortlister // Yeah, and great answer too. So thank you Dan. Okay, here’s another one and the questions just keep coming in so we’re not going to be able to get to all of them but here’s another for you. How are companies choosing to fund these programs?

Dan Weinstein, Espresa // Yes, so funding these programs. Probably the most common initial piece is shifting existing funding. So we talked about wellbeing incentives or potentially HSA contributions, even looking at medical contribution strategy and really taking some of those dollars to be more inclusive, to create more choice for the individual employees. The other one is around, I kind of hinted at this, instead of having a whole host of point solutions, really looking to subset programs that have either low or no participation or very low impact, but really high administrative burden and taking that administrative savings, taking the fee savings and sometimes taking the incentives involving those and combining it all into an LSA.

Some of the newer sort of ways to look at it is employers that have been reducing their real estate footprint and that typically includes onsite perks like foods and and whatnot are taking those savings and reinvesting a portion of it back into the employees in a broader more inclusive way. And then lastly, employers are constantly looking to have an attract and retain, and so investment is also on books there, and that’s where we start drive in that first one on creating a return on that culture investment.

Erika Lawney, Shortlister // Excellent.

Dan Weinstein, Espresa // I don’t know if you have any time for more, so.

Erika Lawney, Shortlister // We’re right at the bottom of the hour, so we do need to wrap up. For those that ask questions that we didn’t have a chance to get to, we are going to share those with the Espresa team so Dan and his teammates can get back to you guys. And Dan, thank you again so much for presenting to today on behalf of Espresa and for answering the questions we had time to get to. For our attendees, thank you so much. We always appreciate you tuning in for our webinars. We encourage you to reach out to Dan directly to learn more. And again with that we’ve reached the end of our time together. We look forward to seeing you all on the line again for our next Meet a Vendor webinar that’s going to take place next Wednesday, November 16th at 1:00 PM Central time. Until then everyone, take good care and have a great rest of your day.